The American Spectator : The True Origins of This Financial Crisis

Text Size

Feature

The True Origins of This Financial Crisis

By Peter J. Wallison from the February 2009 issue

As opposed to a desperate liberal legend.

Two narratives seem to be forming to describe the underlying causes of the financial crisis. One, as outlined in a New York Times front-page story on Sunday, December 21, is that President Bush excessively promoted growth in home ownership without sufficiently regulating the banks and other mortgage lenders that made the bad loans. The result was a banking system suffused with junk mortgages, the continuing losses on which are dragging down the banks and the economy. The other narrative is that government policy over many years—particularly the use of the Community Reinvestment Act and Fannie Mae and Freddie Mac to distort the housing credit system— underlies the current crisis. The stakes in the competing narratives are high. The diagnosis determines the prescription. If the Times diagnosis prevails, the prescription is more regulation of the financial system; if instead government policy is to blame, the prescription is to terminate those government policies that distort mortgage lending.

There really isn’t any question of which approach is factually correct: right on the front page of the Times edition of December 21 is a chart that shows the growth of home ownership in the United States since 1990. In 1993 it was 63 percent; by the end of the Clinton administration it was 68 percent. The growth in the Bush administration was about 1 percent. The Times itself reported in 1999 that Fannie Mae and Freddie Mac were under pressure from the Clinton administration to increase lending to minorities and low-income home buyers—a policy that necessarily entailed higher risks. Can there really be a question, other than in the fevered imagination of the Times, where the push to reduce lending standards and boost home ownership came from?

The fact is that neither political party, and no administration, is blameless; the honest answer, as outlined below, is that government policy over many years caused this problem. The regulators, in both the Clinton and Bush administrations, were the enforcers of the reduced lending standards that were essential to the growth in home ownership and the housing bubble.

THERE ARE TWO KEY EXAMPLES of this misguided government policy. One is the Community Reinvestment Act (CRA). The other is the affordable housing “mission” that the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac were charged with fulfilling.

As originally enacted in 1977, the CRA vaguely mandated regulators to consider whether an insured bank was serving the needs of the “whole” community. For 16 years, the act was invoked rather infrequently, but 1993 marked a decisive turn in its enforcement. What changed? Substantial media and political attention was showered upon a 1992 Boston Federal Reserve Bank study of discrimination in home mortgage lending. This study concluded that, while there was no overt discrimination in banks’ allocation of mortgage funds, loan officers gave whites preferential treatment. The methodology of the study has since been questioned, but at the time it was highly influential with regulators and members of the incoming Clinton administration; in 1993, bank regulators initiated a major effort to reform the CRA regulations.

In 1995, the regulators created new rules that sought to establish objective criteria for determining whether a bank was meeting CRA standards. Examiners no longer had the discretion they once had. For banks, simply proving that they were looking for qualified buyers wasn’t enough. Banks now had to show that they had actually made a requisite number of loans to low- and moderate-income (LMI) borrowers. The new regulations also required the use of “innovative or flexible” lending practices to address credit needs of LMI borrowers and neighborhoods. Thus, a law that was originally intended to encourage banks to use safe and sound practices in lending now required them to be “innovative” and “flexible.” In other words, it called for the relaxation of lending standards, and it was the bank regulators who were expected to enforce these relaxed standards.

The effort to reduce mortgage lending standards was led by the Department of Housing and Urban Development through the 1994 National Homeownership Strategy, published at the request of President Clinton. Among other things, it called for “financing strategies, fueled by the creativity and resources of the private and public sectors, to help homeowners that lack cash to buy a home or to make the payments.” Once the standards were relaxed for low-income borrowers, it would seem impossible to deny these benefits to the prime market. Indeed, bank regulators, who were in charge of enforcing CRA standards, could hardly disapprove of similar loans made to better-qualified borrowers.

Sure enough, according to data published by the Joint Center for Housing Studies of Harvard University, from 2001 through 2006, the share of all mortgage originations that were made up of conventional mortgages (that is, the 30-year fixed-rate mortgage that had always been the mainstay of the U.S. mortgage market) fell from 57.1 percent in 2001 to 33.1 percent in the fourth quarter of 2006. Correspondingly, sub-prime loans (those made to borrowers with blemished credit) rose from 7.2 percent to 18.8 percent, and Alt-A loans (those made to speculative buyers or without the usual underwriting standards) rose from 2.5 percent to 13.9 percent. Although it is difficult to prove cause and effect, it is highly likely that the lower lending standards required by the CRA influenced what banks and other lenders were willing to offer to borrowers in prime markets. Needless to say, most borrowers would prefer a mortgage with a low down payment requirement, allowing them to buy a larger home for the same initial investment.

The problem is summed up succinctly by Stan Liebowitz of the University of Texas at Dallas:

From the current handwringing, you’d think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards—at the behest of community groups and “progressive” political forces.… For years, rising house prices hid the default problems since quick refinances were possible. But now that house prices have stopped rising, we can clearly see the damage done by relaxed loan standards.

The point here is not that low-income borrowers received mortgage loans that they could not afford. That is probably true to some extent but cannot account for the large number of sub-prime and Alt-A loans that currently pollute the banking system. It was the spreading of these looser standards to the prime loan market that vastly increased the availability of credit for mortgages, the speculation in housing, and ultimately the bubble in housing prices.

IN 1992, AN AFFORDABLE housing mission was added to the charters of Fannie and Freddie, which—like the CRA—permitted Congress to subsidize LMI housing without appropriating any funds. A 1997 Urban Institute report found that local and regional lenders seemed more willing than the GSEs to serve creditworthy low- to moderate-income and minority applicants. After this, Fannie and Freddie modified their automated underwriting systems to accept loans with characteristics that they had previously rejected. This opened the way for large numbers of nontraditional and sub-prime mortgages. These did not necessarily come from traditional banks, lending under the CRA, but from lenders like Countrywide Financial, the nation’s largest sub-prime and nontraditional mortgage lender and a firm that would become infamous for consistently pushing the envelope on acceptable underwriting standards.

Fannie and Freddie used their affordable housing mission to avoid additional regulation by Congress, especially restrictions on the accumulation of mortgage portfolios (today totaling approximately $1.6 trillion) that accounted for most of their profits. The GSEs argued that if Congress constrained the size of their mortgage portfolios, they could not afford to adequately subsidize affordable housing. By 1997, Fannie was offering a 97 percent loan-to-value mortgage. By 2001, it was offering mortgages with no down payment at all. By 2007, Fannie and Freddie were required to show that 55 percent of their mortgage purchases were LMI loans and, within that goal, 38 percent of all purchases were to come from underserved areas (usually inner cities) and 25 percent were to be loans to low-income and very-low-income borrowers. Meeting these goals almost certainly required Fannie and Freddie to purchase loans with low down payments and other deficiencies that would mark them as sub-prime or Alt-A.

Page: 1 2 >

topics:
Global Financial Crisis, Housing Bubble

About the Author

Letter to the Editor View all comments (354) | Leave a comment Leave a comment

Bob| 2.1.09 @ 12:51PM

What Mr. Wallison's ideological rejoinder fails to note is that this was all made possible by two factors that predated the 1990's -- securitization (and eventually derivatives/swaps) and leverage in non-bank financial institutions. If lenders were required to keep a portion of their lending portfolios and also required to have enough capital to cover losses, they would have self regulated. Encouragement by government would have had little effect on their quality of loans. In other words, if I could loan a homeless person $1 million dollars, package a bunch of these, and sell them all off to people who couldn't value what they were getting, I would have no risk for making these loans and therefore would make as many of them as I could.

Surely the CRA contributed, but was NOT the major enabling factor. Fannie and Freddie were enamored by the profits to be made and they were just as greedy as the investment banks. It is relevant to understand that as long as home prices continued to rise, then the housing "Ponzi" scheme could continue. But as many of us knew in the 90's, this was a house of cards build on faulty premises and poor regulation with regards to "skin in the game" and potential housing bubbles.

There is enough blame to go around on this one, but to take this kind of ideological analysis does not do credit to any political party or the American people. The CRA and Fannie/Freddie contributed, and so did the lack of PROPER regulation regarding lending standards, non-bank default activities, leveraging limits, and the inability to properly value financial derivatives.

Astro| 2.1.09 @ 1:21PM

Bob,

Did you actually read the entire article? Aside from the opening paragraphs where Mr. Wallison disputes the NYTimes analysis of the causes and loosely defends Bush, he wastes no words trying to place the blame on a particular political party.

On the other hand your analysis is rather weak, relying on an if...if...if formulation. One can always reach back a step further and say 'no, THIS was the real cause.'

Joe McCarthy Jr| 12.19.10 @ 10:22AM

It is not possible at this time to have any intelligent conversation with the Republican hoy polloi. Mr. Wallison provides arguments that sound sufficiently erudite to such that these folks to keep their ears shut.
Astro is typical.

Robert Rosencrans| 2.1.09 @ 2:25PM

In July 2001 Superior Bank collapsed, leaving the FDIC holding the tab for 750 million dollars. Fourteen thousand depositors lost their life savings and also saw a subsequent lawsuit dismissed leaving them without hope. Obama's campaign finance manager, Penny Pritzker, and other family members who controlled Superior, settled with the government for $450 million dollars. Penny Pritzker, a billionaire, was Obama's campaign finance manager during his run for the Presidency. At one time she was the Board Chair for this bank, and encouraged sub-prime loans. That's the reason the bank eventually collapsed. Barack Obama himself filed a lawsuit at one time to force a bank to make a loan to a minority candidate who had little income.

Clinton appointees to Fannie Mae, Franklin Raines and Jamie Gorelick walked away with 94 million and 24 million respectively before they were ousted.

As early as 1997 the OFHEO had reported out of control lending practices endorsed by Fannie Mae. As late as July 2008 Senator Dodd was quoted as stating there was nothing wrong at Fannie/Freddie. In September 2008 the government took over the troubled and corrupt institutions. Don't forget Senator Dodd's sweetheart mortgage rates he received from Countrywide that saved him $58,000 while he ran cover for the impending disaster.

In the meantime Senator Schumer's office released a letter on June 27th that started an eleven day run on Indymac that caused it to fail or as one regulator put, "Senator Schumer caused the bank to have a heart attack."

Sitting closely behind each of these themes is the theme of government control. The Community Reinvestment Act was just another player that contributed to the financial debacle to come.

The financial markets deserve some of the blame because they played into the greed factor, but the real impetus was government involvement in the markets.

It's pretty clear that all central economic planning,, which is what this was in many ways, always fails.

After glancing in the rear view mirror, it's easy to observe that Obama's central economic planning will also fail perhaps leading to more pain in the economy.

The problem with the government planning financial strategies is that there is too much temptation for some elements to get corrupt, as evidenced by Senator Dodd, or get political and play a card which triggers a financial upset, like Senator Schumer, or to get greedy and obviate rules to benefit yourself, like Raines and Gorelick and others at Fannie Mae, or to pretend you're not part of the problem, when in fact, you were part of the problem, like our current President, Barack Obama.

http://www.associatedcontent.com/article/878809/did_senator_chuck_schumer_cause_indymac.html

http://www.everydayrepublican.com/2008/06/13/dodds-sweetheart-mortage-deal-demands-answers/

http://en.wikipedia.org/wiki/Federal_takeover_of_Fannie_Mae_and_Freddie_Mac

http://www.suntimes.com/news/politics/obama/919177,CST-NWS-pritz28.article

http://iusbvision.wordpress.com/2008/09/30/obama-sued-citibank-under-cra-to-force-it-to-make-bad-loans/

Stephen Kay| 11.26.11 @ 11:58AM

You omitted the influence Wall Street firms had on govenrnment and rating agencies. Revising social programs and maintaining regulations of financial practices is needed.

Bob| 2.1.09 @ 3:26PM

Astro, you are entirely correct that aside from the first paragraph, political references were minimal. However, he concludes that more regulation is NOT the answer. That is clearly political bias since you cannot prevent predatory lending, leverage, risk retention, and capital requirements with anything except government regulation. He also concludes that housing policy was the primary cause of this, which again is supportive of taking the blame away from the Bush administration.

I was an executive in the sub-prime business in the early 90's and can tell you that securitization -- not a "housing" policy -- was the primary motivating force in easing lending standards. There was little risk for our company to take these risks since we ended up not owning these loans.

Were Fannie and Freddie responsible to the risk they assumed. From an historical perspective, the actuaries would have said it was a good risk. Since housing prices continued to rise over long periods of time, even if significant defaults occurred, if history continued, Fannie and Freddie would have shown minimal risk. As loan originators, we knew the risk, but we had high demand for our sub-prime securitizations and the ratings agencies backed this up.

Where Wallison and other policy wonks make their mistake is in assuming that the government is powerful enough to run roughshod over private enterprise. Government policy does affect the fringes, but cannot stop the market from maximizing their resources within the bounds of legality. Fannie and Freddy only held a small percentage of the derivatives and swaps in the world market. The bank failures would still have occurred with or without Fannie and Freddie.

There is a political bias to his comments given that he argues against regulation, the CRA, and blames the Clinton administration for Fannie and Freddie. As I see it, from a business perspective, free markets operate best when individual/company responsibilities are kept by the individuals or companies in the process. Where this process fell down is that the risk was not maintained by either the individuals (through bankruptcy) or the companies (through securitization). Unfortunately, it takes regulation to make individuals and companies keep the risk associated with their actions.

What bothers me about this whole discussion of blaming everything on politics rather than on what Republicans should stand for -- free markets, individual/company responsibility, and appropriate regulation to keep responsibilities where they belong.

Terry| 2.6.09 @ 7:24AM

A point Mr. Wallison begins, but doesn't complete is the overall impact of tax law, which serves homeowners and leaves renters unprotected, clearly beyond constitutional from a "general welfare" standpoint. Additionally, when people speak about 'fair' or 'flat' taxes, no consideration is given to it's impact on the housing market, specifically condominiums. In our 'post' constitutional government it strikes one that legislatures have such a narrow view of the impact of their policies that we are condemned to a rolling crisis where one section or another of our economy is constantly fighting for survival after a legislatively created crisis. Regarding the securitization of mortgages, can one be certain the event would have even ocurred without governmental interference?

Johnny Flapjack| 2.6.09 @ 8:15AM

Terry: Renters are protected because the landlords get tax breaks, which help them keep rentals lower.

Amit @ big booty | 5.11.11 @ 10:53AM

Exactly, This is exactly why renters are protected.

Sometimes i feel its better to have own rented place than taking rent for a house.. because the crazy burden is just too much..

Country Boy| 2.6.09 @ 8:22AM

This is a situation where regulators want life to work both ways for them. As regulators, when things are good, they have power (secure government jobs), prestige (smiling faces on TV), etc. But when things go bad, somebody else must be to blame. It must have been the greedy bankers. How could the regulators know in advance the the Bankers would greedy? But in truth, if the Bankers weren't greedy, we wouldn't need any regulators.

This is why there are no arrests of Wall Street bankers. If somebody like Jimmy Cayne or Dick Fuld were to be indicted, trouble would soon knock on the door of Barney Frank, Chris Dodd, and Andrew Cuomo.

Pingback| 2.6.09 @ 8:36AM

The True Origins of This Financial Crisis | GoAubie links to this page. Here’s an excerpt:

…is more regulation of the financial system; if instead government policy is to blame, the prescription is to terminate those government policies that distort mortgage lending. For more, click here to read the full article. Share and Enjoy: Written by David · Filed Under Editorials Tagged: editorial, financial, housing Comments Got something to say? Name (required) Email Address…

Country Boy| 2.6.09 @ 8:39AM

Just to add.

The financial markets are groping for a toe-hold of confidence. Perhaps we could find some if the Federal Regulators would just even hint that they made some mistakes.

To go one step further, if there were Capitol Hill hearings into this debacle, and somebody from Congress was held accountable (expelled, maybe jail time), I think the financial markets would turn on a dime.

Todd| 2.6.09 @ 8:43AM

Bob, can't you get the point that is was government regulation that caused this but yet you claim we just need more government regulation by political hacks like Barney Frank and Chris Dodd? Wallison has the numbers and figures to back it up but there you are accusing him of being ideological and making an utterly ridiculous claim that Fannie Mae had very little to do with it. That is preposterous and you know it. See Bob, you always lecture us about using reason and analysis and that is exactly what this article is but it is you that won't see past your ideology. Didn't you make a claim before that you think Bush cutting the capital gains helped caused this crisis with nothing but hearsay? Hypocrite

Curly Smith| 2.6.09 @ 8:54AM

The article confirms my suspicions about the basis of the TARP bailout - it was hush money to buy off the financial institutions that were ruined by government policy. The message was simple: take the money and shut-up about the machinations of Congress and the last two administrations.

I will admit, though, that the failure could not have been foreseen. Who would have imagined that loaning money to people who lacked to resources to repay the loan would end badly? Besides anyone not in government, that is?

Bill| 2.6.09 @ 10:03AM

Now speaking as a former banker I can tell you that the CRA provision was a freight train heading for the station with no breaks.

This act violated every sound lending practice that banks operated under. More than that it was a form of extortion. If banks wanted to open new offices or acquire another bank they had to pass a CRA audit. Failure to pass the audit could lead to serious fines and shut the bank out of the market for over a year. Secondly, in order to make sure the bank was in compliance with the act they had to form and staff a CRA Department that would monitor and track all loans that would fall into this category. It was like saying to a bank... you must dedicate a certain percentage of your loans into the CRA category .... and oh by the way.. good luck collecting.
Our government at its best!!!!!

Can someone tell me why Dodd and Frank are still in congress?

Jeremiah| 2.6.09 @ 10:24AM

You have your facts basically right, but you don't ask the right question:

WHY can people who work full time not afford a house?

WHY are good, hardworking, decent people in such terrible debt? Is it simply that they have not been held "accountable," or are there other reasons?

Maybe if we look at the causes of middle class economic insecurity honestly, we'll find the causes of our current squalors.

It seems to me that in the 40s, 50s, 60s, and even well into the 70s, American working families had it better.

Who was in charge then? Why were things so much easier? Why could my mother stay at home with us in the 70s and my father afford a modest but certainly comfortable house on his blue-collar earnings?

Could it be our policies have made a socialism for the rich that working people have to pay for?

Obama Rules| 2.6.09 @ 10:41AM

Great quote from Pres. Obama:

“I found this national debt, doubled, wrapped in a big bow waiting for me as I stepped into the Oval Office.”

Damn straight -- thanks to that dickwad Bush. It's about time you bunch of whiny-ass conservatives fess up to your failed antics of the past 8 years.

Vern Crisler| 2.6.09 @ 10:48AM

I think you guys are letting Alan Greenspan off the hook by blaming it on the loose lending practices. It was his low interest rate policy that caused an inflationary spiral in the housing market.

Without this bubble, the problems created by loose lending would have been under the radar for the most part.

If you look at market crashes throughout history, they always have a period of wild excitement and a buy-now-or-miss-out attitude on the part of market participants. See tulip mania, stock market crash, etc.

Thus, you cannot rule out human psychology as a major component of our current economic woes.

Bad economic policies create bad thinking which creates bad economies, and dopey regulatory policies exacerbate and make manifest the underlying problem -- stupid economic and political decisions.

Griff| 2.6.09 @ 10:53AM

Jeremiah,
The 40's 50's through the mid-sixties were a much more conservative time, both fiscally and socially, on both sides of the aisle. The Great Society and Johnson's foolish Viet Nam strategies introduced government as a major competitor for the money supply, vastly increasing aggregate demand. Tricky Dick (actually a liberal Repub) exacerbated the resulting inflationary pressures with his foolish wage and price control schemes. Enter the dunce, Carter, and his stagflationary policies and suddenly homes costing $30k in the early sixties were approaching $60-70k by the late-seventies. That's about the time homes started getting out of reach for many in the lower-paying jobs. Look for Carter Part II when the Prophet Obama foists his community organizing act on the entire nation.

Charles R. Williams| 2.6.09 @ 11:03AM

Government housing policy accounts for why the banks made imprudent mortgages. However, these were largely securitized. One can also ask why banks that were forced to make imprudent loans to low income people made imprudent loans to higher income people. I think it was just too difficult for these organizations to admit that they were being forced to generate bad mortgages rather than let themselves be convinced that lending standards were needlessly high across the board. The GSEs had a role in creating a mis-priced market for bad mortgages.

In discussing regulation we need to distinguish between lack of regulation and incompetent regulation. I think the balance of the evidence is that incompetent regulation over a 20 year period is at fault in this crisis. So more regulation will not help us unless there is some reason to think that regulators are quicker to learn from their mistakes than the institutions they regulate. The incompetence of both the Bush and Obama administrations and the Democratic Congress in dealing with the crisis suggest that more regulation will only harm the economy a la Sarbanes-Oxley.

Any discussion of the crisis has to account for it's international character and the role of loose monetary policy under Bush/Greenspan.

Pingback| 2.6.09 @ 11:17AM

The American Spectator : The True Origins of This Financial Crisis | refunddebt.com links to this page. Here’s an excerpt:

…Money … I got my passport savings account. The next time my mom had to go to the bank, she pulled out the records of my account and it was a few... Related blogs: The American Spectator : The True Origins of This Financial Crisis Related posts: Credit Card Debt - Tips On Financial Help Credit card debt is rising at an alarming proportion this is beginning to cripple many people who are finding…

ncatty| 2.6.09 @ 11:20AM

There is a savings and loan in my mid-size NC town which during the go-go days advertised that they did not sell their mortgages. Who cared? Plus they were glad to lend you 80% if you had 20% to put down. What fools. No second mortgages, no equity lines. Idiots. I nominate the president of that S&L;for Secretary of the Treasury.

Country Boy| 2.6.09 @ 11:20AM

Griff, yes that is correct. The politics were different in those years.

For the benefit (presumably) young libs here, the economy of the '50s, '60s and early '70s had massive tailwind. Manufacturing jobs in the U.S. werewell paying and plentiful.

This impetus was the direct result of the massive and in many cases, the complete destruction of manufacturing and shipping infrastructure in continental Europe and Japan during WW Two.

And who was responsible for this? It was ancestors of all of us, Americans, who literally shed blood, to stop world tyranny and atrocities against humanity. In the aftermath, America did not take one square inch of real estate from the AXIS powers. But we became a wealthy nation, by default.

The modern legacy of these events are guilt ridden baby boomer (really deranged persons), like Obama's good friend, William Ayers. They want Americans to apologize and make peace offerings to the world for our success in the past 50 years.

Dai Alanye | 2.6.09 @ 11:31AM

This is the most rational analysis I've yet seen of what caused the mortgage crisis.

Also interesting is that the ubiquitous "Bob" has now let the cat out of the bag as to his political motivations. He tells us: "I was an executive in the sub-prime business in the early 90's…"

Now we know why he has an axe to grind, in a manner quite similar to that of Barney Frank and Chucky Schumer. In other words, "Bob" needs scapegoats (Dubya and conservative Republicans) so as to cover his own part in the scandal.

Jeremiah| 2.6.09 @ 11:33AM

Griff --

Some of the points you make are reasonable and sound, although you hurt your case by using Hannity-style rhetoric.

What happened in the 70s is not so much the result of Great Society and Vietnam spending as it is the globalization of capital.

This move of capital dramatically increased the disparity between those in the "middle" and those on "top" in American society, which itself gave way to a crasser, more vitriolic politics and political discourse (of which your post shows evidence).

When the top people in a company make 400 times what the people on the bottom make, rather than 15 or 20 times as they did in the 50s, and when the top tax rates are 25% rather than -- say -- 90%, as they were in the more "conservative" times you cite, then resentments develop that are socially corrosive and politically disastrous.

Do you think that it is pure chance that the middle class is split politically, 50-50 "conservative" and "liberal"?

They've got us just where the want us.

There has been plenty of class warfare in this country since in early 80s. The people on top have warred against those in the middle. The entire Bush II administration was about securing two or three trillion -- with a TR -- dollars for the upper class.

So far, they seem to be winning, and will until people wake up.

It's the middle, or the top. You cannot serve two masters.

Ryan| 2.6.09 @ 11:45AM

Jeremiah...

If there was a war between the middle and the top, then how did they both increase in size during the 80s?

Bullwinkle| 2.6.09 @ 11:50AM

Obama Rules....

Thank you for your insightful, well thought out analysis of the evolution of the financial crisis.

Have you considered employment as an economics professor at a university, or are you already employed as such?

Todd| 2.6.09 @ 11:51AM

Obama Rules,
This is a website for grown-up adults not for classless juveniles like yourself. Take your smut somewhere else, you add nothing to the discussion with your rubbish.

bill glass | 2.6.09 @ 11:53AM

simply another case of baby boomers questioning a basic bedrock tenet of civilization - that you loan money to people who will likely or can assuredly have the means to pay it back. these people are dangerous.

Pingback| 2.6.09 @ 11:58AM

The American Spectator : The True Origins of This Financial Crisis | ozsv.com links to this page. Here’s an excerpt:

…Community Reinvestment Act and Fannie Mae and Freddie Mac to distort the housing bcredit/b system– underlies the current crisis. b…/b Read more → Related blogs: The American Spectator : The True Origins of This Financial Crisis Related posts: American Express Canada hate site Canadian-Money-Advisor.ca b…/b Like the Ombudsman/ Compliance Officer (Ho, Ho) at bCollectcorp/b, Joyce Morrison…

Jeremiah| 2.6.09 @ 12:00PM

Ryan --

Again, excellent point. My friends on the left underestimate you guys.

The middle has in general expanded since the 80s.

However, the numbers don't tell the whole story. Perception is enormously important in economic analysis.

The disparity between those in the "middle" and those on top has grown. The disparity is what --albeit irrationally -- causes the resentments.

What's come with this is a perception that people have that they are poorer than they really are, which leads -- again irrationally -- to consumerist and profligate spending.

Add to this forces that genuinely imperil middle class families (unstable schools, high tuition, medical costs) and you have the makings of a stew of resentments that are not easily addressed.

Level 75 or 80% taxes on the wealthiest, and you'll see a return to a more traditional, more "conservative" society.

It's the disparity, not the reality, that makes that angst.

Stan Redmond| 2.6.09 @ 12:00PM

In response to Jeremiah:

For lack of a better word LIBERALISM took hold after the 40s and 50s. The "new deal" started this roller coaster. Public education gave up education and began indoctrinating students. The entitlement culture financed by generous government subsidies created an entire society dependant on handouts. Follow that by the expansion of credit and there is an entire system that destroyed the natural balance of capitalist economic principles that kept prices where they should have been. If people actually had to PAY their own care, housing, retirements, educations, and food the prices would stay at affordable levels. BUT!!! Government interference has thrown the whole system in to chaos. In short, people haven't been allowed to fail and learn. Couple this with easy credit and NOTHING is allowed to find market balance.

And on that note I feel like a total chump paying my bills. I payed very large down payments on my houses. I pay my mortgages. And now with the looks of it Uncle Obama will swoop down from the heavens with a big fat check to the people who can't pay their bills.

Jeremiah| 2.6.09 @ 12:03PM

To put it a different way, social cohesion creates contentment and respect for traditional institutions.

Wealth disparity leads to cynicism, irony, sarcasm, corruption, acquisitiveness, and a sense that institutions are just there to bolster the exclusive claims of the wealthy on available resources.

Jeremiah| 2.6.09 @ 12:05PM

Here's the point:

It's not quite that economics is psychology.

Psychology is economics.

Carl Davis| 2.6.09 @ 12:27PM

Re: Obama Rules. You make a "good argument" - ignore the facts and hit hard on name calling and personal attacks. That will really convince people you know what you are talking about. The facts are that government pressure through CRA, Chris Dood, and Barney Frank and his friend at Freddie or Fanny caused lenders to make loans to people who could not pay the loans and then sold packages of these loans to Fannie/Fredie and other who ignored or did not know that the underlying quality of the loans were bad. Congress created this problem and the taxpayers are supposed to believe that Congress can now fix the problem. Right. I have a bridge you can buy.

Pingback| 2.6.09 @ 12:36PM

The American Spectator : The True Origins of This Financial Crisis | creditdocumentat links to this page. Here’s an excerpt:

…Secret Life of American Teenager Season 2. « Watch One Tree Hill Season 6 Episode 16 : Screenwriter’s Blues · Watch Kyle XY Season 3 Episode 1 Online -... Related blogs: The American Spectator : The True Origins of This Financial Crisis Related posts: Banks in Trouble Again | Our Global Financial Crisis Nouriel Roubini the famous New York University professor says the US Banking System is insolvent with…

JP| 2.6.09 @ 12:52PM

Jerimiah,
Enough of the class warfare schtick. During the 40s and 50s, the US accounted for about 45% of the global GDP. Eisenhower may have been a Republican, but he was no conservative -and Congress was run by Democratic majorities. It was a Democratic congress which signed the Interstate Highway Act, and it was the Democrats who put into law VA Housing benefits (back then, we had the draft. So, about 90% of males qualified). These 2 laws were huge reasons for the inflation in residential real estate.

You also need to factor in the entry of women into the workforce. The entry of so many additional workers tended to supress real wages over time.

One last thing to consider is the glut of workers/consumers represented by the Baby Boomers. This one demographic group -thier spending habits, consumption habits, as well as financial habits- has set the pace of our economy since 1981. Almost all of the financial tools (junk bonds, hedge funds, derivatives) were perfected by Boomers. The sad fact is, there are way too many homes -expensive homes- for the population to consume. The real economy will not improve until it can absorb these loses and the loses incurred by Fannie/Freddie. We're talking $8 trillion. Home prices will need to come down 20% or more for that to happen.

fundamentalist| 2.6.09 @ 1:01PM

Vern Crisler: "I think you guys are letting Alan Greenspan off the hook ..."

You're exactly right! The most powerful regulator in the nation is the Fed Chief. He controls the supply of money. Without his pumping vast amounts of credit into the economy, banks could not have made the housing loans they did, investment banks could not have bought mortgage backed securities, and the financial system could not have become the Ponzi scheme it became. Small-fry regulators and bankers made a lot of mistakes, too, but they pale in comparison to those of Greenspan.

Dustoff| 2.6.09 @ 1:06PM

From NPR today. try not to scream!
+++++++++++++++++++++

How money is spent should be far from the biggest concern about the stimulus package, its chief author, House Appropriations Committee Chairman David Obey (D-Wisc.) said Friday.

"So what?" Obey asked in response to a question on NPR's "Morning Edition" about the perceived lack of direction from Congress as to how money in the stimulus should be spent. "This is an emergency. We've got to simply find a way to get this done as fast as possible and as well as possible, and that's what we're doing."

Obey said that Congress is not responsible if money is misspent, but rather, whoever spends the money poorly.

Jeremiah| 2.6.09 @ 1:17PM

JP --

I hope you will take this question as in earnest and not rhetorical.

Why is it that when someone says the government should strengthen the middle class, it's called "class warfare," but when government acts in the interests of the wealthiest individuals and corporations, it's called "free market economics," or, in the case of crisis, a "suspension" of "free market principles" for the purpose of "saving capitalism"?

I take the rest of your points -- related to demographics and such -- on face value and accept them.

But then you say that the 50s -- generally regarded as a happy time for most Americans in the middle class -- was a creation of the unconservative Eisenhower. Perhaps conservatism is just what it increasingly appears to be: a pressure valve to drain off middle class resentments of "elites."

Thomas| 2.6.09 @ 1:18PM

At Bob's urging, in a previous discussion, I took considerable time to slightly increase my knowledge of the problems that led up to the current banking meltdown. Here are some of the things that I learned.

One, the aggressive use of the CRA by the Clinton administration and the loosening of lending standards by Fannie and Freddie caused lending institutions to grant loans to people that would not have qualified in the recent past. These lending practices, through supply and demand as well as banks' willingness to lend amounts that they had not in the past, caused the cost of houses to increase dramatically. These loans were made a t a significantly higher rate than standard mortgages and so were desirable as an investment instrument. Bankers, being more conservative than investors, sold these questionable assets to investment banks, who, in turn traded them, usually among themselves. Add to this changes in the government accounting rules, Mark to Market, which required that the investment instrument accurately reflect its market value rather than the value of the property that it represented and a gigantic game of musical chairs was in progress. When the music stopped, someone was going to end up without a chair.

That the process started with the aggressive enforcement of CRA provisions by the Clinton administration is undeniable. That it continued and was expanded by investor greed and the changes in government regulation as well as lackluster enforcement of existing government investment oversight is also apparent.

Unfortunately the finger of blame points at nearly every elected official, and not a few unelected ones, in Washington during that time. But, this crisis had its causes firmly rooted in Washington, D.C. and to expect the people responsible for the genesis of the home mortgage meltdown to fix it is simply stupid.

Now to answer the question of what changed in the '70's to re-make the face of America. The emergence of the credit society, rather than the saving society. Credit became a way of life in this country. In the post WWII years, people still remembered the Great Depression. Home ownership was number one goal of Americans during that period. But, people saved until they could afford the payments over a long period of time. They also bought homes to live out their lives in. The multiple home lifetime did not emerge until the '80's, when the term "starter home" was born. The ensuing generations have become used to buy now pay later. Credit limits have become more important than credit balances to consumers. People who have saved and invested conservatively are not in any dire financial straits at this time. It is only those that have an immense debt and little secure savings or investments that are in difficulties. At the moment at least.

ruth| 2.6.09 @ 1:28PM

Jeremiah, can you give us one example of a successful socialist country?

Philosopher | 2.6.09 @ 1:31PM

No matter how political or media forces want to spin it, the Leftist notion of 'Social Justice' was the social/political root of this crisis.

Note to Leftists/Socialists: Bad ideas have bad consquences! Us regular American citizens are tired of your emotionally driven worldviews.

Read how this flawed notion ('social justice') was the pebble that started the financial crisis avalanche:
http://pracphilosblog.wordpress.com/2009/01/31/leftist-social-justice-caused-the-financial-crisis/

Dr Gregory Young| 2.6.09 @ 1:33PM

Not that I disagree with the analysis of the author and other responsible comments posted here, but as I understand it, a point that many seem to fail to realize here is that only ~5% of mortgages have actually failed here.

Now, I ask you, how could a 5% failure rate suddenly become the tipping point of the entire world economy.... unless of course, somebody on the other side were frantically pushing this all to happen for a grandly orchestrated "Democratic October Surprise?" It's been my continuous observation that impecable timming of this nature is not in the least coincidental, nor could it be.

Likewise one may ask how .04% of atmospheric gases (CO2) could possibly be the major culprit behind AGW? Impossible is the intelligent response...

Recall too Biden's "inspirational" (read planned) panic-speak which then caused a run on a California Bank.... Again, not coincidence. With the appropriated leaks scattered here and there, the rest of the dominos followed suit, all without ever brandishing the scarlet letter upon one single Democrat (read Pelosi, Reid, Barney Frank, Dodd et al.)

I find this scenario very believable because it also suggests why of all the banking institution Lehmann Brothers was disallowed (without explanation) a bail-out during this very critical time. As seen in this light, this was just the needed extra weight to crash the economy through the floor. Panic, pandomonium and propaganda then ensured on cue, expressed by the MSM, and simply furthered the plight of every Amercian..., and the dominos are still falling. Now that was some slick soft-shoe performed by "Barak the magic negro," and his faithful circus crew, indeed. In fact, history will record that's some of the best tap-dancing ever before seen!

To think that this was not planned, and faithfully executed by those now in power, my fellow citizens, is to imagine that Obama is really Peter Pan, at worst an affectionate harmless nymph that you just gotta love.

So it is to believe that the stimulus package will really and effectively stimulate the economy. ..

Not! Obama has no inclination to help anybody but himself, as the hard numbers reveal from after vetting the package. Clearly, it is meant to grow the government, to assist the government to continue the promotion of the very "crisis" it has caused, for the very purpose, through stealth and further deception, to allow government to grow and grab as much power and money as it possibly can.

Again, though I enjoyed the article and thought it was well written and astutely presented, the "forest" was lost through the "trees." I amintain that the bigger picture is much more rewarding and instructive to us all.

I would invite the author and other presenters in TAS to begin their investigation of this aspect, before we as a nation lose the ability to query this possibility and further.

Jeremiah| 2.6.09 @ 1:39PM

Ruth --

Can you give me an example of a successful country that has a free market?

Michele San Pietro| 2.6.09 @ 1:48PM

The United States is a successful free-market country... as for this "financial crisis", it is definitely less serious than the demented liberals would have you believe, and it is sure not "all Bush's fault".

daboss| 2.6.09 @ 1:53PM

Jeremiah –

Pretty sure the US is a good example. It has a fairly free market.

A free market is nothing more than people living free – being able to do commerce – to sell services to those who need them.

Those without freedom in command and control economies have major troubles – look at most countries in the middle east, North Korea, Cuba,USSR, Eastern block countries. Which is a good example – while under communism/socialism their economies were non existent. Pretty sure now they are doing better.

All because of freedom.

ThinkTank| 2.6.09 @ 2:00PM

I knew this was somehow Clinton's fault.

I suggest if you want the real story, you should read the Economist - and not get your economics news from some ideologue pretending to be an expert?

john charles| 2.6.09 @ 2:04PM

Bob fails to recognize that the sub-prim lending fiasco could have been regulated early in corrected insane lending practices and stemmed the gravity of the crisis. However, politicians saw the GSEs as a money machine for political campaign funding. Therefore, the "Honorables" Barney Frank, Chris Dodd, etc. prevented, let me say again BLOCKED, any attempts by the Bush administration or the Senate from regulations. Remember, the Democrates controlled the Senate and Congress at the time. (This is all a matter of public record)

The crisis we are experiencing is Democrat generated by Marxist philosophy and greedy and irresponsible Democrat politicians. The Democrats broke it and they don't know how to fix it! This manufactured crisis is highly suspicious in its timing and size. It for our first Marxist president elected and "stimuli" packages enacted that will turn the country Socialist big time! This was not an economic problem, it was an ideology problem.

There should never be another Democrat elected to public office for such gross political fraud and malpractice.

Jeremiah| 2.6.09 @ 2:07PM

If the United States has a free-market, then I'm an archbishop.

We tried a relatively free market. It worked O.K. in the 19th century, if you discount its reliance on slavery, share-cropping, and abuse of immigrant workers from Ireland and Italy.

But when the great world crisis occurred in the 30s, the free market failed utterly.

Since then we've had a mixed market. Republicans try to make the mixed market work for the wealthy; Democrats try to make it work for the middle class.

If you want to have a fantasy and think we can go back to the government we had in 1880, OK.

If not, you have to ask yourself which group of people you consider yourself and your family to most like: the very wealthiest, or the middle class.

daboss| 2.6.09 @ 2:09PM

I think we can all agree that the current crisis has something to do with government meddling in the housing market (by both parties).

The REAL problem is the active involvement in the housing market by the Fed SHOULD NOT EVEN EXIST. It is a plain and simple violation of the constitution and should never have been in place.

If the Fed abided by the constitution and left these social issues to the people and the states (as defined by the 10th Amendment (I think) we wouldn’t be in this mess.

Although some states would be in financial trouble … but that’s ok. Let the people of each state determine how to best house their people. If a state like Vermont wants total socialism, let them have it. Let them be the states be the “great experimenters’ in policy.

Let the Fed do what its supposed to do … keep us safe and ensure liberty and equal protection.

Pat| 2.6.09 @ 2:10PM

Why do we believe that if we collectively fix the blame to the 4th decimal place that somehow we've gained wisdom? The old Soviet Union and China under the Maosists had a knack for seeing the forest for the trees that we somehow lack. They understood these problems occur due to unrestrained stupidity and greed - whether actions broke the law wasn't always important. They also had a "final" solution for the miscreant - the condemned could choose which ear the bullet entered.

Here, we go thru a constant series of introspective analysis, true confessions, speculations, bayoneting the wounded and so forth. Being perennial victims of our own laws, greed and stupidity are always an acceptable defense, incompetence will also get you off the hook - as long as you didn't technically break any laws. We focus on the dry letter of the law, not the human motivations - therefore, constant relapses are a permanent feature of our dysfunctional legal system.

Then we ruefully task our politicians with devising ever more diverse regulations to ensure "this never happens again". Right - we can successfully regulate human greed and stupidity through a mass of regulations and prevent it from running amok. The KGB were indisputable monsters when measured against Western morality, but they definitely understood human nature.

Dave Harrison| 2.6.09 @ 2:23PM

You could say the root of the evil is fractional banking with no reserves. We could also blame Nixon for breaking the Bretton Woods accords, but the sad reality is that banks took their eyes off the road and hands off the wheel. Congress may have enacted laws to increase lending to the "poor and disadvantaged", but it was the banks that completely threw caution to the wind. That said, there is no good way for the Fed to control the monetary supply now - no matter how low lending rates go. Since the worth of fiat currency is just based on "faith" instead of something with a true intrinsic value, until faith in the Dollar is increased we will see no improvement in the current situation. Personally, I think the days of King Dollar are over forever. We can print all the money in the world, prop up the money supply by having the government create jobs and pay people who are unemployed to help cycle the money around, and the economy will eventually improve - but at what cost? We are doing ourselves no favors by devaluing the Dollar. The long term risks of hyperinflation are what worry me the most. It is the poor and the middle class who stand to lose the most once the Dollar is devalued.

JP| 2.6.09 @ 2:24PM

Jerimiah,
"But then you say that the 50s -- generally regarded as a happy time for most Americans in the middle class -- was a creation of the unconservative Eisenhower."

During the 50s, the US dominated the world economically like no other nation before or since. Europe and Asia was in shambles and/or behind the Iron Curtain. At that time we had a growing native population that was untouched by war, and full of energy after 20 years of deprivationa and war. From 1931-1947 our living standards dropped either due to the Depression or War. It would have been hard not to improve them.

BTW, the rich (those who earn over $250,000) pay 90% of all taxes; those who earn less than $65000 currently pay $0 in income taxes. Corporations don't pay taxes, as they pass thier tax liability unto consumers. Taxes are considered expenses.

JP| 2.6.09 @ 2:38PM

Dave,
...", but it was the banks that completely threw caution to the wind. That said, there is no good way for the Fed to control the monetary supply now - no matter how low lending rates go.

The Federal Reserve Chairman Greenspan held interest rates too low for too long. Banks were borrowing money from the Fed virtually for free. Banks and mortgage companies in turn loaned this "free money" to home buyers at 5-7% interest. They were making a killing. The desire to expand the mortgage lending by lowering qualifying standards was bound to occur. The atmosphere was highly combustible when one considers the political fall out from not loaning money to the poor. Mortgage securities were thought to be the answer. Mathmaticians who could compute risk analysis were in high demand. Foreigners joined the party in droves. And it was no surprise to see such socialistic nations as Iceland and the UK buy into the real estate boom. Thier nations reaped huge tax revenues.

Human nature is to blame. Greed is powerfull. And if a CEO at Bear Stearns or Sachs played it conservative and passed on the party he would have been fired. Cheap money is at the root of every bubble. Banks are run by humans.

Obama Rulzz| 2.6.09 @ 4:08PM

Nope, you guys are wrong, it's ALL BUSH'S FAULT. Everything is Bush's fault.

This morning when my toilet didn't flush, I blamed Bush.

Obama Rules| 2.6.09 @ 4:14PM

JP, you write that "the rich (those who earn over $250,000) pay 90% of all taxes; those who earn less than $65000 currently pay $0 in income taxes. "

Where do you get your facts?

ruth| 2.6.09 @ 4:15PM

Nice feint, Jeremiah. I knew you didn't have an answer because there are NO successful socialist countries. You liberals offer no answers--you just tuck tail and run when challenged. Government is not the solution, it's the problem--especially evinced right now by Obama's circus theatrics. If this incompetent clown can't even get his cabinet together, how in the hell can he save our country? I'd say it's a joke, but I'm not laughing.

Nick| 2.6.09 @ 4:36PM

Ruth,

Don't forget, these fools who voted for CHANGE with B.O. have found out they voted for essentially the Bush foreign policy.

Is Gitmo closed? No. Are the troops leaving Iraq? No. Has he gone into Pakistan to get Usama Bin Laden? No. Who is Secreatary of State? Hillary the hawk. Who's still at Defense? Sec. Gates. Where's the change?

Pat| 2.6.09 @ 4:43PM

In the American Idol style pantheon of great excuses, "we only meant well" is the one that always gets the nod from the judges to leave immediately for Hollywood and future stardom. Politicians always mean well, voters always believe them. Throw in "it's for the poor" or the 100 megaton nuke "it's for poor children" and everyone is nodding along in time.

But then "we only meant to do good" somehow becomes "what's in it for me". And it's considered indiscreet, even gauche, to ask: "Yeah, and how much was in it for you?". When your motives are pure, we don't ask what you get out of it - that's not important since your welfare and the greater good happen to coincide. So, we can't ask Mr. Obama if he personally benefitted from the CRA as a former "community organizer". Maybe he did and maybe he didn't - that wasn't important at the time, it's considered irrelevent now the damage is done.

And nobody asks why we want the poor to become homeowners - that should be obvious, and if it isn't, then don't ask. We also ignore the lesson, usually learned at substantial cost, that "what's in it for me" is often disguised by "we only meant to do good", the selfish motivations hide in the shadow of the blinding altruism of doing good.

In retrospect, we have a strange and irrational tolerance for those who would do only good. The sorceror's apprentice unleashes powerful magic, doesn't know how to stop it from laying a path of destruction and ends up being praised for his willingness to experiment - as long as it serves the fiction of "helping" others. And the amusing end to the tale is the sorceror pats his apprentice on the head, hands him back his wand and begins to patiently clean up the mess.

Nick| 2.6.09 @ 4:53PM

Mr. Harrison & JP,

I have a question. Thomas above likened this meltdown to musical chairs. How many of those left without a chair were the "flippers" with three, four, five mortgages?

I remember back in September, for about 2 seconds, the flippers were mentioned, along with the people who should never have been given a home loan, as the ones who were defaulting on their loans. And then you never heard about them again. Were these guys a major factor or not in the bubble bursting?

ruth| 2.6.09 @ 4:57PM

Nick, you're right. The liberals just wanted to get hold of the domestic agenda, and they are doing that right now with the stimulus package. We've got big time liberal pay-off going on. It's really outrageous.

Obama Yo Momma| 2.6.09 @ 4:58PM

ruth, you're an idiot.

cincinnatus | 2.6.09 @ 5:03PM

I can't find a link to the 3d page of this article - you know, where the author mentions ACORN & the Cloward-Piven angle

Obama Rules| 2.6.09 @ 5:14PM

Liberal clowns (neoplasm) insult because they have no argument. They only get elected when they cheat, hence ACORN.

Jeremiah| 2.6.09 @ 5:19PM

Ruth --

Denmark, Norway, Sweden, Iceland, Holland, France, England, Spain, Switzerland, and Belgium.

Nick| 2.6.09 @ 5:21PM

Pat,

Very astute posts.

By the way, anyone see B.O. last night? Could there be any more clearer evidence this guy is a puppet? He couldn't even have the S-CHIP signing ceremony without teleprompters!!

The only question is who has their hand in his back making him talk?

Jeremiah| 2.6.09 @ 5:29PM

Nick --

Dude. Attack Obama because he's liberal. Fine. Or wishy-washy. Fine. Or whatever.

But do yourself a favor. After 8 years of Bush, the LEAST articulate man ever to hold the office of president, do you for a second imagine that anyone who knows anything actually believes Obama is somehow a puppet or in need of a teleprompter.

You guys may say you believe it, but you don't.

If I were you I'd find a way of lampooning Obama that at least has the ring of truth.

ruth| 2.6.09 @ 5:36PM

Those are small countries, Jeremiah, their economic systems wouldn't work here. Also, I challenge the success of their economies.

ruth| 2.6.09 @ 5:44PM

Jeremiah, you're wrong, I've been stunned at Obama's incompetence in nominating his cabinet. W. may have been inarticulate, but he was head and shoulders above Obama's weak performance the last two weeks. Why do you think the stimulus package is facing growing resistance? He looks like he's in over his head.

Thom| 2.6.09 @ 6:05PM

One of the winners in this crisis, at least so far and enabling mechanism for increased foreclosures not mentioned by Peter Wallison is local governments which tend to be Democrat controlled. Most local governments derive a substantial portion of their operating budgets from property taxes. Mine have double in 5 years as my assessment has more than doubled in five years. My local Democrat controlled city council has found at least 5 reasons it needs my money more than I including funding an underfunded pension program. After 5 years of double digit runs up in assessments and property taxes it begrudgingly reduced the rate about 10% or less than one year’s jump in taxes. Anything more than that and the sky was going to fall I hear. With that goes a more than doubling of my property insurance bill with which a mortgage must usually have. All total this adds up to an additional month and a half in additional mortgage payment for me I would not have under normal circumstances. I’m on record as saying to my Real Estate assessor that if another fool with a subprime mortgage buys a house like mine for half again what the City thinks mine is worth now I’ll be living in a tent. Assessed values are a function of the market; the effective tax rate is entirely a function of government greed. Local governments in Urban areas have gone a long way toward helping many people into foreclosures that otherwise would have avoided it.

Plato| 2.6.09 @ 6:11PM

The Spectator is a right-wing publication supported by the conservative Mellon Foundation. The function of the magazine is to promote right wing ideologies to people who read it--in other words, it preaches to the choir. One of the few commenters I've seen who is singing off key is Jeremiah--and maybe one or two others. The rest of you, for the most part, are right on key complete with the vitriolic name-calling. This whole "salon" is a pile of ideological crap.

Ex-Donkey| 2.6.09 @ 6:15PM

He is in over his head.

He tried governing for 2 weeks, and that hasn't worked out, so it's back to what he does well: campaigning.

Plato| 2.6.09 @ 6:19PM

You're right on key, Ex-Donkey

Ex-Donkey| 2.6.09 @ 6:22PM

C'mon, Plato...

Most of the vitriolic name-calling comes from your side.

And who's looking to shut down talk radio with a reinstatement of the "Fairness Doctrine?" Who thinks free speech needs to be controlled and regulated?

Why, it's none other than the whining lefties on your side.

Jeremiah| 2.6.09 @ 6:29PM

OK, now something must be said regarding the so-called Fairness Doctrine.

Folks, it's a strawman.

NO-ONE is pushing for the fairness doctrine. The only people who mention it are Rush Limbaugh and Sean Hannity.

It's a canard.

And if you think right wing vitriol on the radio is matched by anything said by leftists, you're crazy.

Plato| 2.6.09 @ 6:31PM

What makes you think I'm a leftie, Ex-donkey?

Jeremiah| 2.6.09 @ 6:47PM

This is I, Jeremiah, and I am an unrepentant leftist, and a tax and spend liberal.

I am the last man.

Nothing could be more silly and depraved in a bunch of middle class men writing in support of policies that undermine their own economic security.

However, we will work for that for you.

Just as liberals worked to assure that children went to school rather than work in factories, and that your water was relatively safe to drink, and that sensible regulations were in place to protect the food your children eat, they will continue to work for you.

Nick| 2.6.09 @ 7:30PM

Jeremiah,

If you were me, you would know mathematics is a science and the earth orbits the sun. President Bush never needed a teleprompter at his signing ceremonies.

And last night, without a teleprompter, B.O. could hardly string two sentences together. Yeah, real Daniel Webster you guys have latched your fortunes to there, bleeding hearts.

PS- Real successful list of countries you put together, Jeremiah. Isn't Iceland bankrupt?

Jeremiah| 2.6.09 @ 7:35PM

Nick --

Isn't Iceland?

Isn't the USA?

Nick| 2.6.09 @ 7:42PM

Pluto,

Why would one waste their time reading "a pile of ideological crap"?

Jeremiah, your confusion stems from the problem that while Debbie Staben-cow (d-Mich) does resemble Rush & Hannity combined, she is in fact one person pushing the fairness doctrine.

Nick| 2.6.09 @ 7:46PM

Jeremiah,

So you admit your list is a lie. That's progress I guess.

sestamibi| 2.6.09 @ 8:13PM

Jeremiah, you're an idiot. All those countries you named have stagnant economies. Until recently they've also had homogeneous populations. When you live in a place where everyone is named Johansen, everyone is family and socialism can paper over things for a while.

Once those "enlightened" places invite hordes of Muslim outsiders to settle, and the perception is of transfer of wealth from the formerly indigenous group to the new invaders, we'll see how well socialism works. Ain't multiculturalism great?

Plato, you're an idiot too. Of course this site is everything you said, and most of us want it that way. If you don't like it, don't visit.

ruth| 2.6.09 @ 8:24PM

Plato doesn't sound very platonian; in fact, he sounds down-right nasty like most liberals. Jeremiah, read Drudge today? Fairness Doctrine is definitely in the news. We're not bankrupt yet, but we will be after this stimulus crap is passed and implemented.

ruth| 2.6.09 @ 8:38PM

Jeremiah, stop lying. The disgusting garbage on Huff/Post, DU and Move-On couldn't be repeated here. 7 1/2 years of you leftist morons screaming BusHitler has permanently coarsened debate.

Pingback| 2.6.09 @ 8:48PM

Instapundit » Blog Archive » PETER WALLISON: Origins of the financial crisis. Reader links to this page. Here’s an excerpt:

…of women who are … MORE ON MADOFF, GEITHNER, RANGEL, DODD, ET AL., in the Tampa Tribune: “Americans have been taught t… » February 6, 2009 PETER WALLISON: Origins of the financial crisis. Reader Richard Samuelson writes: “If government removes requirements and pushes banks to lower standards, is that ‘deregulation?’” Posted at by Glenn Reynolds at…

S.L. Toddard| 2.6.09 @ 9:56PM

Jeremiah, are you crazy? All the countries you mentioned are BROKE. Except Switzerland which, incidentally, is NOT a socialist country.
You're really dumb. Extremely d u m b. You are a liar and an ignoramus. You're a liberal.

Ex-Donkey| 2.6.09 @ 9:58PM

Jeremiah & Plato,

You guys are nothing if not consistent. At the risk of being accused of being vitriolic, you are

Ignorant. Foolish. Complicit.

S.L. Toddard| 2.6.09 @ 10:07PM

Hey Jeremiah! I found your picture on Salon!
http://img47.xooimage.com/files/5/e/3/square-large-mic-af0fba.jpg

Pingback| 2.6.09 @ 10:27PM

Root causes. « True Sailing Is Dead links to this page. Here’s an excerpt:

…find ourselves afflicted with today. Except these men and women aren’t dumb. They realize that the poison won’t heal. They just don’t care. If you care (and I think that you do), check this out. There are reasons that things happen in this world. Things cause other things. Nothing happens by magic. Our current economic crisis can be explained. If we’re to fix it, we’ve got to…

DaveinPhoenix| 2.7.09 @ 12:01AM

Hey, can someone tell me why 7 of the top 10 richest people in the U.S. House of Representatives are Democrats ? And why are the top two richest Democrats in the House of Representatives from California - which is bankrupted ? I don't think all the little guys in California are getting their money's worth out of their reps. It's funny how there's so many rich Democrats in the U.S. House of Representatives. I thought that was known as the "people's house". It doesn't seem so if most of the top twenty richest members of the U.S. House of Representatives are Democrats. And we're talking tens of millions of dollars in net worth here, not just a few paltry millions. Go to OpenSecrets.org if ya don't believe me about the fact that 7 of the top 10 richest members of the U.S. House of Representatives are Democrats. I wonder why everyone thinks that Republicans are rich, when it's just the opposite ? Can you imagine ? Most of the top twenty richest members of the U.S. House of Representatives are Democrats. I wonder where they got all of their money ? How can I get a job like that ? That's really cool that Democrats are making so much money in this terrible economy. Maybe I should learn to be like a Democrat and I can be rich too someday...if it works good enough to make 7 of the top 10 richest members of the U.S. House of Representatives are Democrats, then it's good enough for me.

Pingback| 2.7.09 @ 12:19AM

Who Got Us To Where We Are, And How - CTVoter2010’s blog - RedState links to this page. Here’s an excerpt:

…Democrats • John McCain • stimulus • Congress Recent Posts Log in Sign Up Who Got Us To Where We Are, And How Posted by CTVoter2010 ( Profile) Saturday, February 7th at 12:15AM EST No Comments The American Spectator has a good article in the February issue that walks you through the beginnings of the mortgage market crisis that has contributed so heavily to the floundering economy. Here’s the intro,…

Pingback| 2.7.09 @ 12:19AM

Who Got Us To Where We Are, And How - CTVoter2010’s blog - RedState links to this page. Here’s an excerpt:

…Democrats • John McCain • stimulus • Congress Recent Posts Log in Sign Up Who Got Us To Where We Are, And How Posted by CTVoter2010 ( Profile) Saturday, February 7th at 12:15AM EST No Comments The American Spectator has a good article in the February issue that walks you through the beginnings of the mortgage market crisis that has contributed so heavily to the floundering economy. Here’s the intro,…

Pingback| 2.7.09 @ 2:21AM

Weekend:Myth-making and setting the record straight - The True Origins of This Financ links to this page. Here’s an excerpt:

…the prescription is more regulation of the financial system; if instead government policy is to blame, the prescription is to terminate those government policies that distort mortgage lending. Read more « Weekend: Commonbread - Daniel and the Babylon Lions Post a Comment Name * Email * Website Comment Notify me of follow-up comments via email. « Home Pages About Jim…

Kafka| 2.7.09 @ 4:37AM

For two days I have noticed, whenever I choose to, an inner coolness and indifference. Yesterday evening, during my walk, every little street sound, every eye turned towards me, every picture in a showcase, was more important to me than myself.

loan-holder | 2.7.09 @ 7:46AM

I have looked over your blog a few times and I love it.

Robert Rosencrans| 2.7.09 @ 9:14AM

Somebody asked about the taxes. The top 1% pay 39% of all taxes. Here's a link to an excel spreadsheet directly from the IRS.

http://www.rushlimbaugh.com/home/menu/irs_screen_grab.guest.html

Solo| 2.7.09 @ 10:24AM

To Jeremiah:
Quote:
" WHY are good, hardworking, decent people in such terrible debt? Is it simply that they have not been held "accountable," or are there other reasons?

Maybe if we look at the causes of middle class economic insecurity honestly, we'll find the causes of our current squalors.

It seems to me that in the 40s, 50s, 60s, and even well into the 70s, American working families had it better.

Who was in charge then? Why were things so much easier? Why could my mother stay at home with us in the 70s and my father afford a modest but certainly comfortable house on his blue-collar earnings? "

The answer to your query is in the tax burden placed on the middle class to pay for an ever expanding local, state, and federal government.
Add in excessive regulation of business and the government entering the medical services industry through Medicare and Medicaid and the inflation of costs caused by these interferences squeezes the middle class from both ends.

One spouse now has to work just to off-set the taxation and regulation by government.

You cannot tax and regulate a society into prosperity.

DaveS| 2.7.09 @ 11:26AM

The earlier post talk of 'covering the losses' is nonsense. You may retain solvency, but you still lose assets. The lending to people who couldn't pay and had no stake in not paying (i.e. some equity) is the heart. Giving money to banks to cover troubled assets 'sounds' okay - but banks operate prudentially and wouldn't touch the assets of this kind unless absolutely required by the receipt of TARP money. Paulson got around his whole arrangement for the benefit of banks - which isn't inherently bad but it doesn't get to the problem in a focused and measurable fashion. Please realize the same 'home ownership' push is being galvanized into yet another 'bailout' push - but this time only the governments at all levels are getting stimulated. This is recipe for disaster. We are in a deep hole and refuse to drop the shovel.

DaveS| 2.7.09 @ 11:33AM

It's taken just days to go from the man who touted 'hope' to the man who's peddling despair - uless he gets his way. An exhumed Reagan would be more useful to us than this WH clown about whom even the MSM is beginning to have some tardy doubts.

DaveS| 2.7.09 @ 11:35AM

Final passage of this monstrosity will be by voice vote - you'll see.

Jeremiah| 2.7.09 @ 12:14PM

Solo --

I would agree with you that the tax structure disfavors the middle class (although this is not the typical Rush Limbaugh ideology, which claims that only the wealthy pay taxes).

The middle class is saddled with a high burden of regressive taxation, particularly in the form of local taxes, government fees, college tuition to state schools, and so on.

Shifting more of the burden to progressive taxes (the opposite of Bush's "tax cutting" measures, which INCREASED the burden of people in the middle by making local governments more dependent upon regressive tax revenues) is precisely the Democratic party platform, and always has been.

You cannot have it both ways: you cannot identify with the wealthy and their political operatives on the one hand, and have ownership of the true middle class grievances on the other.

In other words, as I said above: you cannot serve two masters.

If you are middle class, you must have a moral solidarity with actual middle class interests: infrastructure investment, educational spending, health-care reform, market regulation, and progressive taxation. That is the political program of you and probably everyone to whom you are related by blood.

The day of identifying with Mr. 14 Houses and 5 sportscars -- as though just by mouthing free market platitudes you put yourself in the running for waking up one day to find yourself (Shazam!) wealthy like they are, and in need of all those Bush tax cuts -- is passed.

In politics, your friends are the ones who have to work just like you do, not the people on Wall Street who had the big frat party during Bush's watch.

Robert Rosencrans| 2.7.09 @ 12:49PM

Jeremiah: Rush does not claim only the rich pay taxes. Mr. Limbaugh links to the IRS tax tables which proves the rich pay all the taxes. Here is the link to the IRS excel tables and another link to a New York Times article which spells it out.

http://www.rushlimbaugh.com/home/menu/irs_screen_grab.guest.html

http://www.nytimes.com/2007/01/08/washington/08tax.html?_r=2&adxnnl=1&oref=slogin&adxnnlx=1168287624-Z9kDCrEbywzklcB0Uw5+SA
Though tax cuts for the rich were bigger than those for other groups, the wealthiest families paid a bigger share of total taxes. That is because their incomes have climbed far more rapidly, and the gap between rich and poor has widened in the last several years.

The study offers ammunition to supporters and opponents of Mr. Bush’s tax cuts, which are all but certain to touch off a battle between the president and the Democrats who just took control of Congress.

Democratic leaders have taken pains to avoid an immediate fight over the tax cuts, most of which are scheduled to expire at the end of 2010. But Democrats are looking for ways to increase revenue well before then, in part because they want to spend more on education and energy without increasing the deficit.

The top 1 percent of income earners paid about 36.7 percent of federal income taxes and 25.3 percent of all federal taxes in 2004. The top 20 percent of income earners paid 67.1 percent of all federal taxes, up from 66.1 percent in 2000, according to the budget office.

By contrast, families in the bottom 40 percent of income earners, those with incomes below $36,300, typically paid no federal income tax and received money back from the government. That so-called negative income tax stemmed mainly from the earned-income tax credit, a program that benefits low-income parents who are employed.

Put another way: rich families were the undisputed winners from President Bush’s tax cuts, but people in the bottom half of the earnings scale were not paying much in taxes anyway.

Plato| 2.7.09 @ 1:25PM

Sestamibi, that is the most intelligent statement I have read on this site. This "salon" is a morality play of good vs. evil. What a waste of time.

Jeremiah| 2.7.09 @ 1:26PM

Robert Rosencranz --

What all these figures conveniently ignore is -- among other things -- the disproportionately large burden of taxation foisted upon the middle class in the form of REGRESSIVE taxes at the local and state level.

You are talking only about progressive taxes -- and yes, of course, the wealthy pay most of those. That's the point.

The wealthy pay more because they OWE more.

Put it this way:

The wealthy were the winners of Bush tax cuts, and the middle class were the LOSERS because local and state governments became even more dependent upon regressive taxes for revenues.

Whenever Limbaugh starts claiming that only the wealthy pay taxes, I am utterly amazed. Do the middle class men in his audience NOT pay property taxes to fund their children's schools? Tuition at their local state colleges? Increasing state and local fees? Absurdly high medical costs due to our bizarre mess of a health care system?

Look, folks. The reactionaries want you to THINK that tax cuts for you are just "welfare," but they're not.

Wake up, Americans!

Reactionaries are now what they always were: a tool of the rich.

Jeremiah| 2.7.09 @ 1:30PM

And the middle class were ALSO the losers because Bush's tax cuts are now inhibiting the government from taking the proper action to curb the effects of the recession.

This was, of course, part of the point. The "starve the beast" philosophy.

The "beast" is, however, merely aspects of liberal boondoggles like -- oh, I don't know -- the infrastructure, the education system, electricity production, the regulatory system ... whatever the socialists are up to these days.

Jeremiah| 2.7.09 @ 1:33PM

Working people, unite!

Your masters have convinced you that one day you will be just like them.

That is only true if you turn the masters into table waiters, and the captains into stewards.

Turn the world upside down. THAT is what justice looks like.

Plato| 2.7.09 @ 1:40PM

Forget it Jeremiah. Your Lamentations fall on deaf ears. Read your Old Testament.

Pingback| 2.7.09 @ 2:54PM

Why your government is responsible for this mess - SailNet Community links to this page. Here’s an excerpt:

Search Sailnet: forums store LinkBack LinkBack URL About

Robert Rosencrans| 2.7.09 @ 4:14PM

Jeremiah: Since everyone who owns property pays property tax that would be not impact the overall effect of income tax. In fact, property taxes are fairer since everyone pays the same amount.

You also missed the New York Times article which showed that since taxes were cut, taxes on the rich doubled. Perhaps you can't read.

wilky| 2.7.09 @ 4:20PM

" To put it a different way, social cohesion creates contentment and respect for traditional institutions.

Wealth disparity leads to cynicism, irony, sarcasm, corruption, acquisitiveness, and a sense that institutions are just there to bolster the exclusive claims of the wealthy on available resources. "

Really? Something else that went out the window in the 60's and 70's was the regulation of your negative emotions on an individual level. Like envy. Back then, "keeping up with the Joneses" was met with ridicule and shame, because it was mostly a mirage. Today, nobody cares, they're to busy getting theirs.

Someone further up talked about "good intentions." I saw Madonna on Leno a ways back and she was talking about something that she did and went wrong and hurt someone. Now the reason I remember is she said "my intentions were good" then she turned to the audience and said " right? I had good intentions" as she waved her arms trying to get the audience to applaud, which they did, enthusiastically. In my day growing up, I wouldn't have been applauded, but hit with , "the road to hell is paved with good intentions." Doesn't socialism fall under that category?

Lets review your liberal boondoggles Jeremiah. The infrastructure, OK, but aren't the dems now telling us that we're killing the planet because to many of us are using it, I guess we should file this under "the road to hell" category. The education system, yes you got the kids out of the fields and into the classroom. Now if we can just get the system to teach them to think critically instead of how the system wants them to think. When my 9 year old granddaughter comes over and tells me that I really need to vote for Obama, which she did, the system needs to be cut down. Electricity production, my state gets 80% of its electricity from coal. Another "road to hell" moment, huh? The regulatory system, the one Bush kept asking to reign in Fannie and Freddy but Barney said were just fine?

ruth| 2.7.09 @ 4:29PM

Why is it just for the person who has worked his/her a** off his whole life to give it to someone who hasn't worked? How is that fair? Jeremiah, not everyone is a trust-fund baby. My dad worked 15 hours a day to support his seven children and my mom--why should his wealth be stolen from him? You wouldn't like this if you had money. Jackass. Go ahead, kill the goose that laid the golden egg--we can all live in a third world country together. It's so incredibly stupid and based on envy. Envy is ugly, and for losers--go make your own damn money.

Pingback| 2.7.09 @ 5:10PM

Belmont Club » Here I come to save the day links to this page. Here’s an excerpt:

…(fiscal, monetary, trade, investment, industrial, income, labour, and developmental), or events related to political instability (terrorism, riots, coups, civil war, and insurrection).” The American Spectator argues that a the economic meltdown of 2008 was in part the result of bad government policy on the economy. From that perspective, the market is simply discounting the bad political decisions of…

Mike| 2.7.09 @ 5:59PM

Bob and Walliston both reference predatory lenders as a cause of the housing crisis. How can that be when the only direct victims of the housing crisis have been the lenders? Predatory borrowing is more like it. I still have yet to see a convincing profile on an actual victim of predatory lending.

Is it Hilda the cleaning lady who bought a McMansion with a 2% teaser rate, no money down mortgage and now can't cover the reset rate? Sure she's going to lose the house, but it was never really her's in the first place. She lived it up for a couple of years and then gets to walk away from any recourse. The rest of us have to deal with the hangover of her, and other like her, cutting in line for the American dream.

S.L. Toddard| 2.7.09 @ 8:01PM

Jeremiah just wants to spread our wealth in his pockets. Hey Jeremiah, Switzerland is as much a socialist country as you got 57 states.

Jeremiah| 2.7.09 @ 8:20PM

Not my pockets, Toddard. Not mine. I have the needs of a monk. Give me books and a place to lay my head at night.

And not your wealth, Toddard, I think I can assure you. The wealth of people who are actually wealthy.

S.L. Toddard| 2.7.09 @ 8:27PM

Who asks for your opinion, you liberal bloodsucker! Talk the talk and walk the walk. You have no needs and you enjoy being homeless? Don't force us to follow your example

Jeremiah| 2.7.09 @ 8:30PM

How do I know Mr Toddard is not wealthy?

Good question.

Because people who are actually wealthy do not sit around reading conservative websites.

That's reserved for those in the middle class desperately looking around for someone to blame for their discontent.

Generally, they get the wrong answers though. Rather than the true elite, the men with all the money and power, they're asked to displace their grievances onto anthropology professors, and George Clooney, and Nancy Pelosi, as if by some miracle "liberals" had not only learned the art of organization (believe me, folks, it'll never happen) but had been miraculously transmuted by God Almighty into Supreme Masters of the Universe.

But this is what Catholics call vincible ignorance: you all know damn well that the "elite" that dominates your lives and imperils your security is not composed of anthropology professors, or Hollywood actors, or even trial lawyers and school teachers: deep down you know who the real elite is, but you want to hold out hope that one day you too will own 5 houses and 8 sportscars -- if only you work hard enough!

Well, there's nothing wrong with dreams. But what does Joe the Plumber do BEFORE he suddenly gets rich and buys his boss's business? And if he has kids, what about them BEFORE he miraculously gets his talk radio program and grows fabulously wealthy? (Oh, yes. You didn't think I knew about THAT fantasy, did you? Don't worry, comrades, Jeremiah knows all.)

He and you and your family will continue to benefit from the work "liberals" do on your behalf, elevating spending at schools, and building bridges, and seeking cures for diseases (80% of ALL new drugs are developed in publicly funded universities), and preparing for hurricanes, and so on. Even if you have bought the whole Sean Hannity clap-trap. But when you're ready, you should join the good fight and side with the angels.

Jeremiah| 2.7.09 @ 8:31PM

I'm not homeless. I got a mansion in Malibu. But I feel bad about it. That's why I sold the furniture and voted Obama. Isn't it smart?

Jeremiah| 2.7.09 @ 8:33PM

I'm not homeless, Toddard. I have a pleasant little apartment. I'm content with what I have.

Again, I don't want anyone to be homeless. And yes, I don't mind if someone with 10 homes has his "pocket picked" to get some people in out of the cold.

Sorry -- it seems like an unfair metaphor. But you introduced it.

Jeremiah| 2.7.09 @ 8:36PM

Liberal bloodsucker?

Who is sucking your blood, Toddard?

Who actually has power over you and your relatives?

Is it me?

No. It's bankers, and Wall Street hotshots, and their hitmen in Washington. It's the people who ask God if it's OK to bomb another country, and God answers (as he always seems to do), yes.

Believe me, Toddard. Liberals aren't your problem.

Jeremiah| 2.7.09 @ 8:37PM

False Jeremiah:

I'm not from Malibu, God knows. I'm an east-coaster, and I've got no mansions. Believe me, fraud.

S.L. Toddard| 2.7.09 @ 8:39PM

Your bridges collapse and you can't prepare s.hit for hurricanes as demonstrated by the crass ineptness of Louisiana's liberal governor and New Orleans liberal mayor. You don't know how to efficiently use the money you steal. You just know how not to pay taxes and how to betray your country. You're a liberal and you just farted.

S.L. Toddard| 2.7.09 @ 8:40PM

In A minor.

S.L. Toddard| 2.7.09 @ 8:47PM

We will bury you so it won't happen again.

Jeremiah| 2.7.09 @ 8:48PM

Rubbish.

Government waste is incredibly over-rated.

Sure, there's corruption and fraud and waste. It's a huge, complex system.

But you benefit from it everyday. You just notice when something goes wrong.

And -- best thing about it -- if you don't like who's running it, you VOTE them out of power. Try to do that with Wall Street, comrade.

ruth| 2.7.09 @ 8:48PM

Interesting that liberals don't mind if someone gets 'his' pocket picked. Notice that they never say 'my pocket picked'? Jeremiah and his minions are destroying what is exceptional about our country; the ability to live our dreams. What a tragedy that such small, pitiful men are deciding our country's fate. Small yet hubristic. Jeremiah, you won't be able to do this without punitive measures; but of course you already know that. Socialism is just communism with its claws retracted, right?

ruth| 2.7.09 @ 8:51PM

You can put wall streeters in jail--obviously not politicians--or Barney Frank and Chris Dodd would be frog marched to jail.

ruth| 2.7.09 @ 8:52PM

ACORN has corrupted our election process.

Jeremiah| 2.7.09 @ 8:54PM

Toddard --

"We will bury you" ....

Now I seem to remember someone else saying that....

How will did things turn out for him?

God... that must suck. Trying to get all tough and mean, and realizing you just quoted Kruschev.

S.L. Toddard| 2.7.09 @ 8:56PM

Jeremiah? No hard feelings dude? It still puzzling for normally balanced human beings like most conservatives are, to witness the stubborn dedication of the living dead who come to this blog to preach their evil and pervert lifestyle and enjoy to have their butts kicked. Kinda like the suicide of the lemmings

Jeremiah| 2.7.09 @ 8:56PM

I love it.

ACORN has corrupted our election process.

Yes, to be sure. They somehow muscled in over 6 million votes this last time around.

God, you guys give liberals WAY too much credit.

You have no idea how disorganized and impossible to lead the liberal is. He's cantankerous, rebellious, impertinent, disrespectful, irreverent, and constitutionally uncomfortable following orders. And yet you would have us believe he and his friends derailed the "election process." Yes, sure he did.

Jeremiah| 2.7.09 @ 8:58PM

Living dead?

The market is the realm of the living dead, my friend -- frenzied Moloch-worshiping ghouls.

I assure you, I'm very much alive, and no one among you is a match for me.

S.L. Toddard| 2.7.09 @ 9:02PM

Oh I could also quote Saddam, Adolf, Joe and Benito. It would be a pity to let the liberal murderers have a monopoly on harsh words. You should know.

S.L. Toddard| 2.7.09 @ 9:05PM

Your ego needs another Air Force One.

S.L. Toddard| 2.7.09 @ 9:10PM

*He's cantankerous, rebellious, impertinent, disrespectful, irreverent, and constitutionally uncomfortable following orders.*
We know that already. That's the reason why he has a set of rules for him and another set for the vulgum pecus...

S.L. Toddard| 2.7.09 @ 9:21PM

*Because people who are actually wealthy do not sit around reading conservative websites. * Yeah right. If you say so. I guess they'd rather haunt liberal websites in order to flush the Democrats with their hard earned money.

Jeremiah| 2.7.09 @ 9:43PM

Well, It's getting late. I give up.

S.L. Toddard| 2.7.09 @ 9:45PM

Good Night Jeremiah. See ya.

Draconis| 2.7.09 @ 9:51PM

The article and most of the comments are about what mistakes were made and what to do about it. But what if the "mistakes" were deliberate and had an objective?

LBJ's War on Poverty cost $6 trillion over a thirty year period. The results were disastrous for poor families, and the cost went straight to the bottom line of the national debt. How did we happen to subsidize an ongoing disaster for thirty years before taking corrective action? We did it because the Democrats initiated the WoP and they wanted it, protesting it's end even though it was financially and politically untenable.

The end of the WoP was not the end of the assault on American financial strength. The WoP was replaced by the Democrats' mortgage follies that cost an additional $1 trillion, and precipitated the global financial collapse, $30 trillion and counting.

So, for a period of over forty years the Democrats have sponsored and promoted policies that have a direct cost of $7 trillion, that have damaged American society, particularly the poor, that have severely damaged the American economy (without considering the worldwide meltdown), and that have left us with a Marxist president whose first major official action is to push a "stimulus" law that does not stimulate but does provide another trillion dollars to Marxist constituents and programs. Are these all innocent mistakes?

Your call.

ruth| 2.7.09 @ 10:21PM

You liberals aren't rebellious, Jeremiah. Just look at you: You claim to be a big pro-life guy, yet you march in lock step with Nazi Pelosi (who marches behind NAMBLA), Dingy Harry and Obomber (the infanticide proponent) in order to realize your Marxist goals. Not so rebellious at all. You have no principles; like all liberals, you prostitute yourself in order to acquire power. Don't be too self satisfied just yet; Americans are a fickle lot, we tend to build up people just to destroy them.

ruth| 2.7.09 @ 10:25PM

And fixing elections is another way to acquire power, that's why you liberals spend billions of our (never your) money to facilitate the process.

Dave Lincoln| 2.7.09 @ 11:57PM

Great point, both Wilky and Ruth, about the left-wingers and envy. That is really the problem. Jeremiah and his cohorts just can't stand that there are people with lots more money than other, many of them hardworking, people. They picture all of the rich and upper middle-class as wearing top-hats, having butlers and Rolls-Royces, etc.

There are some rich people out there (most of the Democrats, it always seems), like, say, I don't know, the Kennedys, who do live in this manner and have had everything handed to them. Some have never worked a day in their lives (say, like the, I don't know, Kennedys?). Most well-off people have earned their money through hard-work, maybe with their hands to start out with, but usually later, via white-collar work as an entrepeneur. The left-wing is just flat-out jealous that there are people who did so well for themselves, usually due to their being so much smarter and hardworking than said left-wingers.

Jeremiah faults the "elite" and defines them as conservative - I assume bankers, stockbrokers, and the like. These people are necessary for capitalism to work, but definitely not all that is required. Wealth is created by individuals, none of whom are bankers and stockbrockers. These are the people the left-wing says are "exploited" while trying to vote in more ways to take these hard-working people's money. It doesn't help, if, to get ahead in life, you get put into an extremely confiscatory tax bracket. Why get ahead then?

The comment about being able to vote out the government elite (which they are) versus not the capitalist elite ridiculous. There is no reason the government has to do a good job with anything, as the gov't elite will always stack the deck via laws, while the capitalist elite can be easily voted out due to "power of the purse or wallet". The problems occur when the capitalist "elite" have the arms tied and are forced to do something that would be normally bad for business. i.e. give out loans to bad risks (riskly loanee, risky loan due to lack of collateral, etc. as the detailed article described). That is when things go very wrong.

Well, that was a long one. To sum up, if this great envy could be contained, maybe the left wing could realize that some of the "masses" from last year are the "capitalists" of this year, and vice versa - it makes life interesting.

Get rid of your envy, lefty's, as it is one of the 7 or 8 deadly sins. You'll feel better, too.

BTW, very civil discourse, Jeremiah - your friends must be ashamed of you ;-)

Dave Lincoln| 2.8.09 @ 12:00AM

Well, I'm sure it is very late for this, as this article is a few day's old, but almost everything that Mr. Wallison writes about has been described in (possibly) less business-style articles for weeks and months by Mr. Steve Sailer of iSteve.com, I believe, but you can find his excellent work on VDare.com also.

Good night.

ruth| 2.8.09 @ 12:21AM

"All that it takes for evil to flourish is for good men (and women) to do nothing," (Edmund Burke).

Osamas Pajamas | 2.8.09 @ 1:50AM

Sounds like a great analysis of the mortgage mess, but also check out economist Murray Rothbard's little book, "What Has Government Done To Our Money?"

Pingback| 2.8.09 @ 1:54AM

What Really Caused the Financial Crisis | The Blog of Record links to this page. Here’s an excerpt:

…Women WWII Archives February 2009 January 2009 December 2008 November 2008 October 2008 Pages About What Really Caused the Financial Crisis By: Al Published: February 8th, 2009 When a crisis is caused by government policy, giving the government even more power over the economy will only ensure more crises in the future: PREVENTING A RECURRENCE of the financial crisis we face today does not require new…

Thomas Jackson| 2.8.09 @ 2:24AM

The government pushed social engineering without regard to risk. This was done because those who pushed such policies didn't care about risk realizing failure would expand the government's control and limit cpaitalism and free market policies.

You will notice there have been no prosecutions of those who abused their duties and exposed their firms to abnormal risk. There have been no prosecutions of those who pushed NINJA loans.

Why is this? Why have financial institutions risked their futures over loans that were at best stupid and what financial analysts Guido and Luigi would have tewrmwed criminally stupid and recommended breaking knneecaps, doing?

Clearly these government policies were advanced with a wink and a nod, that the taxpayer would be on a hook and not to worry. Affrimative action loans would feather the nests of one and all.

Except for the law abiding homeowner who sacrificed for years to put down 10-20% of his mortagage and then saw his home's value cut bu 33-50%. Nor were the thrifty who sacrificed for years to built a retirement portfolio.

As usual the politically un connected were sacrificed.

The law abidding were sacrificed.

The thrifty and hard working were sacrficied.

The cronies, the corrupt, the race baiters and the reality based profited by plumbing the stygian depths of corruption.

Does this cesspool have a bottom? I doubt it as we see what the Obamas offer us. Leadership that doesn't obey the law. Caterwauling cresecendoes of toxicity giving us clueless slogans and more bleating about victimhood.

The nation is bankrupt when we can elect those who would pluner the national treasury in the name of compassion while enriching themselves ala the Clintons or the Daschles or Obamas.

It is time to water the tree of Liberty.

Pingback| 2.8.09 @ 5:15AM

Brass Knuckles › Bush Tax Cuts Did Not Cause the Deficits links to this page. Here’s an excerpt:

…Lehman Brothers, a company I truly loved working for and will miss dearly as I look back years from now. Instapundit points to a fantastic article by Peter J. Wallison in the American Spectator discusses the real origins of the crisis we find ourselves in now. Two narratives seem to be forming to describe the underlying causes of the financial crisis. One, as outlined in a New York Times front-page story on

Ken Larson | 2.8.09 @ 9:18AM

Whether or not the average US Citizen knows it, the United States is creating the second-largest government/industrial complex in our nation's history. It is envisioned as a tail of bailouts to the financial industry, the automotive industry and others who show up with their hands out and their lobbyists in tow. It is also comprised of state governors who are poised to invent yet another form of pork with federal representatives and senators at their sides while raising local taxes for the citizen back home. This speculative panacea cannot survive.

HISTORY

The longest running and largest consortium of this type is the US Military Industrial Complex (MIC), funded each year at an amount many times the Wall Street and automotive bailouts combined. It is the elephant in the room in the burgeoning financial crisis, carrying the weight of wars, weapons systems and a pentagon/corporate financial relationship based on cost plus and time and material contracts since World War II:

http://rosecoveredglasses.blogspot.com/2008/09/two-collapsing-towers-wall-street-and.html

IMPORTS AND EXPORTS

We are importing goods and services and borrowing money from the Chinese, the European Union, Japan, Korea, India and other developing countries at a rate unmatched in our history. Loan proceeds are being used to fight wars and bail out our bankers, car makers and state governors.

Our largest export today is our public debt and our credit rating is slipping.

THE ILLUSION

What shall the prospective, second-largest government/industrial complex be called, “The Department of Wishful Thinking”? It is being financed with money borrowed from entities future generations will owe as the US kicks the financing can down the road like it has for the last 60 years.

No doubt Washington will attempt to regulate the outlay, put in auditors and control mechanisms like the Federal Acquisition Regulation and Cost Accounting Standards that evolved over the years on a reactive basis dealing with the white elephant scandals in the Military Industrial Complex. But somehow those controls have never been able to stop the mammoth waste, fraud and abuse that occur in the MIC.

Big money attracts greedy people, not only in the MIC but also on Wall Street and in the corporate boardroom. It also buys influence and crooks in government.

FACTS

The natural order of economics is still out there. Washington's money-and-power-influenced, artificial reality cannot survive what historically has been the rise and fall of booms and busts in the last 100 years. Economics is now on steroids through high technology, the Internet, mass communications and frauds that cross national borders like cobwebs.

The MIC will be scaled down by collapse. The Russian MIC led to that country's financial demise. It is now apparent that we did not outspend the Russians at weaponry and interventions. We simply had a better credit rating that is now maxed out

The other government agencies will be re-scaled and downsized as well but not by any specific action taken by the pending or future federal establishment. The over 50 entities that make up the federal government, together with their corporate outsource services, will be shrunk dramatically because the US is broke. The feds will fight to preserve the artificial reality, but US financing and credibility on the world stage are drying up and the creditors are suffering.

No new administration can change the above facts by riding on the taxpayer's back with "Social Improvement", " Public Works" and "Creating Democracies in Other Countries" mantras. Such policies in the past have led to foreign interventions, thousands of young soldier’s s, bureaucratic growth in Washington and bloated corporations performing low quality service contacts.

Annual budget deficits and the national debt are at intolerable levels.

ECONOMIC REALITIES

The US will come home from military adventures abroad because it will no longer have the money to run them and it will cease bailing out failing commercial establishments because there will be no funding for that.

The US will re-align priorities at the state and the national level much like all the little "Joe the Plumbers" throughout the country, who are toting skinny 401K's without jobs. They represent the present and future tax base upon which this country will run. America will not spend its way out of this dilemma because there will be no cash or credit left to spend.

The US will demonstrate financial prudence out of necessity, align spending with available revenue, downsize the federal government and its corporate cadre, cultivate technology and the small business base and take care of its most important constituent here at home - the average tax payer.

The US will understand the above are not political objectives but economic realities that are here and now. World economics will not allow a new, financial, government/industrial complex to emulate or replace the MIC.

bernardo| 2.8.09 @ 1:24PM

We've come a long way from talking about mortgages. Getting back to that, it seems clear that the government had a hand in creating the crisis by pushing for loans to poor quality borrowers. It seems equally clear that a whole lot of lenders and financial institutions took the bit between their teeth and eagerly and voluntarily made markets for loans to the completely unqualified, presumably on the foolish notion that the value of the collateral would always go up. Then there were the home equity loans, a device for helping mortgagors who were not over-leveraged become so. We were set up for trouble whenever the real estate bubble would begin to deflate. What we really need to come to understand is how all of this ballooned into a financial crisis. People say that the failure of Lehman was pivotal but really who knows? Certainly no one in Washington is giving us the facts in any clear and meaningful way.

Marc Jeric| 2.8.09 @ 2:51PM

"Liberals" (aka our socialists and revolutionary marxists) call this economic crisis Bush/Cheney doing. They are rewriting history as it happens - you remember, it is the liberals, not Reagan, who destroyed the Soviet Union. These are the facts:
1) Bush inherited the Clinton recession of 2000-2001;
2) that recession was deepened by the Clinton-caused terrorist attack of 9/11;
3) Bush tax cuts resulted in tremendous economic growth 2002-2006, almost 5 years of 4-5% yearly growth;
4) in 2006 the Democrats took absolute power in Congress;
5) they enforced by threats of fines and prison the Community Reinvestment Act whereby the banks were forced to give mortgages to "underserved minorities", many of them on welfare, who could not pay their monthly payments;
6) that was the direct cause of the present economic crisis of 2007-2009 and continuing, completely caused by our socialists.

ruth| 2.8.09 @ 5:09PM

I agree, Marc, but Bush did us no favors. He spent money like a drunken sailor, (and he doesn't even drink!). Also, repubs in congress were hogs at the trough, too.

Jeremiah| 2.8.09 @ 8:31PM

Dave Lincoln --

Your idealization of the wealthy as just normal people who happen to work harder is ludicrous.

If the wealthiest guy in town were say 10, 15, even 50 times wealthier than the average Joe, I'd say the capitalist ideology of hard work leading to riches might be true.

But when the richest guy is 300, 400, even 500 times wealthier than the average man, I have to stop and THINK.

Could it be? Could it be he works 500 times harder than everyone else. Or, is monetary policy, energy policy, and foreign policy making him into the happiest Welfare Queen the world ever saw?

If you think you can break your back and sweat your way towards being RICH -- and I mean, super-super RICH, because that's what we're talking about here -- then you're just simply wrong.

90% of Americans remain in the socio-economic class in which they are born. Of the great western democracies -- even including those like England with a far more rigid class structure -- we are the LEAST socially mobile country.

Why is this? And if you answer, "liberals," you're fooled again.

Baz| 2.8.09 @ 10:19PM

Jeremiah,

You forgot China, Japan, and Korea. Ruth's astonishingly proud of her(?) ignorance.
Ruth can't name a single successful country with a small-government model like she proposes, not even in history.

wilky| 2.9.09 @ 12:06AM

"90% of Americans remain in the socio-economic class in which they are born"

This percentage is way to high. To qoute the dreaded Wiki, "Class ascendancy—namely that each successive generation will have a higher standard of living than its predecessor—is a central theme in American literature and culture and plays a key role in the American dream."

I'll admit that someone in poverty will struggle with this more then those born into a higher class, but if someone really wants better for their child will sacrifice for them. As CSN&Y;will say, "teach your children well." Unfortunately, many of those(children) in poverty don't exactly have a good home life.

"But when the richest guy is 300, 400, even 500 times wealthier than the average man, I have to stop and THINK"

Think what? That these people must have screwed somone to get all that money. That they didn't provide somebody with something of value?

Maybe you are thinking of Hollywood, the court jesters, that tell you how they feel your pain then run home to their 10 million dollar mansions?

S.L. Toddard| 2.9.09 @ 9:08AM

Baz, what's your problem with ladies, pretty boy? Pretending to doubt they're for real gives you an excuse to insult them? Even our Jeremiah manages to be polite and educated. Go back to Leavenworth and ask for the special little boy rear end corrosion treatment. You're the kind of guy(?) to get hooked to it. If you were not so busy displaying your total absence of manhood, you would know that EVERY attempt at small government has been successful, but the libturds didn't like them at all as they made them feel even more useless and they just couldn't live with the concept of trusting people and leaving them alone. Therefore, as democracy usually allowed them to go back to power, they would seize the opportunity to screw everything up and blame it on the structural weakness of free market, the right wing conspiracies, the greed of bankers or another invasion of locusts... A good example is Ireland who was in a sorry state in the 80's with high unemployment and heavy taxes; in the 90's it decided to clean up its act and it's been an economic showcase (just like Singapore) for the European Community. Needless to say the Baz's and the Bob's who infest the European Parliament didn't like it at all and voted for more taxes, more government employees and more unions and threatened Ireland with economic sanctions if it wouldn't submit to their liberal agenda. We're still waiting for the outcome, but thanks to the very libertarian Czech President of the Parliament, it is gonna be quite interesting.
One last thing, Baz: Switch to "Barf" because I will anyway and you really make me puke. Fortunately I don't have to deal with rude wimp in my unit. Baz off, Barf.

ruth| 2.9.09 @ 1:50PM

I never said I was talking about the super rich, but they don't scare me like your little-man mind set. The super rich, like the Kennedys, won't be affected by your garbage socialist policies anyway, just the people in the middle who've managed to pull themselves up by their own hard work. Jeremiah and baz, people like you are envious because you will never have wealth; so you decide to level the playing field by coercively taking from others. Socialism is for losers--it doesn't work, never has, it goes against human nature; people will not work extra hard to support those who choose not to work. But you already know all of this because you're haters, and this is just you way of payback for those who are better than you. Liberals are losers.

ruth| 2.9.09 @ 2:01PM

Baz would cite China as a successful socialist model. China's totalitarian control of its people is so complete it forces abortions on those with more than one child. Baz is just your ordinary, run of the mill liberal/socialist: He's into that boot on your neck style of governance.

Jesus is coming back| 2.9.09 @ 2:45PM

Climate change, forest fire, floods. crime and violence, child sex abuse, lack of employment to make money, Wars, homelessness. It looks as if the WASP will reap their just rewards after all.

What goes around come around.

Hesus is coming back again| 2.9.09 @ 3:14PM

Fannie & Freddie, AIG, the BANKS, Crime and Violence, sex abuse, adultry, theft, fraud, mass murder. Riglious hatred, Racism. lies theft.
This is the only Religion of the WASP. Any thing that is SATANIC and EVIL, I am going to sit back and watch the coming of the Lord, it will make my day. The rvenge of the Red Indians and Black people, the Aboriginese, the poor Africans across the Globe. I shall sit back and watch Satans Kingdom fall, and burn down one by one I shall have the biggest laugh in HISTORY.

Hesus is coming back again| 2.9.09 @ 3:30PM

I am Daphne the insane speaking my usual poorly written and poorly spelled garbage. Get me to an asylum ASAP!

Pingback| 2.9.09 @ 8:45PM

GayPatriot » Why I can’t support the president’s “stimulus” links to this page. Here’s an excerpt:

…Street Journal, John B. Taylor showed How Government Created the Financial Crisis, echoing a point (but with different data) that Peter Wallison made in the American Spectator about the True Origins of the Financial Crisis. No Comments » No comments yet. RSS feed for comments on this post. TrackBack URI Leave a comment Name (required) Mail (will not be published) (required) Website edToolbar(); var…

Baz| 2.9.09 @ 10:43PM

Ruth -- we're talking economic success. Draconian social laws are separate and have nothing to with this conversation.

Toddard --
My manhood?!?! Wow. How very junior high school of you. I've met men named Ruth, and didn't want to presume just because it's commonly a woman's name, thank you. Of course, there's no way to know whether or not Ruth has anything to do with her real name, so I didn't want to assume.

Trying to be polite is all.

Anyway... Ireland? Interesting. Hadn't heard that one before. Which part of Ireland's system says "small government?"
- The 41% top income tax bracket? (with one of the most progressive tax structures in the world)
- The socialized medical system?
- The VAT (sales tax usually around 15%)?
- The recent large government spending on the DART, Luas, and Metro public transportation systems in Dublin?
- The 1-2% income tax surcharge recently introduced?

You see, there were a lot of factors involved in the Celtic Tiger years (which are by the way, over. Current unemployment is higher than in the U.S.) -- The Belfast Accords, the Tech Boom world-wide (incidentally, there was an Asian tiger at the same time in Thailand, Malaysia, and Indonesia -- tech-fueled housing bubbles that burst after only a few years), and the great foreign development investment that felt safe in the tech boom with a politically stable Northern Ireland. Oh, and an economically savvy US President.
So I don't really see a "small-government" model there. Sorry. How about India? Very small government. Unstably so. Pakistan? Ditto. Oh, Ethiopia! They're government is so small, they can't control the warlords, clans, and factions, and lawlessness is rampant. Good stuff.
In fact, Jared Diamond makes a good argument that strong central organizations are essential to the cohesion of a society. Weak governments invariably lead to the balkanization and dissolution of a society.

ruth| 2.10.09 @ 12:02AM

Totalitarian social policies have everything to do with this conversation, Spaz, er, Baz. You just don't want to talk about tyranny because it's unpleasant and you don't want to show your hand. Don't bother pretending, we know what you Marxists are all about. You question my name/gender because I have more cojones than you. But that's not too tough, considering you're a weak, whiney willy of a liberal.

Pingback| 2.10.09 @ 4:18AM

The true origins of this financial crisis, Peter Wallison « Atitudini fara platitudin links to this page. Here’s an excerpt:

…Spranceana Technorati Blogs that link here Memoria Culturala see all videos The true origins of this financial crisis, Peter Wallison Posted on februarie 10, 2009 de Ilie Catrinoiu The true origins of this financial crisis. Filed under: Iti recomand « Sarah Brightman & José Cura Leave a Reply Click here to cancel reply. Name (required) Mail (will not be published) (required) Website…

Baz| 2.10.09 @ 9:58AM

Umm... where did I whine? What exactly did I say that's so Marxist? So please tell me what the connection is between economic success and China's draconian (I said it twice so that maybe this time you'll remember) one-child policy?

Cojones? I'm willing to go toe-to-toe with anyone in this liberal-hostile environment, so don't try to tell me about cojones as you hang out in the relative safety of like-minded people.

I've already explained about the name thing, and if you can't/won't understand, I don't have time to explain how this whole Internet thingy works.

Where's the substantive response to any of my points?
Anyone? Bueler? Bueler?

Or if you wanna just name-call and smear, I'm a big boy and I can take it. Cojones. Sheesh.

ruth| 2.10.09 @ 4:56PM

Baz, you're a liberal male--I know you're weak. I know you have an agenda and frankly, you bore me. Go back to DU, you belong there. Obama is a disaster, and not very smart. This country is screwed.

Pingback| 2.10.09 @ 5:22PM

Stimulus Package Shrinks Economy, Expands Welfare Rolls | OpenMarket.org links to this page. Here’s an excerpt:

…downplaying its costs. Many economists oppose the pork-laden stimulus package, which does nothing to address the root causes of the current financial crisis. Those root causes included the Community Reinvestment Act and federal affordable-housing mandates, and political and legal pressure to make risky sub-prime loans. « Geithner’s “bad bank” is a big bad idea: fix bad…

Pingback| 2.10.09 @ 6:57PM

CUBA COMES TO AMERICA!! « FactReal links to this page. Here’s an excerpt:

…end, more PIÑATA coming: * BOHICA: Here comes $2 trillion TARP II WHO CAUSED THE FINANCIAL CRISIS? If you still think it was only Bush’s fault, read: * Financial Crisis 101 * The True Origins of This Financial Crisis * DEMOCRAT CONGRESS NEGATIVE IMPACT ON DOW JONES: click image for enlarged graphic & analysis Yes, Bush was the president when the failed bailout started but it was a Democrat…

S.L. Toddard| 2.10.09 @ 7:26PM

Barf, don't be more stupid than usual. Where did I write Ireland has no government? I live in Europe and I can tell everybody here that next to France or Italy or Sweden, Ireland is small government and as this is Europe it can't help being (partly) a nanny state with an inefficient and expensive (!) free health care system and pork barrel expenses. Otherwise, the tax rate is the lowest in Europe. Of course unemployment is higher and growth is lower than in US and the best days are over. But they are over for everybody, thanks to the Messiah, Hillary, Fanny and Freddy who started this mess. Name a successful socialist country, and please do not mention Cuba.

Baz| 2.10.09 @ 8:36PM

Well, since Ruth won't even engage in a proper debate and just wants to talk about cojones, and Toddard doesn't seem able to quote me accurately, or even remember where Jeremiah and I've already listed several successful socialist (by your standards) countries, I'm just wasting breath and time.
Although I'll quickly point out, since you raised it Toddard, that Fannie and Freddie only hold about 20% of the sub-prime mortgages. The other 80%, the banks did all on their own. Even that they could absorb if they hadn't multiplied the risk a hundred fold by getting into the credit-default swaps that Phil Gramm pushed into legality during the lame-duck phase of Clinton's presidency.
Why can't conservatives muster a decent argument, follow rules of debate, and skip the juvenile insults? Baffling.

Nick| 2.10.09 @ 10:44PM

Baz,

China turned to free market principles 30 years ago. Japan's socialist policies kept them in a recession for over a decade. South Korea is only successful because they haven't had to pay for defense for 60 years.

The most successful limited government model was the U.S. of A. for about 157 years. Now for the last 76 years we've been battling the forces of evil, i.e. socialism, with more losses than victories I'm afraid.

But I fear no evil. I am ever hopeful, and not in the B.O. sense. As the late Great Pope John Paul II always reminded us: Be Not Afraid.

Pingback| 2.11.09 @ 5:31AM

O opinie diferita asupra originii Crizei financiare « Degeabatologie links to this page. Here’s an excerpt:

…leave a comment » Tot am auzit ca Bush e de vina si politicile lui falimentare. Dar oare radacina crizei sa se afle putin mai inainte in timp, in era Clinton? Un articol interesant aici. Via Culianu. Written by machiavellian februarie 11, 2009 at 1:31 pm Posted in politici pe din dos, stanga ne bantuie Tagged with bill clinton, bush, criza economica, dubya « M-am saturat (deja)…

Pingback| 2.11.09 @ 7:10PM

Stimulus Package Shrinks Economy, Expands Welfare Rolls | GlobalWarming.org links to this page. Here’s an excerpt:

…downplaying its costs. Many economists oppose the pork-laden stimulus package, which does nothing to address the root causes of the current financial crisis. Those root causes included the Community Reinvestment Act and federal affordable-housing mandates, and political and legal pressure to make risky sub-prime loans. This post orginally appeared at OpenMarket.org. « Championing Economic Liberty…

Pingback| 2.12.09 @ 3:52PM

Hans Bader on the economic “stimulus” « Pro Patria links to this page. Here’s an excerpt:

…downplaying its costs. Many economists oppose the pork-laden stimulus package, which does nothing to address the root causes of the current financial crisis. Those root causes included the Community Reinvestment Act and federal affordable-housing mandates, and political and legal pressure to make risky sub-prime loans. Possibly related posts: (automatically generated) Stimulus support waning Keynes: An…

Fredrick Schwartz | 2.14.09 @ 8:22AM

I find it laughable that anyone is still using this code word laden rant to try to justify the economic failure that began with Ronald Reagan's deregulation of the thrifts and ended, metaphorically, when former CFO Erin Callan walked out of her office at Lehman Brothers for the last time. What in the name of mortgage backed securities are your bona fides to make an assessment of the deep, wide and fast moving river that is this current economic crisis? I know it's easy to write an article that doesn't cite any sources so that the base can be all riled up to blame minorities for their own greed and ignorance but for Pete's sake try to offer some facts instead of vomiting up bigoted theocratic rhetoric for the Rush Limbaugh Fan Club.

Independent mortgage lender wrote the bulk of the subprime mortgages and none of them are regulated by the FDIC. There is a big hole in your argument because at best CRA regulated banks loaned maybe 400 MMM USD in value constant mortgages. Out of a 15.6 MMMM USD housing mortgage market this could not have caused the bubble to burst. The decision by the markets not to accept anymore of Countrywide's Alt-A and A paper worth nearly 2 MMMM USD at the time in August 2007 just might have. Man they pay you to do this? Does your family know you're a ganef and the food they eat is a product of intellectual larceny and fraud?

Pingback| 2.15.09 @ 11:14AM

WHO CAUSED THE FINANCIAL CRISIS? « Ivette W. links to this page. Here’s an excerpt:

= "UA-52447-2"; Ivette W. Just another WordPress.com weblog WHO CAUSED THE FINANCIAL CRISIS? FINANCIAL CRISIS: OTHER POINT OF VIEWS: Financial Crisis 101 * The True Origins of This Financial Crisis CONGRESS HAS MORE IMPACT CONGRESS HAS MORE IMPACT ON THE DOW JONES THAN PRESIDENTS: Congress impact on Dow Jones click image for analysis & sources Republican Bush was the…

jejar | 2.15.09 @ 10:49PM

Thanks for taking the time to explain this in a way thats so easy to understand.

ruth| 2.16.09 @ 12:06AM

Fredrick, stuff your tired racist rhetoric. There was no blame put on minorities; the liberal clowns in congress (Frank and Dodd come to mind, white men), started this economic debacle with their stupid marxist social engineering policies. Stop trying to re-write history: you friggin' liberals are to blame for all of this mess, and everyone knows it.

Kim| 2.16.09 @ 5:11AM

Unfortunately this is a grossly incomplete picture of what really happened. If this crisis were only caused by mortgages for the poor, this explanation would make sense. However, the current mortgage crisis, was caused by unsafe lending across the board. It wasn't just poor people who over-borrowed on their homes. And it wasn't just first-time home-owners who caused the problem. Many of the ARM borrowers were "flippers". Many of the sub-prime mortgages were cash-out refinances. Some of the problem had to do with "jumbo" mortgages. Mortgage-lenders were giving risky mortgages to all sorts of people for reasons other than the CRA or because Fannie and Freddie were encouraging them to do so. And, the fact of the matter is that it was not just the liberals who were pushing housing - check George Bush's and Alan Greenspan's record on this issue. Everyone, it seems, thought that home ownership was a good thing. And it is, for those who can handle it. While government is not blameless, government policy cannot, by itself, explain the orgy of lending which occurred in the mid-2000's. The mortgage-lenders were engaged in risky lending primarily because they were making money at it and did not fully recognize the risks involved. If you want to blame the government, a better explanation would be Greenspan's monetary policies which had the market effect of inflating housing prices and making lending easier across the board. But, government policy cannot explain how a mortgage meltdown suddenly exploded across the entire financial spectrum. To explain that, I suggest that you educate yourself about credit default swaps (CDS) and the role they played in the downfall of A.I.G. And, the government had no role in the creation or use of CDS's.

tawan | 2.16.09 @ 8:50PM

Thank you for elucidating some difficult financial concepts. I enjoyed reading your article

Kim| 2.17.09 @ 5:29AM

Paradoxically, this would seem to argue for more regulation - tighter lending standards, rather than less regulation - looser lending standards. Remember that the lending standards which were being relaxed by changes in the CRA were HUD standards. And, Wall Street sure ran with the relaxed standards when given the opportunity - even when not required to by the CRA or Fannie and Freddie.

Rubicon| 2.17.09 @ 5:23PM

The CRA scared many bankers. In fact, many lending officers were threatened. Make loans or lose your job. Banks were encouraged to sell off their loans to Fannie & Freddie in securitized packages. While derivatives, etc. contributed, the fact is there was no way the credit industry could support the overvalued homes we got from all of this. Many in Congress were warned. They were warned numerous times. Even some "Republicans" called for regulations for Fannie & Freddie, but those who called for such controls, were labeled "racists, bigots, haters of poor people." Those words are on the Congressional record. They are not made up. Such accusations caused many politicians to fear for their re-election, so they shut up & refused to support those regulations. The call for them came as late as 2007 & as early as 1998. Again, check the Congressional Record & one will find most or all of this.
In the end, government lead to this with poorly written & even more poorly enforced regulations & agencies. Add politicians pandering to those special interests who buy their campaigns & we have, a crisis.
Is there a class warfare thing going on? Of course. It has since the dawn of man. Yet only in America could someone say the middle class is poor & they are maltreated. Are there policies & advantages the rich have? Yes! Should they exist? No!
But, in the end, no one invests unless there is an opportunity to make money. No one, even YOU!
We need good regulations, good regulators, & less influence of special interest groups whose goals are blind to any damage they may do, so long as they get "their" end. Look at ACORN's pressure on banks. Banks feared ACORN destroying their growth plans, their expansion plans, their credit plans for large loans or even for a larger portfolio for average loans. Banks were required to make a specific number of & dollar amount of loans, under threat of Fed regulators camping out in their offices to take every aspect of the bank apart for anything at all. Some were even driven nuts over ADA, just because they had not made enough low income loans. Realtors tried to find the best deal for their clients & mortgage lenders found the best packages, based on the requirements to make specific loans under threat of retaliation by the feds! I was there! No, I was NOT a banker. I designed, built, & operated bank facilities. But I saw & heard from lending officers & senior executives just how much pressure was put on them. Fear was the order of the day & many went nuts trying to appease those making the threats! I saw a number get the axe for not making enough of the "right" kind of loans.
Were the Banks w/o fault? Of course not. They took the easy path & made money. Their stockholders demanded that. They did not stand up to the Fed, the FEC, regulators from any Fed agency, & especially members of Congress who just sold out anyone who did not promote, enable, help, or contribute to the special interests that benefited the politician.
Bad packaging of products contributed significantly. But, those packages were based on needs, & on laws that permitted & even encourage such products to be developed.
There is plenty of blame to go around. But there is almost always one constant in this & every other crisis or fiasco we face. Its called, poorly constructed & far too much government intervention. Many regulations existed. However, they were so poorly written that this result was inevitable. Many in Congress allowed & even encouraged their special interest buddies to sit down & direct or even write regulations, policies, & even laws, w/ many of the Congressional staff who in many cases were far out of their league, just as the members of Congress were. Add ideologues to this mix who demanded all do as they say, even as they did opposite for themselves, because "they" know best & "they" want to create a specific world "they" think is how we should all live, & this all amounts to too much interference by too many whose interests were biased by "their" beliefs & "their" desires for power & profit.

WIIFM| 2.18.09 @ 5:02PM

I yahooed Peter Wallison to find out what he was doing now since he was quoted in an artilcle in the NYT 9/30/1999 :

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

It seems that he had clarity of sight when many of us did not. I suggest we listen to him. Maybe he still has vision and maybe we still do not. Everybody has an opinion. What have you predicted?

Pingback| 2.27.09 @ 11:30PM

A persistent lib myth - Argue With Everyone Political Forums links to this page. Here’s an excerpt:

…Here's one of the clearest non-technical descriptions of the historical roots of the economic crisis in the democrats' "Community Reinvestment Act": The American Spectator : The True Origins of This Financial Crisis Bookmarks Digg del.icio.us StumbleUpon Google « Previous Thread | Next Thread » Thread Tools Show Printable Version Email this Page Display Modes Linear Mode…

Pingback| 2.28.09 @ 12:47AM

A persistent lib myth - Page 2 - Argue With Everyone Political Forums links to this page. Here’s an excerpt:

…by Rick Here's one of the clearest non-technical descriptions of the historical roots of the economic crisis in the democrats' "Community Reinvestment Act": The American Spectator : The True Origins of This Financial Crisis The CRA of 1977 dealt primarily with banks loaning money to inner city minorities. The housing market crashed in the suburbs, primarily in florida and california...not the…

Mark H.| 3.2.09 @ 1:48AM

Bob, Robert R;

I am not interested in an ideological defense of either Bush or the market; I am merely trying to understand what happened. And what truly annoys me is the failure of many to answer some of the most obvious questions.

First, securitization cannot be "the cause"; housing is but one part of a large market of securatives and derivatives that seem to have worked quite well. So if it had a role, then its failure must be due to something unique and a historical.

Second, I am unsatisfied with the "market suddenly got greedy" explanations. Many "market failure" rationals assume that he market puttered along rationally and one day "got greedy" for no apparent reason. I'm sorry, but that sounds like pretty weak rationalizing.

It is obvious that there were pleanty of folks who have always wanted to buy, plenty who suddenly found themselves "qualified", and plenty of lenders and servicers suddenly loaning when, 10 years prior, they would never have considered it.

Something changed - and I'd like to know exactly what it was...WITH evidence.

Mark H.

Pingback| 3.3.09 @ 1:35PM

AMERICAN CONSERVATISM IN 2008 AND BEYOND - Page 234 links to this page. Here’s an excerpt:

…In other words, it called for the relaxation of lending standards, and it was the bank regulators who were expected to enforce these relaxed standards. MORE HERE. . . . http://spectator.org/archives/2009/02/06/the-true-origins-of-this-finan 0 Replies GA_googleFillSlot("a2kTopicLeaderboardEnd"); Previous 1 2 3 ... 233 234 Read Discussion Reply to All Related Topics Obama '08? - Discussion…

Alan Brooks| 3.4.09 @ 8:53PM

Mark H's comment is a good one, with no answer to his question available at this time-- it will take decades of doctoral thesis- scribblers dancing on the head of a pin to give a clue as to why 2008 happened the way it did.

Kim| 3.8.09 @ 10:39AM

The answer to Mark H's question seems obvious to me. This did not happen "suddenly". There was a gradual change in the market which slowly built up a "house of cards" which tumbled "suddenly" when housing prices started to decline (there is a lot of evidence of this). There were a lot of contributing factors to this "house of cards" - a glut of money looking for a good place to invest after the dot.com bubble; low interest rates as a result of the recession after the dot.com bubble and 9/11 which resulted in increased home values and made investments in things other than T-bills more attractive; government encouragement of increasingly looser lending standards in a push for affordable housing; government relaxation of regulations which allowed increased leverage and allowed for unregulated speculation on products such as CDSs; opaque MBSs, CDOs and other products were increasingly utilized in an attempt to minimize risk; improper risk assessment of such products by the credit rating agencies, "insurers" and ultimate purchasers of these products; etc., etc. There were multiple factors contributing to the "house of cards". To attribute that solely to government encouragement of affordable housing appears to ideologically driven.

Jim O'Brien| 3.10.09 @ 3:17PM

Congress coerced the banks to lower lending standards so that more minorities and poor folks could buy a house. This is the root cause of the meltdown. Now Congressmen and bureaucrats are perversely and mendaciously calling for more bank regulation to "prevent this from happening again". In fact Fed Chairman Bernanke was on TV today doing just that, in his usual quivering voice which sends a clear signal to me that he's not sure that he knows what he is talking about.

As Ronald Reagan said, government is not the solution, government is the problem.

Reil| 3.12.09 @ 2:45AM

Today was rice day, fifty-pound sacks of white rice in trucks bearing an elephant logo. The same happy elephant appeared on the bags, its head raised to the sky, the trunk curved like an S.
"Elephant," Todd said.
He said it because a laborer was staring at it intently. Which meant he wasn't working.
"That's right," the man said. "I couldn't remember the word."
He was the only other human at the loading dock this morning. The man didn't have a name, just a number, like the rest of the robots. Paris, at Night.

Pingback| 3.12.09 @ 9:27AM

CRA in the Future « Housers links to this page. Here’s an excerpt:

…Wallison at the American Enterprise Institute, to commentators on Fox News, the right is pretty uniform in the opposition to the bill. Here is Wallison in action, putting the fault both on CRA and on President Clinton at the same time. Here is Wallison, focusing the blame of the financial crisis upon both CRA and the GSEs. Generally, their solution is to tear down at the existing obligations spelled out…

Trackback| 3.27.09 @ 1:51AM

Hot mature sex movies, on Hot mature sex movies, links to this page. Here’s an excerpt:

... so to maintain a good deal from it. seo content writer first to know more about how to build cash sucking mature milf sex movies in 30 days. to turn these functions on or off, go to for a number of your total article word count so you can write your... - The American Spectator : The True Origins of This Financial Crisis ...

Pingback| 4.1.09 @ 12:01PM

Americans blame Republicans for the economy - Page 2 - US Message Board - Political links to this page. Here’s an excerpt:

…money away and we all pay the piper; Yes, the Community Reinvestment Act Really Did Help Cause the Housing Crisis - Capital Commerce (usnews.com) CRA caused housing crisis The American Spectator : The True Origins of This Financial Crisis from the American spectator __________________ People are most conservative on issues that they know most about. --Ann Coulter Sponsored links Remove advertisements US…

Trackback| 4.24.09 @ 2:41PM

Mudkipz, on Mudkipz, links to this page. Here’s an excerpt:

... literally constrain yourself to writing two or three articles and submit them to want more subscribers, I write more articles. then, hold their interest stimulated. if you are using wsbtv weather right pa lottery might find yourself in a small scale... - The American Spectator : The True Origins of This Financial Crisis ...

Trackback| 4.26.09 @ 4:11AM

11alive, on 11alive, links to this page. Here’s an excerpt:

... happy writing and promotion guide' download it free here: wjbf of list building if you follow all carroll shelby available on many directories webmasters check only the articles short. your copies with valuable and useful wjbf that is post... - The American Spectator : The True Origins of This Financial Crisis ...

Pingback| 6.23.09 @ 4:25PM

Obama Backs Corrupt Status Quo in Financial Rules Overhaul | OpenMarket.org links to this page. Here’s an excerpt:

…Agency, fannie mae, financial regulation overhaul, financial rules overhaul, Freddie Mac, Obama The mortgage crisis was caused largely by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury…

Pingback| 6.25.09 @ 11:06PM

“That the Dog returns to his Vomit …” Obama Administration Has Learned Nothing From T links to this page. Here’s an excerpt:

…Hans Bader writes at Examiner.com that Obama backs corrupt status quo in financial rules overhaul The mortgage crisis was caused largely by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie and Freddie, admits Obama’s Treasury Secretary, tax cheat…

Pingback| 7.1.09 @ 11:34AM

More Risky, Low-Income Loans: Obama Asks Congress to Create a Harmful Consumer Finan links to this page. Here’s an excerpt:

…low-income loans. The Community Reinvestment Act, which was a key contributor to the financial crisis. The mortgage crisis was also caused by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury…

Pingback| 7.16.09 @ 3:59AM

James Kwak’s Response to AEI « Rortybomb links to this page. Here’s an excerpt:

…Commission. The commission that my generation gets instead of a Pecora Commission; the people who will investigate the cause of the crisis. As far as I can tell, Wallison blames the financial crisis on the CRA. Awesome. Possibly related posts: (automatically generated) Some Humor from James Anderson on “Tweeting” leave a comment « Still Tippin Leave a Reply Click here to cancel reply.…

Pingback| 8.16.09 @ 3:20PM

Common Sense from a Common Man » Obama’s Grand Junction of Misinformation links to this page. Here’s an excerpt:

…They’re filled with mechanisms for corruption, fraud, and destruction. It’s Jimmy Carter 2.0 only much worse. Have doubts about that? Please educate thyself – “The True Origins of this Fiscal Crisis” I don’t want government bureaucrats meddling in your health care. But the point is, I don’t want insurance company bureaucrats meddling in your health care either. Obama Can…

Pingback| 9.7.09 @ 11:50PM

Right Wing Ideology Fails in Economics As Well - Page 6 links to this page. Here’s an excerpt:

…standards to the prime loan market that vastly increased the availability of credit for mortgages, the speculation in housing, and ultimately the bubble in housing prices. The American Spectator : The True Origins of This Financial Crisis __________________ "I am endeavoring, folks, to construct a mnemonic circuit using stone knives, bearskins, and the corpses of right-wing hoodwinkers and bamboozlers.&…

Pingback| 9.15.09 @ 1:58PM

Obama Financial Regulations Make Things Worse, Promote Risky Loans, Destroy Banking links to this page. Here’s an excerpt:

…safety and soundness. The Community Reinvestment Act was a key contributor to the financial crisis. The mortgage crisis was also caused by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax…

Pingback| 9.17.09 @ 10:07AM

Financial Crisis Panel Starts Today; Should the Banking Industry Worry? | The Lie Pol links to this page. Here’s an excerpt:

…GOP appointee, a longtime fellow at the American Enterprise Institute, has already claimed to have uncovered the cause of the financial crisis – Fannie Mae and Freddie Mac’s role in helping low-income homeowners obtain mortgages. While Fannie and Freddie were certainly not blameless, Wallison’s narrative is shared almost exclusively by other conservatives. Heather Murren: Named to the commission by Senate…

Pingback| 9.17.09 @ 10:15AM

Financial Crisis Panel Starts Today; Should the Banking Industry Worry? | GSA Schedul links to this page. Here’s an excerpt:

…GOP appointee, a longtime fellow at the American Enterprise Institute, has already claimed to have uncovered the cause of the financial crisis – Fannie Mae and Freddie Mac’s role in helping low-income homeowners obtain mortgages. While Fannie and Freddie were certainly not blameless, Wallison’s narrative is shared almost exclusively by other conservatives. Heather Murren: Named to the commission by Senate…

Trackback| 9.25.09 @ 10:21AM

Homeowner Insurance, on Homeowner Insurance, links to this page. Here’s an excerpt:

I know from experience that one of the best ways to make the most of your homeowners insurance is to make sure that you have an up-to-date home inventory of your personal possessions.

Pingback| 9.26.09 @ 4:30PM

The French Mentality » Economics » Bush Tax Cuts Did Not Cause the Deficits links to this page. Here’s an excerpt:

…Lehman Brothers, a company I truly loved working for and will miss dearly as I look back years from now. Instapundit points to a fantastic article by Peter J. Wallison in the American Spectator discusses the real origins of the crisis we find ourselves in now. Two narratives seem to be forming to describe the underlying causes of the financial crisis. One, as outlined in a New York Times front-page story on

Pingback| 10.16.09 @ 3:09PM

Obama administration promotes junky, risky mortgages at taxpayer expense, ignoring h links to this page. Here’s an excerpt:

…The Community Reinvestment Act was a key contributor to the financial crisis. The mortgage crisis was also caused by the reckless government-sponsored mortgage giants (”GSEs”) Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury secretary, tax…

Pingback| 10.21.09 @ 4:44PM

Mortgage Meltdown Was Caused by Government Mandates | OpenMarket.org links to this page. Here’s an excerpt:

…The Community Reinvestment Act was a key contributor to the financial crisis. The mortgage crisis was also caused by the reckless government-sponsored mortgage giants (”GSEs”) Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax…

Pingback| 10.23.09 @ 4:37PM

The Solution to the Government-Caused Housing Crisis? More Government! | OpenMarket. links to this page. Here’s an excerpt:

…safety and soundness. The Community Reinvestment Act was a key contributor to the financial crisis. The mortgage crisis was also caused by the government-sponsored mortgage giants (”GSEs”) Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Treasury Secretary Timothy…

Pingback| 10.24.09 @ 11:53AM

More Bad Mortgages on the Way, Thanks to Congressional Committee | OpenMarket.org links to this page. Here’s an excerpt:

…and soundness. The Community Reinvestment Act was a key contributor to the financial crisis. The mortgage crisis was also caused by the reckless government-sponsored mortgage giants (”GSEs”) Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax…

Pingback| 10.26.09 @ 7:42PM

Obama Administration’s Pay Caps Reward Failure and Political Connections | OpenMarke links to this page. Here’s an excerpt:

…The Community Reinvestment Act was a key contributor to the financial crisis. The mortgage crisis was also caused by the reckless government-sponsored mortgage giants (”GSEs”) Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, Timothy…

Pingback| 10.28.09 @ 11:20AM

Barney, Being Frank « The Swine Line links to this page. Here’s an excerpt:

…to address. Barney Frank cosseted the two GSEs, baby-talked them, practically wrapped them in swaddling clothes and they took the whole financial market down the tubes with them, as predicated by people much smarter than Barney Frank. But it is a beautiful thing to watch him defend himself against an attack from his left flank (does Barney even have a left flank?) by claiming he is doing all he can…

Trackback| 11.5.09 @ 11:03PM

how to fix my credit, on how to fix my credit, links to this page. Here’s an excerpt:

I can\'t believe I haven\'t been to this website before!

Pingback| 11.12.09 @ 7:13AM

Har Michael Moore utspilt sin rolle? – Gooding.no links to this page. Here’s an excerpt:

…som får gjennomgå like mye? Det burde kanskje ikke være overraskende at anmeldelsene til Moores film er enda mer fordummende og forenklede enn filmen selv. En hver som har lest litt om hva som skapte finanskrisen vet at det slettes ikke var cowboy-kapitalisme som la til grunn for nedturen, iallfall ikke som utløsende årsak. Moore har fremdeles en rolle å spille, så lenge folk ikke vet hvorfor…

Pingback| 11.16.09 @ 3:32PM

“How ACORN Destroyed the Housing Market” | OpenMarket.org links to this page. Here’s an excerpt:

…the Community Reinvestment Act without regard for banks’ financial safety and soundness. The mortgage crisis was also caused by the reckless government-sponsored mortgage giants (”GSEs”) Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax…

hgjhg| 11.19.09 @ 10:23PM

MKV Converter,
Convert MKV File

hjgjhgj| 11.23.09 @ 4:26AM

TOD Converter Mac,
TOD File Converter Mac

Pingback| 11.26.09 @ 1:48AM

Democrat House Speaker Pelosi Say Americans Want More Gov. Debt For Jobs: Call Her an links to this page. Here’s an excerpt:

…Republicans tried to reform the twin behemoths, the Democrats cried racism and used class warfare tactics to shut down opposition to reform. And this was all started by Barack Obama and his helping ACORN win the Community Reinvestment Act that lowered borrowing standards across America per threat of lawsuit and/or direct ACORN activism. Now we have the top ACORN guy in the W.H., and the Democratic lap-dog…

Pingback| 11.26.09 @ 1:50AM

Democrat House Speaker Pelosi Says Americans Want More Gov. Debt To Get Jobs: Call He links to this page. Here’s an excerpt:

…Republicans tried to reform the twin behemoths, the Democrats cried racism and used class warfare tactics to shut down opposition to reform. And this was all started by Barack Obama and his helping ACORN win the Community Reinvestment Act that lowered borrowing standards across America per threat of lawsuit and/or direct ACORN activism. Now we have the top ACORN guy in the W.H., and the Democratic lap-dog…

Pingback| 12.2.09 @ 4:47PM

The Entreblog! » Regulation, Free Markets and Keynes links to this page. Here’s an excerpt:

…commercial mortgage lenders. In other words, they have to approve every loan they underwrite. Here’s an example of the damage these highly regulated firms caused: http://spectator.org/archives/2009/02/06/the-true-origins-of-this-finan “By 2001, it was offering mortgages with no down payment at all. By 2007, Fannie and Freddie were required to show that 55 percent of their mortgage purchases…

Pingback| 12.4.09 @ 3:39PM

Ironic Surrealism v3.0 » Transcript Obama Main Street Tour: Allentown, Pennsylvania 1 links to this page. Here’s an excerpt:

…system was on the verge of collapse. Economists were warning of a second Great Depression. So from the moment I was sworn into office, I began taking a number of difficult steps to end this economic crisis. I didn’t take them because they were popular or gratifying – they weren’t. You can be sure that when I was running for this office, things like saving the banks and rescuing auto…

Pingback| 12.7.09 @ 3:47PM

Okay! I've had it! - Page 3 - US Message Board - Political Discussion Forum links to this page. Here’s an excerpt:

…Let The Inquisition Start With Frank Yes, the Community Reinvestment Act Really Did Help Cause the Housing Crisis - Capital Commerce (usnews.com) CRA caused housing crisis The American Spectator : The True Origins of This Financial Crisis from the American spectator You Tube You Tube Truth On Target: Obama's Financial Friends: Schumer, Dodd and Barney Frank blocking the housing reform and regulation…

Pingback| 12.7.09 @ 4:54PM

Okay! I've had it! - Page 3 - US Message Board - Political Discussion Forum links to this page. Here’s an excerpt:

…Let The Inquisition Start With Frank Yes, the Community Reinvestment Act Really Did Help Cause the Housing Crisis - Capital Commerce (usnews.com) CRA caused housing crisis The American Spectator : The True Origins of This Financial Crisis from the American spectator You Tube You Tube Truth On Target: Obama's Financial Friends: Schumer, Dodd and Barney Frank blocking the housing reform and regulation…

Mark R| 12.9.09 @ 8:30PM

Although the housing meltdown and the financial sectors are intertwined, the failings in one should not have caused the financial collapse. Wall Street failings are of their own doing. They saw a way to make easy money and they went into a competitive feeding frenzy with little regard for risk. When your leveraging at 40 to 1 in order to make money your doing so at great peril. Combine that with low capital reserve requirements, complex securities (CDOs), a complicit rating agency sector giving triple A ratings, intense lobbying to keep govt oversight at a minimum, a "shadow" banking system, no visible market for derivitives and CDS, the overturning of Glass-Steagall and the "uptic" rule, and a history of being bailed out by the feds when things got tough resulting in a sector that's setting itself up for a crash.

Consider these facts:
The Republican Party controlled the legislative branch from Jan 1995 until Jan 2007. And the Presidency from Jan 2001 until Jan 2009.
- How could two minority members of their respective finance committees (Frank and Dodd) be blamed for the actions of the GSEs. This means a whole lot of Republicans were complicit also.
Bush pushed his own housing agenda (ownership society) including signing legislation to assist in downpayment assistance in 2003. The Republicans could have redirected the GSEs anytime they wanted since they had control, but they didn't, why?
When Bush took office, unemployment was under 5%, the annual budget was showing a surplus, a mild recession and interest rates were trending downward. The National Debt was $5.7 Trillion. When he left, annual budgets were back to deficits, a major recession, unemployment over 8% and the National Debt at $10.7 Trillion.

Many of the largest financial subprime players like Countrywide Financial were not subject to the CRA. The CRA does not apply to private banks and REITs.

CDS were completly unregulated and by some quirky definition were not even considered insurance products, thus no capital reserve requirement.

About 25% of the home buyers were speculators :"flippers".

Most of the home defaults are confined to markets in just five states.

That the large investment houses purposely held onto large amounts of their own CDO products because of the interest rates they were earning. In 2006 - 2007 when the market started slowing they also became stuck with additional amounts.

The driving factors: lots of free money (very low interest rates) combined with securization which allowed passing responsibility to someone else, a disregard for risk by all parties, greed, unsophisticated buyers and lax govt oversight.

Pingback| 12.10.09 @ 7:46AM

Okay! I've had it! - Page 3 - US Message Board - Political Discussion Forum links to this page. Here’s an excerpt:

…Let The Inquisition Start With Frank Yes, the Community Reinvestment Act Really Did Help Cause the Housing Crisis - Capital Commerce (usnews.com) CRA caused housing crisis The American Spectator : The True Origins of This Financial Crisis from the American spectator You Tube You Tube Truth On Target: Obama's Financial Friends: Schumer, Dodd and Barney Frank blocking the housing reform and regulation…

Pingback| 12.28.09 @ 1:05PM

Government Expands Fannie and Freddie Bailout and Lavishes Money on their CEOs | Ope links to this page. Here’s an excerpt:

…to the financial crisis, without regard for banks’ financial safety and soundness. The mortgage crisis was also caused by the reckless government-sponsored mortgage giants (”GSEs”) Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, Timothy…

Pingback| 1.4.10 @ 9:57AM

Obama’s Recent $75 Billion Mortgage Bailout Fails: Harmful to Economy, Housing, and links to this page. Here’s an excerpt:

…safety and soundness. The Community Reinvestment Act was a key contributor to the financial crisis . The mortgage crisis was also caused by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac , and by federal affordable-housing mandates . But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax…

Pingback| 1.5.10 @ 7:37AM

Government Uses Takeover of Mortgage Giants to Deliberately Increase Their Massive L links to this page. Here’s an excerpt:

…“Fannie and Freddie are exempt from the rules” limiting compensation at private banks. The mortgage crisis was caused partly by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac , and partly by the affordable-housing mandates imposed on them. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury…

Pingback| 1.7.10 @ 4:28PM

More Enron-like Behavior by Administration Officials Comes to Light | OpenMarket.org links to this page. Here’s an excerpt:

…executives for carrying out such terrible policies by showering them with multimillion dollar pay. The mortgage crisis was caused partly by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac , and partly by the affordable-housing mandates imposed on them. But Obama’s proposed financial rules overhaul does absolutely nothing about the risky practices of Fannie Mae and Freddie Mac,…

lkjhk| 1.7.10 @ 9:59PM

SWF Converter Mac is excellent SWF conveting software for Mac users. This versatile Mac SWF converter can convert between SWF and all the popular video. In addition, the best swf file converter for Mac can also extract audio from video file and convert video to MP3, AC3, and AAC…as you want.
DVD Converter for Mac , also called Mac DVD converter, is famous for its powerful conversion feature. If you need do some conversion concerning DVD, it is definitely the one which could solve all problems for you.

Pengamat | 1.12.10 @ 11:53AM

it's obvious that our economic system has already fail,capitalism has already fail to bring our world better... Let's Think Out of The Box|Astaga.com Portal Lifestyle On The Net

Beauty Accessories | 2.8.10 @ 8:24AM

China Online Shop
Buy Wholesale Products

Pingback| 2.11.10 @ 10:37AM

EconomyBeat.org - user-generated content about the economy » Blog Archive » Fannie an links to this page. Here’s an excerpt:

…economybeat@prx.org The Great ReDression Fannie and Freddie and the financial crisis February 11, 2010 Jon Brooks No Comments » Last year in The American Spectator, Peter J. Wallison wrote about the political importance of determining causes of the financial crisis that blew up in 2008. Two narratives seem to be forming to describe the underlying causes of the financial crisis. One, as…

Pingback| 2.17.10 @ 1:03PM

Canada’s finance minister proposes changes to mortgage lending laws « Wintery Knight links to this page. Here’s an excerpt:

…safety and soundness. The Community Reinvestment Act was a key contributor to the financial crisis. The mortgage crisis was also caused by the reckless government-sponsored mortgage giants Fannie Mae and Freddie Mac, and by federal affordable-housing mandates. But Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac, admits Obama’s Treasury Secretary, tax…

hgfhgf| 3.1.10 @ 9:55PM

iPod to PC Transfer,
iPod to PC Transfer

gfgfd| 3.1.10 @ 9:59PM

iPod to PC Transfer,
iPod to PC Transfer

Mortgage Girl | 3.8.10 @ 7:16PM

Well poor mortgage advice can lead to plenty of headaches later on.

Peter L. Griffiths| 3.11.10 @ 2:02PM

The September 2008 financial crisis arose because leading American financial institutions all lost credit default swap bets on the conservatorship of Fannie Mae and Freddie Mac. This had been engineered by the United States Government to prevent the insolvency of Fannie Mae and Freddie Mac.

beijing massage | 3.23.10 @ 3:13AM

very godo.

Pingback| 4.19.10 @ 12:13PM

Pay No Attention to Cause « Common Sense from a Common Man links to this page. Here’s an excerpt:

…It started decades ago with the Community Reinvestment Act and later, the creation of Fannie Mae and Freddie Mac. There is not a better explanation to date of cause than “ The True Origins of this Financial Crisi s” by Peter J. Wallison. In the article is this from Stan Liebowitz of the University of Texas at Dallas: From the current handwringing, you’d think that the banks came up with…

Pingback| 4.19.10 @ 1:10PM

Trojan Horse Financial ‘Reform’ Bill Enriches Accused Fraudster Goldman Sachs, Rips links to this page. Here’s an excerpt:

…connections to reap record profits. Moreover, Obama’s legislation would do nothing to rein in the worst offenders behind the mortgage crisis, the government-subsidized mortgage giants Fannie Mae and Freddie Mac , even as it would give the government the permanent ability to bail out Wall Street firms. Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac,…

Pingback| 4.23.10 @ 1:25PM

Obama Uses Phony Rhetoric About Financial ‘Reform’ to Push Bill That Enriches Specia links to this page. Here’s an excerpt:

…Peter Wallison have demonstrated). Obama’s legislation would do nothing to curb the abuses of the worst offenders behind the mortgage crisis, the government-subsidized mortgage giants Fannie Mae and Freddie Mac , even as it would enrich the politically connected liberal Wall Street firm Goldman Sachs (recently accused of fraud), enrich left-wing lobbying groups and community organizers, and give the…

Pingback| 4.23.10 @ 2:41PM

Beware the financial Trojan horse | The Daily Caller - Breaking News, Opinion, Resear links to this page. Here’s an excerpt:

…connections to reap record profits. Moreover, Obama’s legislation would do nothing to rein in the worst offenders behind the mortgage crisis, the government-subsidized mortgage giants Fannie Mae and Freddie Mac, even as it would give the government the permanent ability to bail out Wall Street firms. Obama’s proposed financial rules overhaul does absolutely nothing about Fannie Mae and Freddie Mac,…

kophy| 4.23.10 @ 9:13PM

ArenaBetting.com dukung fair play FIFA world cup AFSEL 2010
Poptropica

Pingback| 4.26.10 @ 11:22AM

Porn More Interesting to Media Than Flaws of Financial “Reform” Bill; Obama Is ‘Lyin links to this page. Here’s an excerpt:

…experts like Peter Wallison have demonstrated). Obama’s legislation would do nothing to rein in the worst offenders behind the mortgage crisis, the government-subsidized mortgage giants Fannie Mae and Freddie Mac, even as it would enrich the politically-connected liberal Wall Street firm Goldman Sachs (recently accused of fraud), enrich left-wing lobbying groups and community organizers, and give the…

Pingback| 4.28.10 @ 2:28PM

Goldman Sachs Endorses Trojan-Horse Financial “Reform” Bill; Bill Has Payoffs for Sp links to this page. Here’s an excerpt:

…to yet more bailouts and government takeovers. Obama’s legislation would do nothing to rein in the worst offenders behind the mortgage crisis, the government-subsidized mortgage giants Fannie Mae and Freddie Mac, while enriching left-wing lobbying groups and community organizers, and giving the government the permanent ability to bail out and take over Wall Street firms. Obama’s proposed financial…

Pingback| 4.30.10 @ 12:35AM

The stimulus didn't help - Page 2 - TeamstersOnline links to this page. Here’s an excerpt:

The stimulus didn't help - Page 2 -

Pingback| 5.4.10 @ 11:18AM

Community Reinvestment Act « Pforzemer Seckel links to this page. Here’s an excerpt:

…immer wieder verändert worden. Vorallem die Regierung Clinton wollte sich nicht damit abfinden das immer wieder Hauskredite für Geringverdiener mit geringen Vermögen abgelehnt wurden. Im The American Spectator schrieb Peter J. Wallison, ehemaliger Präsidentenberater und Mitglied des SEC Advisory Committee on Improvements to Financial Reporting, im Februar 2009 einen guten Artikel, der den Hintergrund…

guo | 7.1.10 @ 5:09AM

www.wmvconverterformac.com

Correction tape | 11.17.10 @ 9:11PM

I really enjoy it! Your report feels like an A. Your artical is great! I have been to your posts before. Great post. Your artical is great! After read it, I think a lot. The content is very exciting and I can almost understand. Please keep going on and continue to add excellent posts. That's big help for me. You are tops.Great! You have done a terrific job communicating your message. I totally agree with your opinion. Thanks! Your atical is really surprising.

wholesale beads | 12.8.10 @ 4:17AM

good post and thanks a lot for you article to tell me a story

Credit RSA | 2.17.11 @ 6:53PM

It is the most accurate analysis on the mortgage crisis I've read so far. The article helps to understand the limits of capitalism when it is not regulated at all. The problem is that even after all these years, nothing is done.

Watch Hockey Online | 3.9.11 @ 12:52PM

While Fannie and Freddie were certainly not blameless, Wallison’s narrative is shared almost exclusively by other conservatives.

Watch Hockey | 3.9.11 @ 12:52PM

While Fannie and Freddie were certainly not blameless, Wallison’s narrative is shared almost exclusively by other conservatives.

Ken Clarke | 3.15.11 @ 12:38PM

Im glad this issue is starting to turn around now. more realistic lending needed to happen. the worst was traders selling derivitives on top of derivitives on these sketchy loans

stay in nice | 4.7.11 @ 1:57PM

So informative web site! Large thanks! Thanks for a good time visiting your site. It is really a pleasure understanding a web site like this filled with nice information. Thanks!

t5 slimming pills | 4.18.11 @ 5:53AM

really enjoyed this article, very interesting and informative. thanks

cedar park mortgage | 4.25.11 @ 5:13PM

This is one of the better accounts of what actually went down in the Mortgage fiasco. I hear horror stories everyday at my office.

Thanks for great writing.

internet and computer | 6.14.11 @ 4:35AM

yes I agree with you, financing is everything.

Latest Headlines

Obama’s Assault on the First Amendment

George Neumayr|87 comments

Damage Control for Dummies

Matt Purple|54 comments

Time to Go for the Kill

Peter Ferrara|49 comments

Restrain the Abusive Administative State

Doug Bandow|18 comments

Disabling American Sovereignty

Iain Murray|10 comments

The Other Gosnells

Jordan Gonzalez|12 comments

Can He Unite Virginia’s GOP?

Carten Cordell|25 comments

Undoing the Brainwashing

Thomas Sowell|12 comments

The Spectacle Blog

Congressional Democrat Outraged Over IRS Scandal

Kaylin Bugos | 12:57PM

Immigration Bill Clears Key Committee

Jordan Gonzalez | 11:56AM

Nixonian

Yogi Love | 11:54AM

Moore, OK by Steve Breen

Patrick Ryan | 11:50AM

He’s Just Not That Into You

Ross Kaminsky | 11:34AM

Curl is Right: Don’t Dismiss Benghazi

Quin Hillyer | 11:29AM

Issa’s Mistake

Ross Kaminsky | 11:11AM

Bernanke: No Need to Reimplement Glass-Steagal

Ross Kaminsky | 11:03AM

FLASHBACK TO: 1995

Pope Culture

By George Sim Johnston

A man of faith in a godless age is hitting Americans where it hurts.
Why the GOP Does Not, Like, Totally Suck

By P.J. O'Rourke

Mr. and Mrs. American Spectator Reader, let P.J. O’Rourke talk sense to your kids.
Dames at Sea

By John Corry
In the Absence of Guns

By Mark Steyn

In Britain, defending your property can get you life.
The Metaphysical Martini

By Werner J. Dannhauser
Counting the Costs of Clintonism

By Robert H. Bork

The debacle of this president’s administration is both a cause and a symptom of the decline of American values. Unless Congress impeaches him, that decline will go on unchecked. An eminent jurist surveys the damage and assesses the chances for the recovery of our culture.
Chuck McHagel

By George Neumayr

It won’t take long for conservatives to scratch this presidential wannabe off their 2008 scorecard.
The Legacy of Old John and Mother Fresh-Roasted

By Douglas Bartholomew
It’s the Best Time of the Year

By Mark Steyn

The American Christmas, like the songs that celebrate it, makes room for everybody under the rainbow. Is that why so many people seem to be hostile to it?
The Bush Crack-Up

By Brit Hume

Was the President done in by the economy, or by the politics of the economy?