2008 Political debate thread

[Iced Dog]

It appears people forgot about "buyer beware" and jumped earnestly way over their heads to get something perhaps they really couldn't have afforded

That's definitely part of the problem...and getting overextended on credit cards as well...plenty of blame to go around

 

[ABQShredHead]

Long way to go, Drew, but at least it's going in the right direction, albeit for one day.

 

[Kenneth R.]

As long as Bush doesn't pass this stupid bailout. I'm not paying for a ton of other people's fuckups. Last I checked, this wasn't a socialist nation.

 

[J-Dubya 777]

I agree Ken, why should they be rewarded for bad business practices.....

 

[Iced Dog]

I will laugh quite heartily if the House rejects this next version of the bill...at that point they'd pretty much have to scrap it and take an entirely different angle.

 

[Swabs]

The young & naive usually have to muster spew like this to compensate...sad.

Ironically, Ascension is coming off as the most immature one in this debate.

 

[Ascension]

Swabs...is that the best retort you can offer up? Sad...yet again.


The Democrats want this bailout passed badly. Why? They're the ones that fucked up! They want to cover everything up. Democrats Barney Frank & Christopher Dodd had oversight on Fannie & Freddie and let them do whatever they wanted to. They met about the issues that were brought up years ago & Frank and other Dems said that there were no problems at that time. Which was total horseshit! But...when they're in your back pocket...anything goes.

This mess we are in is from 8 yrs. of failed policy by this administration......and from lack of oversight...

Are you kidding me? YOU are the oversight! What a stupid bitch!

The sad part is most Americans are so oblivious to the situation...they can lie and most don't even know!!!

Bush asked 27 documented times for action since 2003...warning of the possible consequences....ignored...2005 McCain warns of the consequences and ask for action... again...ignored!!!! Maybe if the powers to be were not recieving millions in campaign finance and VIP mortgage deals this could have been headed off. B. Hussein Obama has 2 of the worst FM & FM offenders (one of them skimmed off 20 million) working on his campaign. Of course non of this has been covered by the liberal arts networks....and those guilty are pointing fingers.

 

[Yngvai X]

Maybe the issue isn't deregulation, maybe if the government didn't pass shit like the Community Renewal Act that essentially penalized banks for NOT lending out subprime mortgages we wouldn't be in this mess. Regulations put companies in "damned if you do, damned if you don't" situations.

try reading this article. More and more of this type are popping up, and people need to be made aware that both the Dems and Republicans are full of shit.

http://www.realclearpolitics.com/articles/2008/09/bailout_politics.html

Or for those of you too lazy to read the whole thing, heres the main points summarized at the end of the article:

f Fannie Mae and Freddie Mac were free market institutions they could not have gotten away with their risky financial practices because no one would have bought their securities without the implicit assumption that the politicians would bail them out.

It would be better if no such government-supported enterprises had been created in the first place and mortgages were in fact left to the free market. This bailout creates the expectation of future bailouts.

Phasing out Fannie Mae and Freddie Mac would make much more sense than letting politicians play politics with them again, with the risk and expense being again loaded onto the taxpayers.

We need LESS regulation, not MORE. Both sides are trying to put out a fire with oil instead of water... either way you slice it, say hello to nationalized banks.

 

[Ascension]

I hate regulation too but in the 2 FMs case the reins were loosened up...the greedy stepped in. Yeah the startup of these 2 organizations was not needed but once they were...then regulation was severely needed. Oversight is a good thing if the right people are put in place to do it. Somebody has to watch over the hen house. Those assigned to it looked the other way while they were getting their pockets lined & building their voter base (primarily the poor & minorities) . Below is an article about where it all began & the "loosening of the reins".

By TERRY JONES
INVESTOR'S BUSINESS DAILY | Posted Wednesday, September 24, 2008 4:30 PM PT

One of the most frequently asked questions about the subprime market meltdown and housing crisis is: How did the government get so deeply involved in the housing market?


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IBD Exclusive Series: What Caused The Loan Crisis?



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The answer is: President Clinton wanted it that way.

Fannie Mae and Freddie Mac, even into the early 1990s, weren't the juggernauts they'd later be.

While President Carter in 1977 signed the Community Reinvestment Act, which pushed Fannie and Freddie to aggressively lend to minority communities, it was Clinton who supercharged the process. After entering office in 1993, he extensively rewrote Fannie's and Freddie's rules.

In so doing, he turned the two quasi-private, mortgage-funding firms into a semi-nationalized monopoly that dispensed cash to markets, made loans to large Democratic voting blocs and handed favors, jobs and money to political allies. This potent mix led inevitably to corruption and the Fannie-Freddie collapse.

Despite warnings of trouble at Fannie and Freddie, in 1994 Clinton unveiled his National Homeownership Strategy, which broadened the CRA in ways Congress never intended.

Addressing the National Association of Realtors that year, Clinton bluntly told the group that "more Americans should own their own homes." He meant it.

Clinton saw homeownership as a way to open the door for blacks and other minorities to enter the middle class.

Though well-intended, the problem was that Congress was about to change hands, from the Democrats to the Republicans. Rather than submit legislation that the GOP-led Congress was almost sure to reject, Clinton ordered Robert Rubin's Treasury Department to rewrite the rules in 1995.

The rewrite, as City Journal noted back in 2000, "made getting a satisfactory CRA rating harder." Banks were given strict new numerical quotas and measures for the level of "diversity" in their loan portfolios. Getting a good CRA rating was key for a bank that wanted to expand or merge with another.

Loans started being made on the basis of race, and often little else.

"Bank examiners would use federal home-loan data, broken down by neighborhood, income group and race, to rate banks on performance," wrote Howard Husock, a scholar at the Manhattan Institute.

But those rules weren't enough.

Clinton got the Department of Housing and Urban Development to double-team the issue. That would later prove disastrous.

Clinton's HUD secretary, Andrew Cuomo, "made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis," the liberal Village Voice noted. Among those decisions were changes that let Fannie and Freddie get into subprime loan markets in a big way.

Other rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks.

Since they could borrow at lower rates than banks due to implicit government guarantees for their debt, the government-sponsored enterprises boomed.

With incentives in place, banks poured billions of dollars of loans into poor communities, often "no doc" and "no income" loans that required no money down and no verification of income.

By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market — a staggering exposure.

Worse still was the cronyism.

Fannie and Freddie became home to out-of-work politicians, mostly Clinton Democrats. An informal survey of their top officials shows a roughly 2-to-1 dominance of Democrats over Republicans.

Then there were the campaign donations. From 1989 to 2008, some 384 politicians got their tip jars filled by Fannie and Freddie.

Over that time, the two GSEs spent $200 million on lobbying and political activities. Their charitable foundations dropped millions more on think tanks and radical community groups.

Did it work? Well, if measured by the goal of putting more poor people into homes, the answer would have to be yes.

From 1995 to 2005, a Harvard study shows, minorities made up 49% of the 12.5 million new homeowners.

The problem is that many of those loans have now gone bad, and minority homeownership rates are shrinking fast.

Fannie and Freddie, with their massive loan portfolios stuffed with securitized mortgage-backed paper created from subprime loans, are a failed legacy of the Clinton era.

 

[Kenneth R.]

instead of quoting as if you hold the tablets on which the 10 commandments are written, present something of substance on your own. again you make the mistake of pointing the party finger. I don't recall ever saying I support any party, especially not the two largest. I am against this bailout plan because that's exactly what it is: a bail out. At what point during an economic challenge does this seem like a good idea?

 

[ABQShredHead]

It's tough to know what the future will hold, really. The bail out is seen as necessary from our financial minds in the country. I don't support it, because I share the opinion that we're paying for somebody's screwed business practices and for everything that has gone on for the last 10-12 years. But, without the bail out, there is a substantial risk involved. I think we're in a situation that can be ultimately dire here, and if the market is unable to hold itself up there is way too much at stake. The fall out from the failures can be ridiculously wide in scope.

I do agree with what Ascension has said - it's not all on the shoulders of the Administration. I think Congress points too many fingers at the Executive, taking advantage of Bush's low approval rating and shoveling more crap on the stack. Does that really do anything for our futures? I don't think so. I think we should get off the Bush Hate bandwagon and turn more attention to Pelosi and a miserably failing Congress. She is the one in the country right now who scares the hell out of me.

And to that end, Matt makes good points too. Less regulation is right, but the oversight from Congress has failed - perhaps we can add regulation to the oversight.

 

[Kenneth R.]

I agree that the finger pointing is useless. I still think that we need to stop covering up our problems and face them, risk or not.

 

[ABQShredHead]

I think we will, Ken, but at the same time there is much at stake if the economy collapses. Tough call.

 

[Kenneth R.]

It really is. Even playing it "safe" with the bailout, there is high risk. I think the healthiest thing for the economy is to get it off the medication and let it fend for itself - build that immune system, so to speak, by itself. We need to stop "saving" the economy every time shit hits the fan, and learn from other countries where economic hardship runs its course - some companies fold, some prosper in the newfound space. Doing any less would be like the issue with the original plan for conserving natural parks. All forms of conservation should include evolution. I know I've mentioned this before - but the national park system originally tried to keep status quo, and they tried really hard unsuccessfully. They watched as the wildlife deteriorated because their regulating it so closely resulted in stunting the growth and tipping the food chain. Just as with the national parks, and with so-called global warming, I feel the same applies to the economy: tend to it for sure, but let it grow on its own. Every parent knows there are some lessons to be learned from not intervening at certain times. What happened to the tough love? Our system is too cushioned, and we have lost our calloused skin.

 

[J-Dubya 777]

I agree with the last 2 posts 100%....It really is a tough call, damned if we do, damned if we don't. I'd really like to NOT see these people/companies "rescued" when they fucked up BIG time. Then again, I have a house & car I need to pay for, and don't need anything threatening an already diminished job market. So we have this, a Cubs playoff game, and a VP debate to deal with.....great.....:Smug:

 

[Kenneth R.]

I'll be watching 49ers vs Patriots...

 

[Iced Dog]

I feel the same applies to the economy: tend to it for sure, but let it grow on its own. Every parent knows there are some lessons to be learned from not intervening at certain times. What happened to the tough love? Our system is too cushioned, and we have lost our calloused skin.

I agree...and there are plenty of respectable economists who seem to agree as well. If we continue down this road of bailouts, where will it stop? We're all probably gonna eat a shit sandwich with either direction...if that's the case, I say suck it up now to make the system better for tomorrow. But that's easy for me to say, I'm not close to retirement.

 

[razoredge]

How come with all these current credit problems, I come home to no less than 3 messages on my answering machine by credit companies as well as credit card companies campaigning for my "business"? While I feel people were fools for falling for the life of credit, I know damn well it has been shoved down peoples throats as the statis quo for how we live life today. "Get what you want now and make the payments and live a happy life". I'm not religious but there is that thing in the bible that said "thou shall no lead into temptation" and that has always rang in the back of my mind, to keep me from falling into most temptations and seeing the used cars salesman types for what they are, problem is today we have a world full of these dirt bags.

I know nothing about fanny and freddy and could give a shit, Im sure there are many involved with the companys that cashed in big time during whatever their fiasco was, these people should have their money and other assets confiscated and then be publically executed, no skin off my back.

I have one loan that is through GMAC and it was 0% interest, no fool am I. I have had a few small short term bank loans during my years with my own business and a used truck or two. I did a owner held morgage for the house with my landlord and paid that off within 5 years, over a decade ago. I did the deed search and we handled the mortgage papers ourselves with only a notary, so not even a lawyer got to have their scummy fingers on my dealings. The likes of my kind is the source of hatred for the system because we dont support these other less contributing trades and I TOTALLY love it. HOWEVER I was had in the end as they exported my industry to south america and forced me to become reliable on employers, low income and into playing the economic game that supports the rich. I have resisted to the best of my abilities but that has forced me to not complete my dreams of the home I wanted to build in place of this one and many other things I never got done. I have been stupid poor for 8 years and try to learn to deal with it but the resentment will not die until I do. So while I certainly dont wish bad on other worthy people... it will only reduce many to the level I was/am and I fail to see how that may not be just for the apathetic complaciency of the typical "American".

So shoot me or shoot the selfish rich, it shouldnt take a college degree to figure out which would have the most positive effect.

 

[Kenneth R.]

[douchebag hat]I'd like to see Fannie Mae, Freddy Mac, and all other such corporate conglomerates that fucked up on greed, sink to the bottom of the economic ocean of bankruptcy. [/douchebag hat]

 

[Iced Dog]

So shoot me or shoot the selfish rich, it shouldnt take a college degree to figure out which would have the most positive effect.

Well I have two college (bachelors) degrees (yes, I'm a glutton for punishment)...and I'm willing to do my part, so which selfish rich asshole do want me to target?