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One correction in the American Spectator article… the DNC now has 57 in the Senate. Merkeley has declared victory over Gordon Smith (a RINO at best anyway) here in Oregon. I don’t believe all the votes are in and counted, but Merkeley says it’s his because they are coming from traditionally “blue” areas.
Frankly, I’d rather they wait and see the results… but noooooo.
“We really know who Obama’s community leaders are,” issue by issue, said Thomas Gensemer, the managing director of Blue State Digital, the Washington-based mobilizer of online communities created by four Dean campaign veterans.
Instead of e-mailing members of Congress, Gensemer continued, Obama’s most effective supporters will meet with them in their district offices and press them at local town hall meetings.
Trippi offered a more dramatic scenario: “Obama will be able to say these are the 10 members of Congress standing in our way on health care. Basically, it’ll be the president and the people united, with some members of Congress in between, which won’t be a very comfortable place to be.”
Uh… isn’t this “meeting in district offices and pressing them at local town hall meetings” called lobbying and special interest? Something Obama is supposed to be against?
Worse yet, it’s lobbying with an especially ugly twist… intimidation.
An easy and popular step toward transparency would be for Obama to reverse the Bush administration’s secretive policy on Freedom of Information Act requests for government records. That could be done by declaration, without congressional involvement, noted John Wonderlich, the program director of the Washington-based Sunlight Foundation, which promotes transparency.
This from a guy who’s successfully managed to conceal or thwart full disclosure on everything from CAC documents, prior writings and his personal Senate records to an original birth certificate??
Begs the question… transparent for whom?
cbullitt
15 years ago
“Copious new regulations, especially environmental, to be used selectively to ensnare other conservative malcontents.”
The environmental stuff is a double edged sword, carbon taxes will make waging war unaffordable. B ut even if he cuts the Military by 25 percent, how long before an Omar Bradley we don’t know about yet surrounds the white house and congress with a bunch of carbon belching M1s and ends our democratic experiment in totally different and nonenvironmental fashion
I did read the rest, including the comments. I’m taking advantage of your invitation to paste an excerpt in the Comments Section:
The big story, IMO, this year is that Obama really did run an issues based campaign and not one based on interest group pandering. The Republican party is still one of interest groups — social conservatives, fiscal conservatives, and national security hawks. As the party gets smaller and loses fiscal and national security segments, the intolerant social right becomes an impenetrable barrier and forces the downward spiral of the party.
Quin, Obama is as smart as Carter, as disciplined as LBJ, as politically adept as Clinton, as cool as FDR, and as good a communicator as Reagan. He is probably the best read of any President and understands history. The problem for you and the other GOPer’s is not that Obama may be an Alinskyite, but that he governs to the center and prevents Congress from going hard left. He will then have succeeded in destroying the Republican Party.
I would recommend to you and the other party faithful to concentrate less on demonizing the left, and more on putting forth the principles of Republican governance including smaller government, non-interventionism, social libertarian views, and intellectual heft. Rush and Hannity will continue demonization (which hurts the party) because they’re in the business of getting ratings, not governance.
I joined this party more than 40 years ago and don’t recognize the hate and intolerance I see in it today. You don’t win over the majority of people with hate and demonization — you win them over with policy, vision, and communication.
This “comment” sounds like you are the author, Larry. Either that, or you and comment Bob | 11.6.08 @ 7:53AM are twins on your theory that a “cold, calculating” Obama will ultimately do the right thing. The only thing that makes me think it’s not you is this Bob guys says he’s been a party member of 40 years, and you’ve already ‘fessed up about your presidential voting record….
And with your picks for president not getting into office, your business has flourished and grown. Now that you have your pick of the litter, we shall see if that remains the case, yes? So it’s not just us in a wait and see mode. You have banked on Obama, putting up the ante of your business prosperity.
Time will only tell, and frankly we will all be overjoyed if Obama manages to grow the economy, provide a structure friendly for American business, and maintain the superiority of our military. But personally, I wouldn’t put a wooden nickel on that happening at this point… based, of course, on his “just words”. I shall await to be “pleasantly surprised” as you say, but poised to fight tooth and nail on the wrong direction.
…because I don’t see that his expansion of government will be sufficiently funded by his redistribution of wealth. …I don’t see that his protectionist trade policies will do anything for American business, but will certainly remove needed competitive prices from goods the citizens use daily.
joe from chi
15 years ago
Will 2008 Be the Last Free Election?
—
2008 was free?
Obama Black Panthers Intimidate Voters in Philly with clubs!
Nope… cost Obama over $425 million. Wait, let me correct that. It cost Obama nothing. He spent other people’s cash to the tune of $425+ mil….
Evidently all those “just words” about campaign finance reform are… well… “just words”. And now, the threshold of how much cash it will take to get elected to federal office has been upped considerably. Another proud moment in US politics…. not.
Because I don’t see that his expansion of government will be sufficiently funded by his redistribution of wealth. I don’t see that his protectionist trade policies will do anything for American business, but will certainly remove needed competitive prices from goods the citizens use daily.
No, the comment wasn’t me; I “broke” with my family to become a Democrat and support Kennedy when I was 12 years old in 1960. I wrote a weekly left of center political column for my college newpaper, the University of Louisville “Cardinal.” I’d never pass myself off as a disaffected Republican.
I’ve tried several times (without success — whether censorship or spam filter, I can’t say) to post my own analysis on how I think Obama will govern. In short, he’s a calculating politician, motivated entirely by his own aspirations of personal success. I truly think he aspires to achieve historical recognition as the greatest President in history. Everything he’s done in his career to date has been done in furtherance of his career — beginning with moving to South Chicago after graduating from Columbia, the community organizing, the Harvard Law and Presidency of the Harvard law review, return to community organizing, running unsuccessfully for Congress then successfully for the state Senate. He chose his church to further his political career. Heck, it wouldn’t surprise me if he chose his wife to further his political career (to get him “accepted” into the South Chicago African American community).
He’s tossed both political positions and friends/family/individuals under the figurative bus in the furtherance of his aspirations.
But here’s the deal. He’s not a Euro-socialist ideolog. He’s not committed to some “cause;” he’s committed to himself. The only way he’ll get to be the greatest President in history is by doing the right thing by America. He understands that. He’s got a golden opportunity, and he’s not going to blow it. He’ll defend America, because that’s what he needs to do. He’ll consolidate power by squatting down to dominate the middle of the center, because this is what he needs to do. He’ll do what’s smart in the case of NAFTA (which I doubt will go beyond some window dressing stuff, the same way that Bush placated the social conservatives with speeches about Terry Schiavo and other assorted window dressings– Obama’s SCOTUS appointments will be the liberal equivalents of Roberts and Alito — qualified beyond question; legal scholars and not the likes of Hillary Clinton).
Even Pelosi realizes that she’s not going to get her way. Even Pelosi is talking about “governing from the center.”
Obama’s game is to steal the center from the GOP and force the GOP into a hard right corner. He wants to marginalize the GOP as the party of the Social Shrill.
Anyone really want to bet against him, given where the GOP is right now and what is being said right now, on this and similar blogs?
– Larry Weisenthal/Huntington Beach
Craig
15 years ago
“- Larry Weisenthal/Huntington Beach”
LOL… Huntington Beach or Huntington Post? Boy, you have no judgment. You seem to know nothing about politics. I really feel sorry for people like you. But I won’t be sorry for you personally when your country goes down the drain. You voted for that stupid idiot bum, good for you. The day you will lose your business, because you will, I will laugh at you.
P.S.: But you know what? I don’t even believe you have a business. To have a business you would have to be smart and obviously, you are not.
I’ve seen your commentary you tried to post via our internal FA conversations just recently, Larry. First I want to say that you have posted the gist of your post you want published, tho different wording, three times successfully in the comments.
You and I have had some conversations on your theory about Obama already. So I’m confused that you believe you are being censored, or considered “spam”. Your comments have gone thru successfully multiple times on different threads, as I have linked above.
I did mention before that this is a conservative blog, started by Curt. All of us that are authors may vary in our party affiliations (tho Skye has just officially abandoned the DNC post election), but we do start our posts and thread commentaries from a conservative opinion.
This isn’t Hannity & Colmes, ya know… :0). Nor is our blog world subject to any kind of a fairness doctrine (yet…). Somehow I doubt DailyKOs would publish any of my submitted posts as a guest author. And you know? I have no problem with that.
Certainly your cogent and well presented alternative positions have been welcomed as a view from the other side, and not overly laden with campaign talking points. I enjoy my cyber conversations with you, tho we may not agree on the past. As for Obama’s future? Stay tuned…. It is pure speculation on both our parts.
Ultimately, the decision to allow posts that are not necessarily conservative in nature as a “reader post” lies with Curt. Personally, as one of the contributing authors, I’m not interested in seeing this a mixture of conservative/liberal posts, as I believe it dilutes what constitutes the heart of Flopping Aces. However I am always interested in seeing the twists and turns that threads take when those like yourself enter the fray after an authored post subject appears.
I believe you have made your point about what you believe Obama’s performance as POTUS will be. And indeed, since I too believe the man is ego-driven, and concerned with self and legacy, that he will renege on many of his campaign promises… either for outright refusal of the nation to willingly go down the path of Euro-socialism, or for financial constraints. In fact, in some ways, Scott says the same when he discusses Obama on foreign affairs.
But I certainly hope that because you are not necessarily granted a top slot for your comments as an authored post, that you believe you are being censored or spammed… especially when your presence in the comments dictates otherwise.
Well, since you bring it up, I’ll talk a little about my business.
I’m a lot more Joe the Plumber than Joe the Plumber is ever likely to be. Since 1992, I’ve run a small, private laboratory, employing an average of 8-10 people over the years. I’ve never cleared more than $290,000 (adjusted gross income), but three years in the last 10, I was over $250,000 and had to pay alternative minimum tax. I’ll see my marginal rate go up 3 percentage points the next time I hit that level. But it certainly won’t be a disincentive to me.
What’s hurt is seeing my retirement account lose 45% in value over the past 18 months. Seeing the value of my investment property (one commercial; two residential) plummet. My house, I don’t sweat. It’s shelter and not an investment.
I don’t think it was a good idea to double the national debt in the past 7 years, to provide a one trillion dollar tax cut to people who didn’t need it. 9% of the national budget goes to paying interest on our debt. The trillion dollar tax cut was paid for by borrowing a half trillion from China and the rest from other creditors. The debt will eventually have to be paid back by my children. So it wasn’t a tax cut; it was a tax deferment.
Because taxes were cut so drastically at a time when we had increasing budgetary obligations (Iraq War, etc.), it was necessary for Alan Greenspan to lower interest rates to 1% and keep them there, in order to try to grow the economy enough to keep the deficit in a reasonable range. This contributed to the capital glut which had nowhere to go, so it went to mortgage-backed securities and credit default swaps.
So now we are going to raise taxes back to Clinton-era levels (when I also had some good years), to put government more on a pay as you go basis.
The years I made the most money, I also paid the most taxes.
Making enough money to pay more taxes is one of life’s more high class problems.
– Larry Weisenthal/Huntington Beach
Steve Rowland
15 years ago
Larry Weisenthal:
Sheesh! Did you just fall outta the turnip truck? Lets drop this bull about Obama and Pelosi ‘governing from the center’. If they have a centrist bone in their body, then I’m so far right that I’m falling off the table.
Quite frankly at this point I have little tolerance for anyone who voted for B. Hussein Obama, and your comments are decidedly outside that tolerance.
Check back in 4 years from now and tell me your story then.
Steve Rowland
15 years ago
Larry Weisenthal:
In your comments to Craig: who the hell do you think set the ‘alternative minimum tax’? If your retirement account has lost 45% in value Over The Last 18 Months, then you made some bad investment. The Dow has been consistently around 13,000 until the flame out Created By Democrats, by the way.
I recall reading a post somewhere on the most simplistic explanation of paying taxes as possible and I think you could capische this. I will see if can find it. By the way, how do you determine who needs a tax cut and who doesn’t.
If “The trillion dollar tax cut was paid for by borrowing a half trillion from China and the rest from other creditors”, then why was it necessary for Greenspan to lower interest rates to 1% (who the hell gets money at 1%?) if the tax deficit at the time was already neutralized by the borrowing you indicate?
“This contributed to the capital glut which had nowhere to go, so it went to mortgage-backed securities and credit default swaps.” Capital didn’t have anywhere to go?? Lord Have Mercy!
So you think raising taxes “back to Clinton era levels”, when you had your ‘good’ years will solve the problem of the present flame out of the mortgage/bank practices? Government has NEVER been on a ‘pay as you go’ basis, the more that goes to Washington, the more that is spent.
“The years I made the most money, I also paid the most taxes.” Duh? Simple arithmetic.
You guys can’t see the forest for the trees.
Steve Rowland
15 years ago
Mike’s America:
I have been telling anyone for months who would listen to me that Obama is the antichrist incarnate as portrayed in Revelation 13. He is certainly exhibiting all the primary characteristics. ie, God Complex, etc.
Steve, you misunderstand. I never had a problem with the alternative minimum tax. As I said, making enough money to pay more taxes is a high class problem. You grin and bear it, all the way to the bank. The marginal tax rate was 90% during the Eisenhower years; the ratio of debt to GNP fell sharply; people were motivated to work. Here we are talking about raising the marginal rate from 36% to 39% and Joe the Plumber says that this will take away his incentive to work hard. This attitude is precisely why he’ll never make enough from his plumbing job to ever have to worry about it.
The cause of the financial meltdown was too much capital chasing too few investment opportunities. The capital glut was exacerbated by the low interest rates which were kept too low too long in an attempt to grow the economy enough to trigger a fanciful Laffer Curve effect. Didn’t work, but did create the demand for exotic securities and swaps.
There is always a business cycle. I don’t usually give Presidents either credit or blame for economic ups and downs. But this particular perfect storm was a product of the capital markets having a glut of capital, which didn’t go into business expansion or IPOs, which would have grown the economy, but instead went into Ponzi investment schemes.
Relevant data: Only 1/4 – 1/3 of sub prime paper went through Fannie/Freddie. 2/3 to 3/4 were entirely outside the quasi federal system. Fannie/Freddie management made the same bad decisions, driven by the same motivation (profit seeking) as did entirely private sector banking management. Of all the sub prime loans, only 9% were for owner-occupied first mortgages and certainly less than 1% of all of these loans (in terms of capital) went for Community Redevelopment type loans.
Contrary to urban legend, the financial meltdown wasn’t because of any government programs to expand housing opportunities to poor people, which is precisely why McCain and all the Senators who lost their seats didn’t try to make it a campaign issue. Rather, it was entirely a product of the capital glut.
– Larry Weisenthal/Huntington Beach
road warrior
15 years ago
Well i don’t think the liberal illuminati have enough power to pull a plan like that. The election process will continue and if Obama does a good job it is going to be extremely HARD! for the republican to take back power. But if he flops like he probably will (is there really any getting out of this mess?) the right will have another great shot to get back in 4 years.
Ah Larry… Seems you took a perfecfly good opportunity to get in touch with an alternate point of view by exploring the opionions presented in the American Spectator article by Quin Hillyer and jumped straight to the planted counterpoint offered by one of your fellow Obamatons.
The second linked article should be a clue to you, if you really ARE unaware of what is going on, of the concerted effort being made by your fellow Obamatons to wreck havoc on conservative sites.
And yes, I agree with Mata, you could very well have written the comment yourself. The language is remarkably similar.
Since you failed to take advantage of this opportunity for learning and personal growth allow me to continue with the excercise and add a few more excerpts. Perhaps you may wish to read them before leaping to hit the comment button.
Watch what Michael Barone called the Obama “thugocracy” use the Justice Department to stifle dissent. Anybody who complains about vote fraud will be charged with “vote suppression.” Anybody who complains about DoJ’s actions will be charged with interfering with an investigation. Anybody who denies having interfered will be charged with perjury. Likewise, anybody who peacefully protests abortion clinics or the use of state-sponsored racial quotas will be charged with a civil rights violation. And the accused won’t be able to look to the Supreme Court for help: Anthony Kennedy’s “evolving standards” of justice will evolve to match the new zeitgeist, providing a 5-4 majority for the administration. Meanwhile, of course, Obama’s other appointments will be filling up the rest of the judiciary at a rapid clip, with nobody able to stop them.
…
What Ohio officials did in rifling through so many of Joe Wurzelbacher’s files will serve as ample precedent. (Just watch, by the way: Nobody ever will be effectively disciplined for the violation of Wurzelbacher’s rights.)
And, only when the time is right and the ground (or air) has been well prepared, will come the grand-daddy of all fights, the re-enactment of the misnamed “Fairness Doctrine.”
…
The erosions of conservative rights will be incremental. Each one will have its own justification. Each one will be supported by the establishment media. Each one will be timed so as to allow the general public to become accustomed to it, to accept it as unremarkable, or even to come to regard it as a public good for the sake of keeping conservative “troublemakers” from fomenting disorder.
And the Obamessiah, still speaking frequently to stadia full of admirers, will provide a tone of reasoned moderation, combined with further appeals to hope, in order to justify it all.
These are the sorts of things Alinskyites do. These are the sorts of tactics used by ACORN, at whose conferences Obama himself regularly taught seminars on “power.” These are the sorts of policies favored by the academic left, Obama’s old milieu — the policies that favor speech codes and stolen campus newspapers and the firing of faculty for “offensive” remarks.
Gregory Dittman
15 years ago
I don’t think one should get that paranoid over Obama’s and the Democrat’s abilities. Sure they can change some laws, but I doubt they can force their power to keep the Republicans at bay. Carter came in on hope and change back in 1976. He got in from the perfect storm. Then he ran into problems immediately. His own staff also got into the mix. Remember that alternative energy corruption known as Three Mile Island? Three Miles Island didn’t fall apart on its own, the people inside did.
If the Republican’s bread and butter policies are to be believed, the liberals will eventually blow it and want the conservatives back. They’ll want somebody to bomb Iran, allow them to drive gas powered cars and trade around the world (Democrats are protectionists). A few trade wars later and Obama will not be seen as the cool one, but the one keeping the eventual recession going (maybe we will see some stagflation).
The next Republicans should run on a hand up rather than hand out program and develop a cheaper alternative than the Democrats. I already gave my plan here on how to create jobs, fix the infrastructure, provide health care to the uninsured and balance the budget with the money the federal government already gets. It’s that type of plan where something more can be gained by not spending more.
Greg: The difference between Carter and Obama is the degree to which Obama and friends have shown an inclination to pursue anti-democratic tactics that will severly hamper our ability to make that comeback.
The chilling intrusion by state agencies whose heads were Obama supporters digging dirt on Joe the Plumber is just the tip of the iceberg.
Mike, I am personally opposed to using the fairness doctrine to try and stifle talk radio. I’ll be disappointed if the Dems try and do this. I think that Obama is much too smart to go along with this. No one listens to Rush and Sean, et al, beyond those people who’d never consider voting for Obama in a hundred years. This would be a classic “over reach,” of the type he’s determined to avoid.
I don’t understand how “complaining” about vote fraud equates with a prosecutable offense (voter suppression). Vote fraud should be prevented and punished; so should voter suppression.
Peacefully protesting anything is a first amendment right. Denying First Amendment rights is a crime. I was against McCain-Feingold. I’m very much pro-2nd Amendment. I don’t know what Obama’s personal inclinations are, but he knows the 2nd Amendment is a true third rail in American politics. He won’t go there.
Obama doesn’t have a big social agenda. He’ll try and enact an energy/infrastructure program. He’ll try to get health care reform. He’ll have to do something about Social Security and Medicare. He’ll try and get the Debt/GNP ratio headed downward again. Hopefully, he’ll keep a nuclear bomb from going off in Long Beach Harbor and keep anthrax spores out of the New York subway system (these being the true terrorist security threats, as opposed to anything at all ever going on in Iraq).
If he does those things, he’ll be re-elected in a landslide. If he doesn’t, then silencing Rush Limbaugh won’t help him.
Applying the “fairness doctrine” to stifle talk radio would be a classic over reach. Obama won’t go there. Anyway, he has nothing to fear from Rush and Sean. Their listeners would never vote for Obama in a hundred years.
The Wurzelbacher leaks had nothing to do with the Obama campaign. it’s the same sort of crud as the pre-election leak about Obama’s half-aunt:
Just the same as any kind of leak. Individuals taking advantage of their ability to access privileged information and leaking it to the press for their own purposes.
Larry Weisenthal/Huntington Beach CA
Craig
15 years ago
“- Larry Weisenthal/Huntington Post”,
You are inspired by internet’s sites who are anti-capitalism. No wonder you voted for THE MESSIAH! You are hopeless.
Lightbringer
15 years ago
“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”
“If you will not fight for the right when you can easily win without bloodshed; if you will not fight when your victory will be sure and not too costly; you may come to the moment when you will have to fight with all the odds against you and only a small chance of survival. There may even be a worse case: you may have to fight when there is no hope of victory, because it is better to perish than to live as slaves.”
“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”
Larry, there’s a few things I’d like to address, from different posts. So I’ll just repeat the pertinent phrases.
I don’t think it was a good idea to double the national debt in the past 7 years, to provide a one trillion dollar tax cut to people who didn’t need it. 9% of the national budget goes to paying interest on our debt. The trillion dollar tax cut was paid for by borrowing a half trillion from China and the rest from other creditors. The debt will eventually have to be paid back by my children. So it wasn’t a tax cut; it was a tax deferment.
And that trillion nat’l debt is set to balloon up to $4.3 trillion under a President Obama, and with only being able to calculate in about 44% of his proposed programs. The Obama campaign team did not provide their calculations and specifics to the Tax Policy Center to add in the rest.
Granted, the same has McCain in that range of nat’l debt by the same era. And that… to my very basic “smaller government” philosophy was appalling. But at least between the two big spenders, McCain’s is “spreading the wealth” differently than Obama’s. A “stimulus package” or less income of x amount yearly may sound just wonderful to many, but it just doesn’t create jobs or opportunities to grow the economy.
What it does create is the ability for Obama’s “middle and lower class” to buy a second TV, a new refrigerator, etc. Hardly a major huge boost in product sales or manufacturing, and even at that, a one time only moment. It is not a sustainable stimulus.
Obama’s grandiose plans are larger than the US wallets… including the top 3% that he wishes to burden with the bulk of it. There simply isn’t enough cash he can steal via taxes to pay for what he wants. The earning capacity is going down… and under projected Obama’nomics, will continue to go down. This is the opposite of what you call the “tax cuts to those that don’t need it”. And the first example of that is the low unemployment numbers under this current admin.
Second… why do all you guys talk about Iraq? It’s a 1/3 of the defense budget, and the $4.3 trillion Obama promises to add to the national debt is equivalent to 75 years in Iraq. You’re talking about a drop in the bucket for the proposed domestic spending. And as far as I’m concerned, the military defense is the top reason for the feds existance. Whether they spend 1/3 of that on the wars, or elsewhere is irrelevant. It’s already allocated to military use, not domestic welfare programs… as it should be.
Which brings me to the second point
Because taxes were cut so drastically at a time when we had increasing budgetary obligations (Iraq War, etc.), it was necessary for Alan Greenspan to lower interest rates to 1% and keep them there, in order to try to grow the economy enough to keep the deficit in a reasonable range. This contributed to the capital glut which had nowhere to go, so it went to mortgage-backed securities and credit default swaps.
So now we are going to raise taxes back to Clinton-era levels (when I also had some good years), to put government more on a pay as you go basis.
and from another comment…
The cause of the financial meltdown was too much capital chasing too few investment opportunities. The capital glut was exacerbated by the low interest rates which were kept too low too long in an attempt to grow the economy enough to trigger a fanciful Laffer Curve effect. Didn’t work, but did create the demand for exotic securities and swaps.
~~~
Contrary to urban legend, the financial meltdown wasn’t because of any government programs to expand housing opportunities to poor people, which is precisely why McCain and all the Senators who lost their seats didn’t try to make it a campaign issue. Rather, it was entirely a product of the capital glut.
We’re going thru some half truths here, Larry. You cannot disassociate capital from the bundled investments.. which is not a bad thing as long as you are bundling solid investments. What you had was too much money being lended on too few actual value securitized assets. And this entire economic situation is the result of an out of control housing/lender bubble that should have burst sooner than later.
And “perfect storm” is a perfect term. You say CRA had nothing to do with it. In the free market, it has everything to do with it. You cannot legally discriminate, mandating loans that will “qualify” the unqualifiable only to a certain sector of the public. Why should a guy who can’t show adequate income to debt ratios and good credit be allowed easier money than a good risk? The entire concept is insane.
Frankly, the loans created because of the redlining battles… i.e. low/no doc, ARMs, bridge loans, 80/15/5s, etal… were created in order to get the unqualifiable borrower *thru the automated underwriting systems* of Fannie/Freddie (LCI and DU, for example… all the loan officers use them). Tehse creative loans were great financial tools for many, and in high demand. And the majority who used these tools are not the problem
The easy money to risky borrowers increased demand v supply, and started driving the real estate values up from 1995-2001 at a rate unseen for two decades before.
Then came 911. 911 took an already recovering economy from the late 90s slow down (yes… there was a market slowing) and tanked it. When Greenspan dropped the rates, it was to stimulate the hit back into action.
Now it’s the easy credit money, risky buyers, and long term low rates…. the real estate prices took the already dangerous escalation to new heights. And yes, Greenspan kept the rates low for too long… he now admits.
But every bit of this still starts with the creation of easy credit in order to meet Congressional mandates. The CRA banks would never be able to handle the high demand for these (including to those that were a good risk), so the free market came in and added to the fray. That still wasn’t the problem.
You say Fannie/Freddie didn’t have these loans go thru them. You are incorrect. Almost all conforming loans end up in the Fanne/Freddie portfolio on the secondary mortgage market. The automated underwriting programs I mentioned above? All based on Fannie/Freddie guidelines for resale. And Congress, at the same time, was encouraging the GSE’s to buy up an astromonical asset ratio.
In short, the problem was not bundling, and buying up by the GSEs or anyone else. It was the bundling of bad product. Somewhere, someone along the line is going to take the hit. Then add the heavy demand vs existing supply for the unsustainable value increases.
This was all foreseeable. But none wanted to foresee it since everyone was busy lining their pockets. And that includes most especially the DNC Congressional members.
There. I have filled in the rest of your half-story… You want to give the CRA sanctioned banks a pass, and blame it on the private banking and investment industry. That’s like saying the CRA banks are allowed to bake and sell arsenic cookies, but no one else can. That way we won’t flood the market with arsenic cookies.
Mary Beth
15 years ago
At Daily Kos Hate Website Obama Told Far Left to Fool Public To Further Cause:
“Read the whole thing. Clearly, this man is no moderate.”
For anyone out there still deluded by the speeches Obama gave to woo the masses, please snap out of it. He’s not a moderate and has no interest in reaching his hand across the aisle.
Lightbringer, that middle quote is Winston Churchill,not Jefferson.
It is from his Nobel Prize winning history of the Second World War. Here is the expanded citation:
Here is a line of milestones to disaster. Here is a catalogue of surrenders, at first when all was easy and later when things were harder, to the ever-growing German power. But now at last was the end of British and French submission. Here was decision at last, taken at the worst possible moment and on the least satisfactory ground, which must surely lead to the slaughter of tens of millions of people. Here was the righteous cause deliberately and with a refinement of inverted artistry committed to mortal battle after its assets and advantages had been so improvidently squandered. Still, if you will not fight for the right when you can easily win without bloodshed; if you will not fight when your victory will be sure and not too costly you may come to the moment when you will have to fight with all the odds against you and only a precarious chance of survival. There may even be a worse case. You may have to fight when there is no hope of victory, because it is better to perish than live as slaves.–Winston Churchill
And now Larry… who said: “The Wurzelbacher leaks had nothing to do with the Obama campaign.” You’re right Larry. It was just a coincidence that state employees were ordered to do these illegal checks by the agency head who was an Obama supporter and max financial donor…
Geesh! Do you believe EVERYTHING those people tell you?
“The Wurzelbacher leaks had nothing to do with the Obama campaign.”
If I remember correctly John Gotti never actually committed any murders, he had goons to do the dirty work for him so that his hands could remain clean.
“When you choose to serve — whether it’s your nation, your community or simply your neighborhood — you are connected to that fundamental American ideal that we want life, liberty and the pursuit of happiness not just for ourselves, but for all Americans. That’s why it’s called the American dream.”
The Obama Administration will call on Americans to serve in order to meet the nation’s challenges. President-Elect Obama will expand national service programs like AmeriCorps and Peace Corps and will create a new Classroom Corps to help teachers in underserved schools, as well as a new Health Corps, Clean Energy Corps, and Veterans Corps. Obama will call on citizens of all ages to serve America, by developing a plan to require 50 hours of community service in middle school and high school and 100 hours of community service in college every year. Obama will encourage retiring Americans to serve by improving programs available for individuals over age 55, while at the same time promoting youth programs such as Youth Build and Head Start.”
“Obama will call on citizens of all ages to serve America, by developing a plan to require 50 hours of community service in middle school and high school and 100 hours of community service in college every year.“
Didn’t anyone tell Obama that Lincoln ended slavery?
I seem to recall that the US Constitution was amended to forbid precisely what is being proposed here.
And all those Volunteer organizations will be nothing more than indoctrination centers for the new left.
The American taxpayer will be asked to pay to brainwash another generation of fools.
Craig
15 years ago
Larry Weisenthal,
I did a bit of reality check on you on internet, and I apologize for not believing you for your business. I have a friend like you, who is also a researcher, but not on cancer, but on AIDS. He works at the General Jewish Hospital in Montreal and teaches at McGill University. A very brilliant guy, a genius in his field of work (Molecular Biology). But that genius was ZERO in politic and economy… lol
That often happens when someone has one or two PhD in a particular field. So since you are brilliant in your field, I will do the same thing as I did for him. I asked him to look at a video of Milton Friedman. This video was done in 2005… It is long (56 minutes) but it is an economy and politic course that you should not miss. My friend listen to it and now he knows almost as much in politic and economy as he does in molecular biology. His ideas changed for ever and he was very happy that I gave him that video.
You should enjoy it, After all, Friedman is a genius and he is the recipient of a Nobel Price on economy. I think that everybody should watch this video.
Thank you for correcting my sloppy attribution Mike’s America. Something Larry said put me out of sorts, and though I recognized the quote, it did not register in my mind that it was not from Jefferson. Normally I will create my own prose, but I did not trust myself to behave in a civilized fashion.
Larry,
I truly think he aspires to achieve historical recognition as the greatest President in history.
History is full of leaders who rose to power fueled by this aspiration. Mostly we call them despots, tyrants, and megalomaniacs. The desire to secure one’s place in the history books does not translate into properly serving the best interests, preserving the liberties, or even realistically considering the safety of the people such a self serving leader is in charge of.
Mary Beth
15 years ago
What we really need is for people to teach history to these kids so they have an idea what our country was founded on. They need to understand how precious freedom is so they can recognize socialism’s false promises of utopia for what they are.
Craig
15 years ago
Larry Weisenthal,
I want you to get back to me after you have watch the Video of Milton Friedman that I suggested to you in my comment #33.
Please watch it.
Adam
15 years ago
In several places I’ve encountered this idea that Obama will actually govern as a centrist. That he just used the left to get elected. I think it’s wishful thinking or an attempt justify voting for him. Obama had a communist mentor. He sought out marxist professors in college. He’s been a part of Chicago thug politics. He attended a church filled with hate speech for twenty years. You don’t pour sand into a cake batter and have it come out tasting like sugar. If Obama is that crafty, to use everyone he’s encountered as part of his plan to become president, then we can retire the name of Machiavelli and replace it with Obama.
Adam: The idea that the most liberal member of the U.S. Senate will suddenly throw all his beliefs overboard and govern as a centrist is so laughable that only a member of the Obama media could say it with a straight face. But never underestimate the Obama media’s ability to spin him as a centrist even though he’s parroting Stalin.
Lightbringer… No problem with the mis-cite. Larry can have that effect on people. Pretty scary that these people don’t see the problem with an aspiration for Obama to be the greatest president ever.
We are living in dangerous times.
Mary Beth
15 years ago
Someone on the Hannity boards believes that that “required” service is only for high school/college students.
Let’s say I agree with that interpretation.
It is still not constitutional for the federal government to mandate service.
People can pretty it up however you want. IT’S NOT CONSTITUTIONAL.
You say CRA had nothing to do with it. In the free market, it has everything to do with it.
No, not really. First of all, the CRA didn’t apply to private mortgage lenders and they accounted for an enormous amount of the junk loans:
Private sector loans, not Fannie or Freddie, triggered crisis
By David Goldstein and Kevin G. Hall McClatchy Newspapers
Posted on Saturday, October 11, 2008
Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height vrom 2004 to 2006.
Federal Reserve Board data show that:
_ More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
The CRA banks were mandated to show x amount of loans to minorities as proof they were not redlining. In order to do that, lenders had to create exotic loans that would get them past criteria they could not pass.
Welcome no doc/low doc and other exotic loans.
Now how many CRA banks in the nation do you think there were?
And do you think it was okay for only those minimal CRA banks to offer those loans, and not the investment banking industry? Hint.. you say yes, you will be discriminatory and against fair trade laws.
CRA banks could not handle every demand in the nation for these loans. You can not also create loans only for minorities and not available to everyone.
The demand for these loans was high, so the free market takes over and offers competitive “redlining” loans.
Again, my final sentence brings this reality to you in a simple analogy.
That’s like saying the CRA banks are allowed to bake and sell arsenic cookies, but no one else can. That way we won’t flood the market with arsenic cookies.
The problem is not that all banks were offering a loan that the CRA banks were MANDATED to offer… the problem is that we were bundling arsenic cookies enmasse.
And if you wanted to limit the amount of arsenic cookies made to only the CRA regulated banks, you are being disciminatory and racist by law.
The CRA banks were mandated to show x amount of loans to minorities as proof they were not redlining. In order to do that, lenders had to create exotic loans that would get them past criteria they could not pass.
Welcome no doc/low doc and other exotic loans.
That’s not what happened. In fact, Fannie, as you noted, can’t accept non-conforming (Alt-A, no or low document loans). The CRA requires that the loans to poor people be financially sound, not crap.
BTW, typical of McClatchys to ignore that the subprime loan business started in mid 90s, and not in 2001.
Below is a graph of the housing prices over the past 33 years. Pay attention to the red line, as it is the inflation adjusted figure.
Note that after the CRA compliance reg changes in 1995, the prices starting rising? That’s because of the new influx of risky buyers… not only from CRA banks. However rates were still higher and the housing costs could somewhat be controlled… provided Greenspan used that power of the fed.
Now, note how after 2001 the prices really soared. That’s because of 911, and the rates dropping and staying low in order to boost the economy.
Barack reminds me of Woodrow Wilson in many ways. Crisis (whether in WW’s case war or in this case financial crisis) + massive expansion of Government along progressive lines + propaganda/intimidation.
Except Barack is too young and healthy to give up the ghost 7 years in.
He’s going to finish what Wilson started. That’s his fucking “legacy” of “what’s right” for America, Larry.
Your graph does not support your argument that the regulation change in 1995 led to the increase in housing prices because the prices for the years 1996 and 1997 are flat.
Regulations effective beginning of 1995. Theoretically to affect the CRA banks
Lenders receive and must revamp loan packages with new guidelines for those.
The loans start being offered to the CRA banks
They get popular
The free market picks up on them.
And you wonder why they are “flat” for 12-24 months until they catch on from compliance creation to hitting the market? Hang… it can take the mortgage market 6-9 months just to create the new loan package and full guidelines. This stuff and the appropriate paperwork doesn’t happen overnight.
REP. MICA: What was Lehman Brothers’ exposure to the debt of Fannie Mae and Freddie Mac? And what role did their collapse play in precipitating some of your financial troubles?
MR. FULD: Our —
REP. MICA: Did it matter?
MR. FULD: Our exposure to both Fannie Mae and Freddie Mac was de minimis, sir.
SOURCE:
Federal News Service
October 6, 2008 Monday
PANEL II OF HEARING OF THE HOUSE OVERSIGHT AND GOVERNMENT REFORM COMMITTEE;
SUBJECT: THE CAUSES AND EFFECTS OF THE LEHMAN BROTHERS BANKRUPTCY;
CHAIRED BY: REPRESENTATIVE HENRY WAXMAN (D-CA) WITNESS RICHARD FULD, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER, LEHMAN BROTHERS HOLDINGS
Fannie/Freddie buys bundles on the secondary market as well. Plus no doc/low doc loans were not classified as Alt A. They pass thru automated underwriting with new guidelines for those loan programs created. Why do you think they were created to begin with??
Not all subprime loans (which is Alt A) are low doc/no doc. But even the subprime could kick out a reject vs an accepted.
And not all subprime loans were in default. It was primarily the ARMS. The fixed had a good success ratio.
Finally not only the risky borrower used these loans.
The problem still remains not bundling, but the creation of “redlining” loans that became in high demand, and passed on thru the usual securitization channels.
Nothing wrong with securitization. Been going on since the 70s without a problem. But when you bundle “arsenic cookies”, the results are disasterous.
Steve J, how many subprime loans do you think Lehman Bros made… duh
So your point?
UPDATE: I’ll clarify… Lehman Bros was an investment banker. They bought bundled secured assets. Of course they have minimal contacts with Fannie/Freddie.
So what’s the problem? That a guy buys bushels of apples? Or that someone knowingly throws apples in the bushels to sell that are rotten because it became mandated to throw bad apples into the barrel?
UPDATE #2: I owe you an apology, Steve J. I did checking, and Lehman Bros did expand into the residential mortgage market in 2003 and 2004, by purchasing five morgage companies. These subsidiaries did originate loans, which were bundled and sold to Lehman investors via their investment banking services.
Obviously they didn’t believe they were packaging losing propositions and attempting to sink their own ship by buying their own risky paper inter corporation. But sink they did… as they did not get a bailout.
So on that point, mea culpa.
However their participating in lucrative, high demand loans created by redlining compliance regs is not the problem. The arsenic cookies and rotten apples in the bushel theory still applies. It’s just with Lehman, they had their subsidiaries create many of the loans they purchased, instead of buying them from outside mortgage companies.
One correction in the American Spectator article… the DNC now has 57 in the Senate. Merkeley has declared victory over Gordon Smith (a RINO at best anyway) here in Oregon. I don’t believe all the votes are in and counted, but Merkeley says it’s his because they are coming from traditionally “blue” areas.
Frankly, I’d rather they wait and see the results… but noooooo.
Some ugly stuff from the 2nd article hotlink?
Uh… isn’t this “meeting in district offices and pressing them at local town hall meetings” called lobbying and special interest? Something Obama is supposed to be against?
Worse yet, it’s lobbying with an especially ugly twist… intimidation.
Okay, this one is good for a real belly laugh…
This from a guy who’s successfully managed to conceal or thwart full disclosure on everything from CAC documents, prior writings and his personal Senate records to an original birth certificate??
Begs the question… transparent for whom?
“Copious new regulations, especially environmental, to be used selectively to ensnare other conservative malcontents.”
The environmental stuff is a double edged sword, carbon taxes will make waging war unaffordable. B ut even if he cuts the Military by 25 percent, how long before an Omar Bradley we don’t know about yet surrounds the white house and congress with a bunch of carbon belching M1s and ends our democratic experiment in totally different and nonenvironmental fashion
I did read the rest, including the comments. I’m taking advantage of your invitation to paste an excerpt in the Comments Section:
– Larry Weisenthal
This “comment” sounds like you are the author, Larry. Either that, or you and comment Bob | 11.6.08 @ 7:53AM are twins on your theory that a “cold, calculating” Obama will ultimately do the right thing. The only thing that makes me think it’s not you is this Bob guys says he’s been a party member of 40 years, and you’ve already ‘fessed up about your presidential voting record….
And with your picks for president not getting into office, your business has flourished and grown. Now that you have your pick of the litter, we shall see if that remains the case, yes? So it’s not just us in a wait and see mode. You have banked on Obama, putting up the ante of your business prosperity.
Time will only tell, and frankly we will all be overjoyed if Obama manages to grow the economy, provide a structure friendly for American business, and maintain the superiority of our military. But personally, I wouldn’t put a wooden nickel on that happening at this point… based, of course, on his “just words”. I shall await to be “pleasantly surprised” as you say, but poised to fight tooth and nail on the wrong direction.
…because I don’t see that his expansion of government will be sufficiently funded by his redistribution of wealth. …I don’t see that his protectionist trade policies will do anything for American business, but will certainly remove needed competitive prices from goods the citizens use daily.
Will 2008 Be the Last Free Election?
—
2008 was free?
Obama Black Panthers Intimidate Voters in Philly with clubs!
http://www.youtube.com/watch?v=kOtGllNk2Gk
Joe said: 2008 was free?
Nope… cost Obama over $425 million. Wait, let me correct that. It cost Obama nothing. He spent other people’s cash to the tune of $425+ mil….
Evidently all those “just words” about campaign finance reform are… well… “just words”. And now, the threshold of how much cash it will take to get elected to federal office has been upped considerably. Another proud moment in US politics…. not.
From Mata:
No, the comment wasn’t me; I “broke” with my family to become a Democrat and support Kennedy when I was 12 years old in 1960. I wrote a weekly left of center political column for my college newpaper, the University of Louisville “Cardinal.” I’d never pass myself off as a disaffected Republican.
I’ve tried several times (without success — whether censorship or spam filter, I can’t say) to post my own analysis on how I think Obama will govern. In short, he’s a calculating politician, motivated entirely by his own aspirations of personal success. I truly think he aspires to achieve historical recognition as the greatest President in history. Everything he’s done in his career to date has been done in furtherance of his career — beginning with moving to South Chicago after graduating from Columbia, the community organizing, the Harvard Law and Presidency of the Harvard law review, return to community organizing, running unsuccessfully for Congress then successfully for the state Senate. He chose his church to further his political career. Heck, it wouldn’t surprise me if he chose his wife to further his political career (to get him “accepted” into the South Chicago African American community).
He’s tossed both political positions and friends/family/individuals under the figurative bus in the furtherance of his aspirations.
But here’s the deal. He’s not a Euro-socialist ideolog. He’s not committed to some “cause;” he’s committed to himself. The only way he’ll get to be the greatest President in history is by doing the right thing by America. He understands that. He’s got a golden opportunity, and he’s not going to blow it. He’ll defend America, because that’s what he needs to do. He’ll consolidate power by squatting down to dominate the middle of the center, because this is what he needs to do. He’ll do what’s smart in the case of NAFTA (which I doubt will go beyond some window dressing stuff, the same way that Bush placated the social conservatives with speeches about Terry Schiavo and other assorted window dressings– Obama’s SCOTUS appointments will be the liberal equivalents of Roberts and Alito — qualified beyond question; legal scholars and not the likes of Hillary Clinton).
Even Pelosi realizes that she’s not going to get her way. Even Pelosi is talking about “governing from the center.”
Obama’s game is to steal the center from the GOP and force the GOP into a hard right corner. He wants to marginalize the GOP as the party of the Social Shrill.
Anyone really want to bet against him, given where the GOP is right now and what is being said right now, on this and similar blogs?
– Larry Weisenthal/Huntington Beach
“- Larry Weisenthal/Huntington Beach”
LOL… Huntington Beach or Huntington Post? Boy, you have no judgment. You seem to know nothing about politics. I really feel sorry for people like you. But I won’t be sorry for you personally when your country goes down the drain. You voted for that stupid idiot bum, good for you. The day you will lose your business, because you will, I will laugh at you.
P.S.: But you know what? I don’t even believe you have a business. To have a business you would have to be smart and obviously, you are not.
I’ve seen your commentary you tried to post via our internal FA conversations just recently, Larry. First I want to say that you have posted the gist of your post you want published, tho different wording, three times successfully in the comments.
You and I have had some conversations on your theory about Obama already. So I’m confused that you believe you are being censored, or considered “spam”. Your comments have gone thru successfully multiple times on different threads, as I have linked above.
I did mention before that this is a conservative blog, started by Curt. All of us that are authors may vary in our party affiliations (tho Skye has just officially abandoned the DNC post election), but we do start our posts and thread commentaries from a conservative opinion.
This isn’t Hannity & Colmes, ya know… :0). Nor is our blog world subject to any kind of a fairness doctrine (yet…). Somehow I doubt DailyKOs would publish any of my submitted posts as a guest author. And you know? I have no problem with that.
Certainly your cogent and well presented alternative positions have been welcomed as a view from the other side, and not overly laden with campaign talking points. I enjoy my cyber conversations with you, tho we may not agree on the past. As for Obama’s future? Stay tuned…. It is pure speculation on both our parts.
Ultimately, the decision to allow posts that are not necessarily conservative in nature as a “reader post” lies with Curt. Personally, as one of the contributing authors, I’m not interested in seeing this a mixture of conservative/liberal posts, as I believe it dilutes what constitutes the heart of Flopping Aces. However I am always interested in seeing the twists and turns that threads take when those like yourself enter the fray after an authored post subject appears.
I believe you have made your point about what you believe Obama’s performance as POTUS will be. And indeed, since I too believe the man is ego-driven, and concerned with self and legacy, that he will renege on many of his campaign promises… either for outright refusal of the nation to willingly go down the path of Euro-socialism, or for financial constraints. In fact, in some ways, Scott says the same when he discusses Obama on foreign affairs.
But I certainly hope that because you are not necessarily granted a top slot for your comments as an authored post, that you believe you are being censored or spammed… especially when your presence in the comments dictates otherwise.
Craig:
Well, since you bring it up, I’ll talk a little about my business.
I’m a lot more Joe the Plumber than Joe the Plumber is ever likely to be. Since 1992, I’ve run a small, private laboratory, employing an average of 8-10 people over the years. I’ve never cleared more than $290,000 (adjusted gross income), but three years in the last 10, I was over $250,000 and had to pay alternative minimum tax. I’ll see my marginal rate go up 3 percentage points the next time I hit that level. But it certainly won’t be a disincentive to me.
What’s hurt is seeing my retirement account lose 45% in value over the past 18 months. Seeing the value of my investment property (one commercial; two residential) plummet. My house, I don’t sweat. It’s shelter and not an investment.
I don’t think it was a good idea to double the national debt in the past 7 years, to provide a one trillion dollar tax cut to people who didn’t need it. 9% of the national budget goes to paying interest on our debt. The trillion dollar tax cut was paid for by borrowing a half trillion from China and the rest from other creditors. The debt will eventually have to be paid back by my children. So it wasn’t a tax cut; it was a tax deferment.
Because taxes were cut so drastically at a time when we had increasing budgetary obligations (Iraq War, etc.), it was necessary for Alan Greenspan to lower interest rates to 1% and keep them there, in order to try to grow the economy enough to keep the deficit in a reasonable range. This contributed to the capital glut which had nowhere to go, so it went to mortgage-backed securities and credit default swaps.
So now we are going to raise taxes back to Clinton-era levels (when I also had some good years), to put government more on a pay as you go basis.
The years I made the most money, I also paid the most taxes.
Making enough money to pay more taxes is one of life’s more high class problems.
– Larry Weisenthal/Huntington Beach
Larry Weisenthal:
Sheesh! Did you just fall outta the turnip truck? Lets drop this bull about Obama and Pelosi ‘governing from the center’. If they have a centrist bone in their body, then I’m so far right that I’m falling off the table.
Quite frankly at this point I have little tolerance for anyone who voted for B. Hussein Obama, and your comments are decidedly outside that tolerance.
Check back in 4 years from now and tell me your story then.
Larry Weisenthal:
In your comments to Craig: who the hell do you think set the ‘alternative minimum tax’? If your retirement account has lost 45% in value Over The Last 18 Months, then you made some bad investment. The Dow has been consistently around 13,000 until the flame out Created By Democrats, by the way.
I recall reading a post somewhere on the most simplistic explanation of paying taxes as possible and I think you could capische this. I will see if can find it. By the way, how do you determine who needs a tax cut and who doesn’t.
If “The trillion dollar tax cut was paid for by borrowing a half trillion from China and the rest from other creditors”, then why was it necessary for Greenspan to lower interest rates to 1% (who the hell gets money at 1%?) if the tax deficit at the time was already neutralized by the borrowing you indicate?
“This contributed to the capital glut which had nowhere to go, so it went to mortgage-backed securities and credit default swaps.” Capital didn’t have anywhere to go?? Lord Have Mercy!
So you think raising taxes “back to Clinton era levels”, when you had your ‘good’ years will solve the problem of the present flame out of the mortgage/bank practices? Government has NEVER been on a ‘pay as you go’ basis, the more that goes to Washington, the more that is spent.
“The years I made the most money, I also paid the most taxes.” Duh? Simple arithmetic.
You guys can’t see the forest for the trees.
Mike’s America:
I have been telling anyone for months who would listen to me that Obama is the antichrist incarnate as portrayed in Revelation 13. He is certainly exhibiting all the primary characteristics. ie, God Complex, etc.
Steve, you misunderstand. I never had a problem with the alternative minimum tax. As I said, making enough money to pay more taxes is a high class problem. You grin and bear it, all the way to the bank. The marginal tax rate was 90% during the Eisenhower years; the ratio of debt to GNP fell sharply; people were motivated to work. Here we are talking about raising the marginal rate from 36% to 39% and Joe the Plumber says that this will take away his incentive to work hard. This attitude is precisely why he’ll never make enough from his plumbing job to ever have to worry about it.
The cause of the financial meltdown was too much capital chasing too few investment opportunities. The capital glut was exacerbated by the low interest rates which were kept too low too long in an attempt to grow the economy enough to trigger a fanciful Laffer Curve effect. Didn’t work, but did create the demand for exotic securities and swaps.
There is always a business cycle. I don’t usually give Presidents either credit or blame for economic ups and downs. But this particular perfect storm was a product of the capital markets having a glut of capital, which didn’t go into business expansion or IPOs, which would have grown the economy, but instead went into Ponzi investment schemes.
Relevant data: Only 1/4 – 1/3 of sub prime paper went through Fannie/Freddie. 2/3 to 3/4 were entirely outside the quasi federal system. Fannie/Freddie management made the same bad decisions, driven by the same motivation (profit seeking) as did entirely private sector banking management. Of all the sub prime loans, only 9% were for owner-occupied first mortgages and certainly less than 1% of all of these loans (in terms of capital) went for Community Redevelopment type loans.
Contrary to urban legend, the financial meltdown wasn’t because of any government programs to expand housing opportunities to poor people, which is precisely why McCain and all the Senators who lost their seats didn’t try to make it a campaign issue. Rather, it was entirely a product of the capital glut.
– Larry Weisenthal/Huntington Beach
Well i don’t think the liberal illuminati have enough power to pull a plan like that. The election process will continue and if Obama does a good job it is going to be extremely HARD! for the republican to take back power. But if he flops like he probably will (is there really any getting out of this mess?) the right will have another great shot to get back in 4 years.
The leftist MSM is still going after Sarah.
Ah Larry… Seems you took a perfecfly good opportunity to get in touch with an alternate point of view by exploring the opionions presented in the American Spectator article by Quin Hillyer and jumped straight to the planted counterpoint offered by one of your fellow Obamatons.
The second linked article should be a clue to you, if you really ARE unaware of what is going on, of the concerted effort being made by your fellow Obamatons to wreck havoc on conservative sites.
And yes, I agree with Mata, you could very well have written the comment yourself. The language is remarkably similar.
Since you failed to take advantage of this opportunity for learning and personal growth allow me to continue with the excercise and add a few more excerpts. Perhaps you may wish to read them before leaping to hit the comment button.
From: http://spectator.org/archives/2008/11/06/saul-alinsky-takes-the-white-h
I don’t think one should get that paranoid over Obama’s and the Democrat’s abilities. Sure they can change some laws, but I doubt they can force their power to keep the Republicans at bay. Carter came in on hope and change back in 1976. He got in from the perfect storm. Then he ran into problems immediately. His own staff also got into the mix. Remember that alternative energy corruption known as Three Mile Island? Three Miles Island didn’t fall apart on its own, the people inside did.
If the Republican’s bread and butter policies are to be believed, the liberals will eventually blow it and want the conservatives back. They’ll want somebody to bomb Iran, allow them to drive gas powered cars and trade around the world (Democrats are protectionists). A few trade wars later and Obama will not be seen as the cool one, but the one keeping the eventual recession going (maybe we will see some stagflation).
The next Republicans should run on a hand up rather than hand out program and develop a cheaper alternative than the Democrats. I already gave my plan here on how to create jobs, fix the infrastructure, provide health care to the uninsured and balance the budget with the money the federal government already gets. It’s that type of plan where something more can be gained by not spending more.
Greg: The difference between Carter and Obama is the degree to which Obama and friends have shown an inclination to pursue anti-democratic tactics that will severly hamper our ability to make that comeback.
The chilling intrusion by state agencies whose heads were Obama supporters digging dirt on Joe the Plumber is just the tip of the iceberg.
Mike, I am personally opposed to using the fairness doctrine to try and stifle talk radio. I’ll be disappointed if the Dems try and do this. I think that Obama is much too smart to go along with this. No one listens to Rush and Sean, et al, beyond those people who’d never consider voting for Obama in a hundred years. This would be a classic “over reach,” of the type he’s determined to avoid.
I don’t understand how “complaining” about vote fraud equates with a prosecutable offense (voter suppression). Vote fraud should be prevented and punished; so should voter suppression.
Peacefully protesting anything is a first amendment right. Denying First Amendment rights is a crime. I was against McCain-Feingold. I’m very much pro-2nd Amendment. I don’t know what Obama’s personal inclinations are, but he knows the 2nd Amendment is a true third rail in American politics. He won’t go there.
Obama doesn’t have a big social agenda. He’ll try and enact an energy/infrastructure program. He’ll try to get health care reform. He’ll have to do something about Social Security and Medicare. He’ll try and get the Debt/GNP ratio headed downward again. Hopefully, he’ll keep a nuclear bomb from going off in Long Beach Harbor and keep anthrax spores out of the New York subway system (these being the true terrorist security threats, as opposed to anything at all ever going on in Iraq).
If he does those things, he’ll be re-elected in a landslide. If he doesn’t, then silencing Rush Limbaugh won’t help him.
– Larry Weisenthal/Huntington Beach
Applying the “fairness doctrine” to stifle talk radio would be a classic over reach. Obama won’t go there. Anyway, he has nothing to fear from Rush and Sean. Their listeners would never vote for Obama in a hundred years.
The Wurzelbacher leaks had nothing to do with the Obama campaign. it’s the same sort of crud as the pre-election leak about Obama’s half-aunt:
http://www.politico.com/news/stories/1108/15161.html
Just the same as any kind of leak. Individuals taking advantage of their ability to access privileged information and leaking it to the press for their own purposes.
Larry Weisenthal/Huntington Beach CA
“- Larry Weisenthal/Huntington Post”,
You are inspired by internet’s sites who are anti-capitalism. No wonder you voted for THE MESSIAH! You are hopeless.
“I predict future happiness for Americans if they can prevent the government from wasting the labors of the people under the pretense of taking care of them.”
“If you will not fight for the right when you can easily win without bloodshed; if you will not fight when your victory will be sure and not too costly; you may come to the moment when you will have to fight with all the odds against you and only a small chance of survival. There may even be a worse case: you may have to fight when there is no hope of victory, because it is better to perish than to live as slaves.”
“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants.”
-Thomas Jefferson
Larry, there’s a few things I’d like to address, from different posts. So I’ll just repeat the pertinent phrases.
And that trillion nat’l debt is set to balloon up to $4.3 trillion under a President Obama, and with only being able to calculate in about 44% of his proposed programs. The Obama campaign team did not provide their calculations and specifics to the Tax Policy Center to add in the rest.
Granted, the same has McCain in that range of nat’l debt by the same era. And that… to my very basic “smaller government” philosophy was appalling. But at least between the two big spenders, McCain’s is “spreading the wealth” differently than Obama’s. A “stimulus package” or less income of x amount yearly may sound just wonderful to many, but it just doesn’t create jobs or opportunities to grow the economy.
What it does create is the ability for Obama’s “middle and lower class” to buy a second TV, a new refrigerator, etc. Hardly a major huge boost in product sales or manufacturing, and even at that, a one time only moment. It is not a sustainable stimulus.
Obama’s grandiose plans are larger than the US wallets… including the top 3% that he wishes to burden with the bulk of it. There simply isn’t enough cash he can steal via taxes to pay for what he wants. The earning capacity is going down… and under projected Obama’nomics, will continue to go down. This is the opposite of what you call the “tax cuts to those that don’t need it”. And the first example of that is the low unemployment numbers under this current admin.
Second… why do all you guys talk about Iraq? It’s a 1/3 of the defense budget, and the $4.3 trillion Obama promises to add to the national debt is equivalent to 75 years in Iraq. You’re talking about a drop in the bucket for the proposed domestic spending. And as far as I’m concerned, the military defense is the top reason for the feds existance. Whether they spend 1/3 of that on the wars, or elsewhere is irrelevant. It’s already allocated to military use, not domestic welfare programs… as it should be.
Which brings me to the second point
and from another comment…
We’re going thru some half truths here, Larry. You cannot disassociate capital from the bundled investments.. which is not a bad thing as long as you are bundling solid investments. What you had was too much money being lended on too few actual value securitized assets. And this entire economic situation is the result of an out of control housing/lender bubble that should have burst sooner than later.
And “perfect storm” is a perfect term. You say CRA had nothing to do with it. In the free market, it has everything to do with it. You cannot legally discriminate, mandating loans that will “qualify” the unqualifiable only to a certain sector of the public. Why should a guy who can’t show adequate income to debt ratios and good credit be allowed easier money than a good risk? The entire concept is insane.
Frankly, the loans created because of the redlining battles… i.e. low/no doc, ARMs, bridge loans, 80/15/5s, etal… were created in order to get the unqualifiable borrower *thru the automated underwriting systems* of Fannie/Freddie (LCI and DU, for example… all the loan officers use them). Tehse creative loans were great financial tools for many, and in high demand. And the majority who used these tools are not the problem
The easy money to risky borrowers increased demand v supply, and started driving the real estate values up from 1995-2001 at a rate unseen for two decades before.
Then came 911. 911 took an already recovering economy from the late 90s slow down (yes… there was a market slowing) and tanked it. When Greenspan dropped the rates, it was to stimulate the hit back into action.
Now it’s the easy credit money, risky buyers, and long term low rates…. the real estate prices took the already dangerous escalation to new heights. And yes, Greenspan kept the rates low for too long… he now admits.
But every bit of this still starts with the creation of easy credit in order to meet Congressional mandates. The CRA banks would never be able to handle the high demand for these (including to those that were a good risk), so the free market came in and added to the fray. That still wasn’t the problem.
You say Fannie/Freddie didn’t have these loans go thru them. You are incorrect. Almost all conforming loans end up in the Fanne/Freddie portfolio on the secondary mortgage market. The automated underwriting programs I mentioned above? All based on Fannie/Freddie guidelines for resale. And Congress, at the same time, was encouraging the GSE’s to buy up an astromonical asset ratio.
In short, the problem was not bundling, and buying up by the GSEs or anyone else. It was the bundling of bad product. Somewhere, someone along the line is going to take the hit. Then add the heavy demand vs existing supply for the unsustainable value increases.
This was all foreseeable. But none wanted to foresee it since everyone was busy lining their pockets. And that includes most especially the DNC Congressional members.
There. I have filled in the rest of your half-story… You want to give the CRA sanctioned banks a pass, and blame it on the private banking and investment industry. That’s like saying the CRA banks are allowed to bake and sell arsenic cookies, but no one else can. That way we won’t flood the market with arsenic cookies.
At Daily Kos Hate Website Obama Told Far Left to Fool Public To Further Cause:
“Read the whole thing. Clearly, this man is no moderate.”
http://gatewaypundit.blogspot.com/2008/10/at-daily-kos-hate-website-obama-wrote.html
For anyone out there still deluded by the speeches Obama gave to woo the masses, please snap out of it. He’s not a moderate and has no interest in reaching his hand across the aisle.
Lightbringer, that middle quote is Winston Churchill,not Jefferson.
It is from his Nobel Prize winning history of the Second World War. Here is the expanded citation:
And now Larry… who said: “The Wurzelbacher leaks had nothing to do with the Obama campaign.” You’re right Larry. It was just a coincidence that state employees were ordered to do these illegal checks by the agency head who was an Obama supporter and max financial donor…
Geesh! Do you believe EVERYTHING those people tell you?
@Mike’s America:
If I remember correctly John Gotti never actually committed any murders, he had goons to do the dirty work for him so that his hands could remain clean.
I believe it’s called plausible deniability.
Wow. Obama’s REQUIRING volunteerism???
http://tinyurl.com/5m8clv
“When you choose to serve — whether it’s your nation, your community or simply your neighborhood — you are connected to that fundamental American ideal that we want life, liberty and the pursuit of happiness not just for ourselves, but for all Americans. That’s why it’s called the American dream.”
The Obama Administration will call on Americans to serve in order to meet the nation’s challenges. President-Elect Obama will expand national service programs like AmeriCorps and Peace Corps and will create a new Classroom Corps to help teachers in underserved schools, as well as a new Health Corps, Clean Energy Corps, and Veterans Corps. Obama will call on citizens of all ages to serve America, by developing a plan to require 50 hours of community service in middle school and high school and 100 hours of community service in college every year. Obama will encourage retiring Americans to serve by improving programs available for individuals over age 55, while at the same time promoting youth programs such as Youth Build and Head Start.”
Didn’t anyone tell Obama that Lincoln ended slavery?
I seem to recall that the US Constitution was amended to forbid precisely what is being proposed here.
And all those Volunteer organizations will be nothing more than indoctrination centers for the new left.
The American taxpayer will be asked to pay to brainwash another generation of fools.
Larry Weisenthal,
I did a bit of reality check on you on internet, and I apologize for not believing you for your business. I have a friend like you, who is also a researcher, but not on cancer, but on AIDS. He works at the General Jewish Hospital in Montreal and teaches at McGill University. A very brilliant guy, a genius in his field of work (Molecular Biology). But that genius was ZERO in politic and economy… lol
That often happens when someone has one or two PhD in a particular field. So since you are brilliant in your field, I will do the same thing as I did for him. I asked him to look at a video of Milton Friedman. This video was done in 2005… It is long (56 minutes) but it is an economy and politic course that you should not miss. My friend listen to it and now he knows almost as much in politic and economy as he does in molecular biology. His ideas changed for ever and he was very happy that I gave him that video.
You should enjoy it, After all, Friedman is a genius and he is the recipient of a Nobel Price on economy. I think that everybody should watch this video.
CHARLIE ROSE – ECONOMIST MILTON FRIEDMAN
http://video.google.com/videoplay?docid=-2963837673813979186
Thank you for correcting my sloppy attribution Mike’s America. Something Larry said put me out of sorts, and though I recognized the quote, it did not register in my mind that it was not from Jefferson. Normally I will create my own prose, but I did not trust myself to behave in a civilized fashion.
Larry,
History is full of leaders who rose to power fueled by this aspiration. Mostly we call them despots, tyrants, and megalomaniacs. The desire to secure one’s place in the history books does not translate into properly serving the best interests, preserving the liberties, or even realistically considering the safety of the people such a self serving leader is in charge of.
What we really need is for people to teach history to these kids so they have an idea what our country was founded on. They need to understand how precious freedom is so they can recognize socialism’s false promises of utopia for what they are.
Larry Weisenthal,
I want you to get back to me after you have watch the Video of Milton Friedman that I suggested to you in my comment #33.
Please watch it.
In several places I’ve encountered this idea that Obama will actually govern as a centrist. That he just used the left to get elected. I think it’s wishful thinking or an attempt justify voting for him. Obama had a communist mentor. He sought out marxist professors in college. He’s been a part of Chicago thug politics. He attended a church filled with hate speech for twenty years. You don’t pour sand into a cake batter and have it come out tasting like sugar. If Obama is that crafty, to use everyone he’s encountered as part of his plan to become president, then we can retire the name of Machiavelli and replace it with Obama.
Adam: The idea that the most liberal member of the U.S. Senate will suddenly throw all his beliefs overboard and govern as a centrist is so laughable that only a member of the Obama media could say it with a straight face. But never underestimate the Obama media’s ability to spin him as a centrist even though he’s parroting Stalin.
Lightbringer… No problem with the mis-cite. Larry can have that effect on people. Pretty scary that these people don’t see the problem with an aspiration for Obama to be the greatest president ever.
We are living in dangerous times.
Someone on the Hannity boards believes that that “required” service is only for high school/college students.
Let’s say I agree with that interpretation.
It is still not constitutional for the federal government to mandate service.
People can pretty it up however you want. IT’S NOT CONSTITUTIONAL.
You say CRA had nothing to do with it. In the free market, it has everything to do with it.
No, not really. First of all, the CRA didn’t apply to private mortgage lenders and they accounted for an enormous amount of the junk loans:
Private sector loans, not Fannie or Freddie, triggered crisis
By David Goldstein and Kevin G. Hall McClatchy Newspapers
Posted on Saturday, October 11, 2008
Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height vrom 2004 to 2006.
Federal Reserve Board data show that:
_ More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
I see, Steve J. We’ll take this slower for you.
The CRA banks were mandated to show x amount of loans to minorities as proof they were not redlining. In order to do that, lenders had to create exotic loans that would get them past criteria they could not pass.
Welcome no doc/low doc and other exotic loans.
Now how many CRA banks in the nation do you think there were?
And do you think it was okay for only those minimal CRA banks to offer those loans, and not the investment banking industry? Hint.. you say yes, you will be discriminatory and against fair trade laws.
CRA banks could not handle every demand in the nation for these loans. You can not also create loans only for minorities and not available to everyone.
The demand for these loans was high, so the free market takes over and offers competitive “redlining” loans.
Again, my final sentence brings this reality to you in a simple analogy.
The problem is not that all banks were offering a loan that the CRA banks were MANDATED to offer… the problem is that we were bundling arsenic cookies enmasse.
And if you wanted to limit the amount of arsenic cookies made to only the CRA regulated banks, you are being disciminatory and racist by law.
The CRA banks were mandated to show x amount of loans to minorities as proof they were not redlining. In order to do that, lenders had to create exotic loans that would get them past criteria they could not pass.
Welcome no doc/low doc and other exotic loans.
That’s not what happened. In fact, Fannie, as you noted, can’t accept non-conforming (Alt-A, no or low document loans). The CRA requires that the loans to poor people be financially sound, not crap.
BTW, typical of McClatchys to ignore that the subprime loan business started in mid 90s, and not in 2001.
Below is a graph of the housing prices over the past 33 years. Pay attention to the red line, as it is the inflation adjusted figure.
Note that after the CRA compliance reg changes in 1995, the prices starting rising? That’s because of the new influx of risky buyers… not only from CRA banks. However rates were still higher and the housing costs could somewhat be controlled… provided Greenspan used that power of the fed.
Now, note how after 2001 the prices really soared. That’s because of 911, and the rates dropping and staying low in order to boost the economy.
Welcome to reality….
NOTE: Read more details at my Perfect Storm post.
Barack reminds me of Woodrow Wilson in many ways. Crisis (whether in WW’s case war or in this case financial crisis) + massive expansion of Government along progressive lines + propaganda/intimidation.
Except Barack is too young and healthy to give up the ghost 7 years in.
He’s going to finish what Wilson started. That’s his fucking “legacy” of “what’s right” for America, Larry.
MATA –
Your graph does not support your argument that the regulation change in 1995 led to the increase in housing prices because the prices for the years 1996 and 1997 are flat.
Please tell me you’re not this simple, Steve J…..
Regulations effective beginning of 1995. Theoretically to affect the CRA banks
Lenders receive and must revamp loan packages with new guidelines for those.
The loans start being offered to the CRA banks
They get popular
The free market picks up on them.
And you wonder why they are “flat” for 12-24 months
until they catch onfrom compliance creation to hitting the market? Hang… it can take the mortgage market 6-9 months just to create the new loan package and full guidelines. This stuff and the appropriate paperwork doesn’t happen overnight.Steve J.,
Boy you are hopless and clueless.
REP. MICA: What was Lehman Brothers’ exposure to the debt of Fannie Mae and Freddie Mac? And what role did their collapse play in precipitating some of your financial troubles?
MR. FULD: Our —
REP. MICA: Did it matter?
MR. FULD: Our exposure to both Fannie Mae and Freddie Mac was de minimis, sir.
SOURCE:
Federal News Service
October 6, 2008 Monday
PANEL II OF HEARING OF THE HOUSE OVERSIGHT AND GOVERNMENT REFORM COMMITTEE;
SUBJECT: THE CAUSES AND EFFECTS OF THE LEHMAN BROTHERS BANKRUPTCY;
CHAIRED BY: REPRESENTATIVE HENRY WAXMAN (D-CA) WITNESS RICHARD FULD, JR., CHAIRMAN AND CHIEF EXECUTIVE OFFICER, LEHMAN BROTHERS HOLDINGS
SECTION: PRESS CONFERENCE OR SPEECH
LENGTH: 16936 words
Steve J #42
Fannie/Freddie buys bundles on the secondary market as well. Plus no doc/low doc loans were not classified as Alt A. They pass thru automated underwriting with new guidelines for those loan programs created. Why do you think they were created to begin with??
Not all subprime loans (which is Alt A) are low doc/no doc. But even the subprime could kick out a reject vs an accepted.
And not all subprime loans were in default. It was primarily the ARMS. The fixed had a good success ratio.
Finally not only the risky borrower used these loans.
The problem still remains not bundling, but the creation of “redlining” loans that became in high demand, and passed on thru the usual securitization channels.
Nothing wrong with securitization. Been going on since the 70s without a problem. But when you bundle “arsenic cookies”, the results are disasterous.
Steve J, how many subprime loans do you think Lehman Bros made… duh
So your point?
UPDATE: I’ll clarify… Lehman Bros was an investment banker. They bought bundled secured assets. Of course they have minimal contacts with Fannie/Freddie.
So what’s the problem? That a guy buys bushels of apples? Or that someone knowingly throws apples in the bushels to sell that are rotten because it became mandated to throw bad apples into the barrel?
UPDATE #2: I owe you an apology, Steve J. I did checking, and Lehman Bros did expand into the residential mortgage market in 2003 and 2004, by purchasing five morgage companies. These subsidiaries did originate loans, which were bundled and sold to Lehman investors via their investment banking services.
Obviously they didn’t believe they were packaging losing propositions and attempting to sink their own ship by buying their own risky paper inter corporation. But sink they did… as they did not get a bailout.
So on that point, mea culpa.
However their participating in lucrative, high demand loans created by redlining compliance regs is not the problem. The arsenic cookies and rotten apples in the bushel theory still applies. It’s just with Lehman, they had their subsidiaries create many of the loans they purchased, instead of buying them from outside mortgage companies.