Obama versus McCain (versus the rest)

[molson]

Originally Posted by Grammaticus

We got a lot of big government growth that stinks. Of course nobody is pushing to elect W in this election. But if you are saying that since W was bad, then Obama can be bad and it is fair. Well, that is a very pessimistic approach.

I think that's just the Democratic comeback forever...

non-Democrat: "X"

Democrat: "Well Bush was a bad president so there!!!"

[Grammaticus]

Originally Posted by Butter_of_69

Except that's not what they've been doing. We have years of capitalism operating with few bounds to prove that low taxes + high borrowing power + few regulations = HOLY FUCK.

I could go a step further and say that the Republicans general idea regarding the economy is to let the free market have its way. That is what has happened for most of the '90s and 2000's, and here we are in a huge hole that is collapsing in on itself.

That is why the Democratic message is playing so well right now. Not because tax cuts play well to the average citizen. But because the Democratic message of "beware unchecked capitalism" is being played out in the news media every day.

Unchecked capitalism & the free market having its way, are you serious? We have had nothing even close to that in a hundred years.

To simplify things:

At the end of the 90's, the tech stocks took a dive when Clinton sued Microsoft attacking successful business models. This caused uncertainty in the market and constriction occurred.

The current situation is from unnatural tampering with the housing market, were the federal government put tremendous preassure on lenders to underwrite mortgages for people who could not qualify in a free market.

[Tigercat]

Originally Posted by lordscarlet

How is it regressive? Please correct me if I'm wrong, but, as I said, isn't the amount you receive based on how much you put in? The logic that it is not "fair" if higher incomes are not paying in money beyond $103k, but are not receiving anything extra for their income beyond $103k, what is the harm? I have to look back at the original thread, but I'm not sure where the complaint was. People put in a certain amount of money, and in theory they receive money based on that contribution. Am I mistaken somewhere?

Again, I don't see the problem here. If you're not receiving anything from SS, I don't care if you're not putting into it.

Regressive in that the more you make over 100k the less you pay in percentage-wise into the SS system. I understand why it works that way, I just find it a bit unfair, perhaps unnecessarily so.

It's a safety net for all of us, one that we are almost always required to participate in. Someone may make a million a year for a decade, and be near pennyless before 65 and still enjoy the safety net of an income from social security. I find it a somewhat inconsistent ideology, because its a system that provides the same benefits for all putting money into it, but the burden of maintaining it is not even evenly distrusted.

The problem is, social security is this way without allowing people to opt out of it. If it is to remain mandatory, perhaps the burden of funding it shouldn't be so disproportionate?

Anyway, some Democrats, mostly pretty far left like Moore, are starting to call for everyone to pay an equal percentage, so it may be a real debate sometime soon.

[Tigercat]

Originally Posted by Buccaneer

Public employees have their own retirement account and do not pay into SS (at least in some/all? states).

All the school systems I have been around, maybe not all though.

[Shkspr]

Originally Posted by Grammaticus

At the end of the 90's, the tech stocks took a dive when Clinton sued Microsoft attacking successful business models. This caused uncertainty in the market and constriction occurred.

If you really believe that you need to go find a web archive of fuckedcompany.com or something. The tech stocks took a dive because investors realized that they were giving hundreds of millions of dollars in market capitalization to companies that an eleventh-grader could have programmed for a school project.

[sterlingice]

Originally Posted by Grammaticus

At the end of the 90's, the tech stocks took a dive when Clinton sued Microsoft attacking successful business models. This caused uncertainty in the market and constriction occurred.

Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha

Seriously?

Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha
Hahahahahahahahahahahahahahahahahahahahahahahahahahahahahaha

I think the above post is a good place to start.

I think the term "successful business models" probably isn't fair to apply to illegally leveraging a monopoly in one field to push a product in another. Not just once but at least 3 times in under 10 years.

SI

[Grammaticus]

Originally Posted by Shkspr

If you really believe that you need to go find a web archive of fuckedcompany.com or something. The tech stocks took a dive because investors realized that they were giving hundreds of millions of dollars in market capitalization to companies that an eleventh-grader could have programmed for a school project.

And I will suggest that you go study venture capital and free market. Good luck.

[ISiddiqui]

Holy crap... I mean I'm a believe in markets as well, but to think the dot com bubble collapsed because the government was initiating anti-trust against Microsoft... that's just a whole new level of wow.

[Grammaticus]

Originally Posted by ISiddiqui

Holy crap... I mean I'm a believe in markets as well, but to think the dot com bubble collapsed because the government was initiating anti-trust against Microsoft... that's just a whole new level of wow.

Every bear market has its trigger. I think the Microsoft suit triggered the NASDAQ drop in 2000.

[Shkspr]

Originally Posted by Grammaticus

And I will suggest that you go study venture capital and free market. Good luck.

Not really certain you're in a position to be suggesting any kind of academic advice to anyone after perusing your thought process. Care for some Flooz?

[Arles]

I agree that the Microsoft issue is a red herring, but I do have a question for the "unchecked capitalism" crew. What regulations would you have liked instituted in the early 2000 timeframe to prevent the mortgage issue?

Based on what people have said here (and in other spots), it seems the most common response is to have a restriction on the type of loans offered and a mandate of a certain % down payment (often 15-20%). The ironic aspect of all this is that if any republican would have proposed this in 2000, they would have been branded "looking only for the rich" as the number 1 home buying casualty in having "truer" loans with higher down payments would be the middle class and specifically minorities. So, this 20-20 hindsight is nice right now, but no one in the democratic party was in favor of adding mortgage regulations to make it more difficult for lower and middle income families to purchase homes. In fact, Dodd, Franks and half the congressional black caucus were fit to be tied when questionable loans to lower income families were given in the mid 2000s by Freddie Mac/Fannie Mae and republicans started asking questions.

So, people can blame capitalism for this if they like, but there was a "social engineering" plan at the base of this with support from Clinton, W Bush, republicans in the senate and much of the democratic party to get more people who couldn't afford to have homes in "purchased" homes. It's hard to put the blame solely on capitalism when that motive was the main reason many people on both sides overlooked some heavily questionable practices.

[Butter]

Originally Posted by Grammaticus

We got a lot of big government growth that stinks. Of course nobody is pushing to elect W in this election. But if you are saying that since W was bad, then Obama can be bad and it is fair. Well, that is a very pessimistic approach.

I made no such claim. All I am saying is that your claim that we are going to "get what we deserve" with Obama is doomsday garbage. As with every election, we are going to get what we vote for. Just as I have been disappointed that we have elected Bush for the last 2 cycles, now it's your turn to be disappointed IF Obama wins. But by no means am I going to say that Bush was what we deserved. He was far, far worse.

[Butter]

Originally Posted by Grammaticus

Unchecked capitalism & the free market having its way, are you serious? We have had nothing even close to that in a hundred years.

To simplify things:

At the end of the 90's, the tech stocks took a dive when Clinton sued Microsoft attacking successful business models. This caused uncertainty in the market and constriction occurred.

The current situation is from unnatural tampering with the housing market, were the federal government put tremendous preassure on lenders to underwrite mortgages for people who could not qualify in a free market.

So, this is all the government's fault, not the market's? Gotcha.

Thanks for "dumbing it down" for me.

[Mizzou B-ball fan]

Originally Posted by Butter_of_69

Just as I have been disappointed that we have elected Bush for the last 2 cycles, now it's your turn to be disappointed IF Obama wins. But by no means am I going to say that Bush was what we deserved. He was far, far worse.

To be fair, this somewhat plays into his argument. I'm not sure that Kerry or Gore would have been any better as a leader over the past two terms. Worse is a relative term.

[Neon_Chaos]

Originally Posted by Mizzou B-ball fan

To be fair, this somewhat plays into his argument. I'm not sure that Kerry or Gore would have been any better as a leader over the past two terms. Worse is a relative term.

Bush = leader fail

[Butter]

Originally Posted by Mizzou B-ball fan

To be fair, this somewhat plays into his argument. I'm not sure that Kerry or Gore would have been any better as a leader over the past two terms. Worse is a relative term.

I wasn't referencing Kerry or Gore. I make no claim as to their relative merits as a leader. I don't think Kerry would have been particularly good. I am saying that we deserve better than George W. Bush. We'll see if his successor lives up to the much-lowered standard for leadership.

[Mac Howard]

Originally Posted by Arles

I agree that the Microsoft issue is a red herring, but I do have a question for the "unchecked capitalism" crew. What regulations would you have liked instituted in the early 2000 timeframe to prevent the mortgage issue?

The obvious regulation is that the sub-prime lenders should hold in reserve a percentage of the loan. The banks have to do that but I'm not sure what the figure is - 5% or something like that. This means if mortgages are defaulted they have the reserves to withstand the loss. Also the fact that they may suffer that loss makes them wary of handing out mortgages that will fail. As it stands, with no reserve to lose and the ability to repackage the risk and sell it on, they were less than careful.

Based on what people have said here (and in other spots), it seems the most common response is to have a restriction on the type of loans offered and a mandate of a certain % down payment (often 15-20%).

I think one of the reasons for not demanding a deposit is that many tenants have paid in rent the equivalent of a mortgage repayment for years and could clearly repay the mortgage but have never been able to save the tens of thousands needed for a deposit. In these circumstances it was deemed that the deposit requirement could be put aside because these people have shown they can make the payments..

However what has happened is tha the sub-prime lenders have gone well beyond this and even sold mortgages on the basis that, even if you find you can't make the payments, you can always sell up in 6 months and take a profit. Fine, of course, until prices turned down.

It was never intended that loans be given to people who couldn't make the payments - what's the point in that? You're not doing them any favours there. But when you leave the decisions to the agents selling loans who are paid bonuses by the number and value of what they sell then sense goes out the window.

But these loans should have been monitored by lenders, Fanny Mae etc and weren't.

It's hard to put the blame solely on capitalism when that motive was the main reason many people on both sides overlooked some heavily questionable practices.

Except that the problem didn't stop with the loans themselves - they were then packaged and repackaged, derivatives produced which made the content of the packages opaque and created in such a way that they didn't appear on the balance sheets and so went unnoticed (this is the reason for the loss of trust between banks because no one knew how vulnerable any bank was).

All this occurred because of a environment in which traders, like the agents, worked on bonuses for deals and so risk was ignored. There was an orgy of buying and selling dubious derivatives boosting trader bonuses and apparent profits.

I saw an incredible figure reported in an article this weekend that it's estimated that there are between 500 and 700 trillion dollars worth (yes, FIVE to SEVEN HUNDRED TRILLION!) of these derivatives washing around world banks now. To put that into perspective - the GDP of the world is around 50 trillion. There are over ten times total world GDP in derivatives and some commentators believe the worst could be far from over.

This is what Greenspan meant when he said that his mistake had been to assume that banks would act to serve their shareholders when, in fact, they took part in extremely rash trading, ignoring risk. Then, when the core of these derivatives went sour - house prices - the whole edifice collapsed.

What this highlights is that when motivational bonus payments are such a significant part of the rewards package then financial dealing (both selling mortgages and financial trades) become irrational with concern for risk overwhelmed by greed for bonuses. It was this "capitalist mentality" that amplified the mortgage crisis into a world financial crisis.

It's interesting - communist economics fails (partially) because of lack of motivation for individuals and capitalism has now failed because of an excess. When I first read Marx I recall thinking "this guy doesn't understand the psychology of the working classes" (who are every bit as greedy, irrational and self-interested as the rich but just don't have the opportunity ). It seems that that lack of understanding isn't restricted to Marx

[Flasch186]

So the new GOP argument is that the 3 headed monster, Obama, Pelosi, Reid is dangerous. The strange thing is that that argument never came up from the side in control that I can remember. So over the last 30 years, when one party controlled the executive and legislative branch I'd like to know if that very same party said, "This really isn't good. We shouldnt hold all three 'heads' of this thing." Whether or not you agree with the premise of danger when all three hold court, it's somewhat disingenuous to now claim this when it wasn't the equivalent when it happened to you. It's kind of the same as the tax argument above....no matter what the corp in the crosshairs wont ever agree that, "now is a good time to raise taxes on us." It just wont happen because theyre all full of shit.

[Flasch186]

Originally Posted by Mizzou B-ball fan

To be fair, this somewhat plays into his argument. I'm not sure that Kerry or Gore would have been any better as a leader over the past two terms. Worse is a relative term.

and here you hit on the crux of my thoughts. I feel like I know what I'll get with a McCain/Palin Presidency and while it's been a long while since we had a Democrat in the White House from what I recall things we're better than they've been under the last 8 years. While I wouldnt venture to say Obama will be able to replicate the Clinton years at least I feel like I'll legitimately be getting something starkly different from the last 8, for better or worse and I'm willing to wager that there is more room above the line Bush set than below it.

[Mizzou B-ball fan]

Originally Posted by Neon_Chaos

Bush = leader fail

Sure, my point doesn't diverge from that. Just because one option wasn't all that good doesn't mean the other one was better.

[Neon_Chaos]

Originally Posted by Mizzou B-ball fan

Sure, my point doesn't diverge from that. Just because one option wasn't all that good doesn't mean the other one was better.

Alas, we'll never know for sure.

[Mizzou B-ball fan]

Originally Posted by Flasch186

and here you hit on the crux of my thoughts. I feel like I know what I'll get with a McCain/Palin Presidency and while it's been a long while since we had a Democrat in the White House from what I recall things we're better than they've been under the last 8 years. While I wouldnt venture to say Obama will be able to replicate the Clinton years at least I feel like I'll legitimately be getting something starkly different from the last 8, for better or worse and I'm willing to wager that there is more room above the line Bush set than below it.

Here's where I feel like your playing the role of psychic rather than anything based on reality. I'll likely vote for McCain and I can tell you with great certainty that I'm not certain at all what I'll get with a McCain presidency. You're buying into the Democratic party line that McCain is just 4 more years of Bush. If we use that line of thinking, which is mostly based on the 90% voting number floated around, should I then know exactly what I'm going to get with Obama? He voted with the party leaders 96% of the time, much more than McCain did.

My personal opinion is that I don't know what I'm going to get from either candidate and that I'm playing a hunch with my vote. Any talk that you 'know' what you'll get from either candidate is based on partisan talking points rather than any unbias fact-finding.

[Mizzou B-ball fan]

Originally Posted by Neon_Chaos

Alas, we'll never know for sure.

Agreed, but it does play into the nature of this election and just how much we really know about either candidate and how he/she will perform in office.

[Big Fo]

Originally Posted by Flasch186

So the new GOP argument is that the 3 headed monster, Obama, Pelosi, Reid is dangerous. The strange thing is that that argument never came up from the side in control that I can remember.

The experience argument didn't work (then was taken out back and shot once Palin was chosen)
Copying the "change" message didn't work
"Lipstick on a pig" hasn't worked
Focusing on pork barrel spending hasn't worked
Bringing up Bill Ayers hasn't worked
Slinging mud at ACORN hasn't worked
Bitching about media bias hasn't worked
Joe Six-Pack, Joe the Plumber, and Joe Liebermann haven't helped
Talking about flagpins hasn't worked
Calling Democrats Marxists hasn't worked

They'll keep trying different things until time runs out.

[sterlingice]

Originally Posted by Arles

So, people can blame capitalism for this if they like, but there was a "social engineering" plan at the base of this with support from Clinton, W Bush, republicans in the senate and much of the democratic party to get more people who couldn't afford to have homes in "purchased" homes. It's hard to put the blame solely on capitalism when that motive was the main reason many people on both sides overlooked some heavily questionable practices.

Mac summed it up really well in his post. Along with his suggestion that banks should be forced to hold some of the loan, there's a much bigger problem here. Sure, lost mortgage money would have hurt banks. But not like this. The bigger problem is that banks turned around and were allowed to leverage that money for a whole order of magnitude more of borrowing (10-15X!) and that's really why we're in the crapper.

No one is happy about throwing 700B at the problem. But if these were just bad mortgages, hell, 700B would be a decently large fraction of all bad morgages. Again, not that it's the right or best solution- but the government could have written a (big debt) check and problem solved. Instead, we have these bogus funds and money on paper floating around to the tune of tens of trillions of dollars and that's where things are going to take time to unravel.

So, in short, a regulation on limiting how much leveraged lending you could do, to the tune of 1-3x your assets rather than 15 or 30 (depending on the type of institution you are) would have saved us from whatever monstrosity this is going to become.

SI

[Flasch186]

Originally Posted by Mizzou B-ball fan

Here's where I feel like your playing the role of psychic rather than anything based on reality. I'll likely vote for McCain and I can tell you with great certainty that I'm not certain at all what I'll get with a McCain presidency. You're buying into the Democratic party line that McCain is just 4 more years of Bush. If we use that line of thinking, which is mostly based on the 90% voting number floated around, should I then know exactly what I'm going to get with Obama? He voted with the party leaders 96% of the time, much more than McCain did.

and you do the exact same thing on the opposite side of the fence. I do know that the GOP line has been going for 8 years now, McCain IMO has sold out to the group within the group, and Im unwilling to take a chance on the same group pulling strings. You may be. I wont be.

[Fidatelo]

I'm still chuckling about the Microsoft anti-trust lawsuit causing the dot-com crash. I love FOFC

[albionmoonlight]

1 week to go.

I can't help but wonder how the McCain campaign would be doing if it had manged to stick with a line of attack for more than 2-3 days at a time.

[Mizzou B-ball fan]

Originally Posted by Flasch186

and you do the exact same thing on the opposite side of the fence. I do know that the GOP line has been going for 8 years now, McCain IMO has sold out to the group within the group, and Im unwilling to take a chance on the same group pulling strings. You may be. I wont be.

In summary, you're willing to buy into a party line endorsed by many of the same Congress members who had a large hand in creating this mess. IMO, ignorance abounds in this situation and it's not limited just to Bush. He and his advisors obviously missed the bus and didn't realize the true nature of the finance beast. Without question, it's Bush's greatest gaffe of his presidency.

On the other side, many of the Democratic congress members ignorantly defended many of the policies that created this mess by taking the partisan stance concerning the need for everyone to own a home and anyone who stood up against it was racist or against the poor. Those same members are now claiming to have all the answers and may have a veto-proof majority. That's a very scary situation, though some in this thread have already dismissed it as a joke.

[Mac Howard]

Originally Posted by Flasch186

and here you hit on the crux of my thoughts. I feel like I know what I'll get with a McCain/Palin Presidency and while it's been a long while since we had a Democrat in the White House from what I recall things we're better than they've been under the last 8 years. While I wouldnt venture to say Obama will be able to replicate the Clinton years at least I feel like I'll legitimately be getting something starkly different from the last 8, for better or worse and I'm willing to wager that there is more room above the line Bush set than below it.

It can be difficult and I guess you have to listen to whosoever has an insight into the abilities of these guys.

I saw an interview this weekend, I think it was on Larry King Live, with a guy who was presented as Clinton's chief economics advisor during the Clinton years (you guys will probably know his name but I forget it now). He said that he'd been in a number of meetings with Obabma and had been very impressed with the way he took charge of the meetings, listened to anyone that could articulate their arguments regardless of whether they matched his view or not, analysed the information he was given and came to a sensible, on-balance, conclusion. He insisted that Obama impressed him every bit as much as Clinton in the way he grasped complex ideas and situations.

Of course he presumably is a Democrat but I didn't get the impression that he was pushing a party line (you can usually tell).

[albionmoonlight]

Originally Posted by Ronnie Dobbs2

How long until we get Rev. Wright v2.0?

I think that we won't. Since it has already happened, it will be harder to get the news to pick up on it, and harder to get people to pay attention. If the first time that anyone ever heard Wright say "God Damn America" was last week, then McCain has one of the best October suprises of all time.

But Clinton ruined that for him. Unless there is a video of Wright and Obama on stage both saying "God Damn America," then I think that it is a non-starter. Besides, if they had it, they would have released it near the start of early voting--not wait until 1 week to go.

By not using Wright, Senator McCain, win or lose, can say "I ran an honorable campaign."

[Butter]

Mac Howard, you win this week's "post of the thread" award. Congratulations!

[Flasch186]

Originally Posted by Mizzou B-ball fan

Without question, it's Bush's greatest gaffe of his presidency.

Oh, c;mon, lets not let him off that easy.

[albionmoonlight]

Originally Posted by Mizzou B-ball fan

and may have a veto-proof majority. That's a very scary situation, though some in this thread have already dismissed it as a joke.

I wouldn't worry so much about that. Obama--based on his fundraising ability and his voter lists--is more powerful than the Democrats in Congress. He is not beholden to them. This image of him as Reid and Pelosi's lapdog does not accord with reality.

Also, if the Dems reach veto-proof majorities, it will be because a lot of conservative Dems are winning in 5+ REP districts states. Unless these guys want to be one-termers, they are not going to go all leftist on us. They will make the Democrats in Congress more powerful, but also more moderate.

And, since I take it that you are a Republican fan, you can see it as a win/win. Either the Congressional Democrats are more moderate than you expect, which you will like. Or, they will do like the GOP Congressmen did for six years and act as a rubberstamp for the President and not challenge him in any way. That's how a party dies in front of our eyes. Not allowing any constructive dissent or debate from within.

The best thing for this country, in the event Obama wins the Presidency, is for the Presidency and the Congress to get back to their give/take relationship. And, considering who Obama is and what the Congress will look like, I think that there is a decent chance that will happen.

[Mizzou B-ball fan]

Originally Posted by Flasch186

Oh, c;mon, lets not let him off that easy.

Seriously? If there's a mistake that Bush has made in his presidency that outweighs the impact of a global economic crisis, I'd love to hear it. Bush and the congressional idiots have managed to affect the lives of 4-5 billion people simply through inaction. That's pretty impressive stuff for all the wrong reasons.

[JPhillips]

Originally Posted by Mizzou B-ball fan

In summary, you're willing to buy into a party line endorsed by many of the same Congress members who had a large hand in creating this mess. IMO, ignorance abounds in this situation and it's not limited just to Bush. He and his advisors obviously missed the bus and didn't realize the true nature of the finance beast. Without question, it's Bush's greatest gaffe of his presidency.

On the other side, many of the Democratic congress members ignorantly defended many of the policies that created this mess by taking the partisan stance concerning the need for everyone to own a home and anyone who stood up against it was racist or against the poor. Those same members are now claiming to have all the answers and may have a veto-proof majority. That's a very scary situation, though some in this thread have already dismissed it as a joke.

Poor, brown skinned people are not the reason we're in this mess.

[Mizzou B-ball fan]

Originally Posted by albionmoonlight

I wouldn't worry so much about that. Obama--based on his fundraising ability and his voter lists--is more powerful than the Democrats in Congress. He is not beholden to them. This image of him as Reid and Pelosi's lapdog does not accord with reality.

Also, if the Dems reach veto-proof majorities, it will be because a lot of conservative Dems are winning in 5+ REP districts states. Unless these guys want to be one-termers, they are not going to go all leftist on us. They will make the Democrats in Congress more powerful, but also more moderate.

And, since I take it that you are a Republican fan, you can see it as a win/win. Either the Congressional Democrats are more moderate than you expect, which you will like. Or, they will do like the GOP Congressmen did for six years and act as a rubberstamp for the President and not challenge him in any way. That's how a party dies in front of our eyes. Not allowing any constructive dissent or debate from within.

The best thing for this country, in the event Obama wins the Presidency, is for the Presidency and the Congress to get back to their give/take relationship. And, considering who Obama is and what the Congress will look like, I think that there is a decent chance that will happen.

I agree with you for the most part. I think that there will be some moderate members in there. They have an approval rating in the single digits, so they're not exactly looked upon much more favorably than Bush, which is saying something. I also think that the economic situation is going to hog-tie this administration to the point where most of the campaign promises on either side will go unfulfilled due to the lack of government money available.

[Mizzou B-ball fan]

Originally Posted by JPhillips

Poor, brown skinned people are not the reason we're in this mess.

I agree. Not sure why that was even mentioned as I didn't say that anywhere in my post.

[Young Drachma]

Originally Posted by Arles

I agree that the Microsoft issue is a red herring, but I do have a question for the "unchecked capitalism" crew. What regulations would you have liked instituted in the early 2000 timeframe to prevent the mortgage issue?

Based on what people have said here (and in other spots), it seems the most common response is to have a restriction on the type of loans offered and a mandate of a certain % down payment (often 15-20%). The ironic aspect of all this is that if any republican would have proposed this in 2000, they would have been branded "looking only for the rich" as the number 1 home buying casualty in having "truer" loans with higher down payments would be the middle class and specifically minorities. So, this 20-20 hindsight is nice right now, but no one in the democratic party was in favor of adding mortgage regulations to make it more difficult for lower and middle income families to purchase homes. In fact, Dodd, Franks and half the congressional black caucus were fit to be tied when questionable loans to lower income families were given in the mid 2000s by Freddie Mac/Fannie Mae and republicans started asking questions.

So, people can blame capitalism for this if they like, but there was a "social engineering" plan at the base of this with support from Clinton, W Bush, republicans in the senate and much of the democratic party to get more people who couldn't afford to have homes in "purchased" homes. It's hard to put the blame solely on capitalism when that motive was the main reason many people on both sides overlooked some heavily questionable practices.

Oh goodness, not this shit again.

If the Community Reinvestment Act and POOR PEOPLE could destroy the prosperity of the American economy by themselves, they'd have wrecked it a long time ago.

This bullshit talking point just fails to recognize common sense, much less ignore the history behind what's happened the past 15-20 years. Look at all of the McMansions that are foreclosed in suburbs across America and tell me again that this problem was caused by Democrats.

Look, hate the Dems all you want and vote against them. I do and will continue to unless they start to make sense with my own political, economic and social values.

But lies like this is why more and more reasonable people are leaving the Republican tent. Call them RINOs if you want to, but even those who aren't have grown sick and tired of the antics of the conservative base, who seem hellbent on race baiting, ignorance and class warfare.

You can be fiscally conservative, against redistribution of wealth, public schools and other such things and be an American who believes everyone deserves an opportunity to thrive in this country.

But it seems many on the right are so hellbent on benefitting and passing wealth to their heirs and shutting out as many others, all the while wondering "why they can't pick themselves up by their bootstraps."

The duplicity doesn't astound me, but I'm fed up with the bullshit.

Carry on with the stupidity and washed up logic.

[JPhillips]

Originally Posted by Mizzou B-ball fan

I agree. Not sure why that was even mentioned as I didn't say that anywhere in my post.

What then does this mean?

Democratic congress members ignorantly defended many of the policies that created this mess by taking the partisan stance concerning the need for everyone to own a home and anyone who stood up against it was racist or against the poor.

[Big Fo]

Originally Posted by albionmoonlight

I think that we won't. Since it has already happened, it will be harder to get the news to pick up on it, and harder to get people to pay attention. If the first time that anyone ever heard Wright say "God Damn America" was last week, then McCain has one of the best October suprises of all time.

But Clinton ruined that for him. Unless there is a video of Wright and Obama on stage both saying "God Damn America," then I think that it is a non-starter. Besides, if they had it, they would have released it near the start of early voting--not wait until 1 week to go.

By not using Wright, Senator McCain, win or lose, can say "I ran an honorable campaign."

Win or lose, Wright or no Wright, he has not run an honorable campaign.

[Mizzou B-ball fan]

Originally Posted by Dark Cloud

This bullshit talking point just fails to recognize common sense, much less ignore the history behind what's happened the past 15-20 years. Look at all of the McMansions that are foreclosed in suburbs across America and tell me again that this problem was caused by Democrats.

I agree with this that the lower income folks were not the only ones abusing this policy. There's some very large houses in my area that were paid for with zero or five percent down. With that said, that door was opened by the Democrats. The fact that middle and upper class peole abused the policy was an unintended consequence, but the cause rests with the people who opened that door and refued to close it when it became obvious that something was amiss.

Originally Posted by Dark Cloud

But it seems many on the right are so hellbent on benefitting and passing wealth to their heirs and shutting out as many others, all the while wondering "why they can't pick themselves up by their bootstraps."

This is a capitalist society. People look out for their own best interests and that's generally what drives this country forward. You don't want to stop that kind of thinking. I think there's a place for government intervention in regards to your bootstraps statement, but I think the government has generally failed miserably despite a wealth of resources to help the people you are referring to in your statement.

[digamma]

Originally Posted by Arles

I agree that the Microsoft issue is a red herring, but I do have a question for the "unchecked capitalism" crew. What regulations would you have liked instituted in the early 2000 timeframe to prevent the mortgage issue?

Based on what people have said here (and in other spots), it seems the most common response is to have a restriction on the type of loans offered and a mandate of a certain % down payment (often 15-20%). The ironic aspect of all this is that if any republican would have proposed this in 2000, they would have been branded "looking only for the rich" as the number 1 home buying casualty in having "truer" loans with higher down payments would be the middle class and specifically minorities. So, this 20-20 hindsight is nice right now, but no one in the democratic party was in favor of adding mortgage regulations to make it more difficult for lower and middle income families to purchase homes. In fact, Dodd, Franks and half the congressional black caucus were fit to be tied when questionable loans to lower income families were given in the mid 2000s by Freddie Mac/Fannie Mae and republicans started asking questions.

So, people can blame capitalism for this if they like, but there was a "social engineering" plan at the base of this with support from Clinton, W Bush, republicans in the senate and much of the democratic party to get more people who couldn't afford to have homes in "purchased" homes. It's hard to put the blame solely on capitalism when that motive was the main reason many people on both sides overlooked some heavily questionable practices.

I think most bankers would tell you that the CRA has not been the cause of the subprime meltdown. A contributor? Sure, but probably not a material one. If you track the path of the crisis, you will see that the first loans to become distressed were not subprime loans. Those continued to perform relative to the market. The initial hits came from Alt-A borrowers--those with high FICO scores who were able to get loans with little or no documentation. Alt-A borrowers come in all stripes--investors and flippers, those with undocumented or unreliable income (perhaps bonus or commission heavy), etc., but they generally aren't subprime borrowers.

[JPhillips]

Originally Posted by Mizzou B-ball fan

I agree with this that the lower income folks were not the only ones abusing this policy. There's some very large houses in my area that were paid for with zero or five percent down. With that said, that door was opened by the Democrats. The fact that middle and upper class peole abused the policy was an unintended consequence, but the cause rests with the people who opened that door and refued to close it when it became obvious that something was amiss.



This is a capitalist society. People look out for their own best interests and that's generally what drives this country forward. You don't want to stop that kind of thinking. I think there's a place for government intervention in regards to your bootstraps statement, but I think the government has generally failed miserably despite a wealth of resources to help the people you are referring to in your statement.

As of the middle of 2007 the entire subprime market was valued at 1.3 trillion dollars. Subprime mortgages aren't the major problem.

[digamma]

Originally Posted by Mac Howard

Except that the problem didn't stop with the loans themselves - they were then packaged and repackaged, derivatives produced which made the content of the packages opaque and created in such a way that they didn't appear on the balance sheets and so went unnoticed (this is the reason for the loss of trust between banks because no one knew how vulnerable any bank was).

All this occurred because of a environment in which traders, like the agents, worked on bonuses for deals and so risk was ignored. There was an orgy of buying and selling dubious derivatives boosting trader bonuses and apparent profits.

I saw an incredible figure reported in an article this weekend that it's estimated that there are between 500 and 700 trillion dollars worth (yes, FIVE to SEVEN HUNDRED TRILLION!) of these derivatives washing around world banks now. To put that into perspective - the GDP of the world is around 50 trillion. There are over ten times total world GDP in derivatives and some commentators believe the worst could be far from over.

You make some very good points, but just to make sure we are on the same page, the issues surrounding credit derivatives are very different from mortgage backed securities. I believe the number you quote is all credit derivative exposure. The vast, vast majority of these will not be on subprime assets, but on credit indexes or individual corporate names.

The securitization and resecuritization of mortgages has certainly spread the housing problem over a much, much wider segment of the population (why would you ever think you would have exposure to subprime mortgages in your seemingly safe money market mutual fund?), but the mechanics are different from the swaps and derivatives issues out there.

[Mizzou B-ball fan]

Originally Posted by JPhillips

As of the middle of 2007 the entire subprime market was valued at 1.3 trillion dollars. Subprime mortgages aren't the major problem.

You're having a rough day. Nowhere in my statement did I say that sub-prime mortgages were a 'major' issue. I agree that they're only part of the problem.

[Daimyo]

Originally Posted by Grammaticus

At the end of the 90's, the tech stocks took a dive when Clinton sued Microsoft attacking successful business models. This caused uncertainty in the market and constriction occurred.

Wow. I haven't read the rest of the thread yet so I assume you've already been called on this, but I couldn't let it pass without commenting. There have been many gross generalizations and ridiculous claims in this thread, but I think this is the new high water mark!

Who knew? Clinton caused the dotcom crash!

[JPhillips]

Originally Posted by Mizzou B-ball fan

You're having a rough day. Nowhere in my statement did I say that sub-prime mortgages were a 'major' issue. I agree that they're only part of the problem.

So again, what do you mean by this:

On the other side, many of the Democratic congress members ignorantly defended many of the policies that created this mess by taking the partisan stance concerning the need for everyone to own a home and anyone who stood up against it was racist or against the poor.

[Mac Howard]

Originally Posted by digamma

You make some very good points, but just to make sure we are on the same page, the issues surrounding credit derivatives are very different from mortgage backed securities. I believe the number you quote is all credit derivative exposure. The vast, vast majority of these will not be on subprime assets, but on credit indexes or individual corporate names.

Yes, of course. I'm not suggesting there's 500 trillion of sub-prime mortgages out there. The article was saying that there's far worse than the sub-prime problem out there in the financial world. But, as far as I can see, these mortgage backed securities have become entangled in the derivatives environment and were probably the trigger for the financial crisis that has encompassed the whole world. In short that the US housing problem has been amplified into a world crisis by the (abuse of?) the capitalist system. The purpose of the derivatives is to spread the risk - well that's exactly what it's done, spread the risk around the whole world

I have seen it suggested that this whole thing may well have happened eventually even without the sub-prime problem.

The securitization and resecuritization of mortgages has certainly spread the housing problem over a much, much wider segment of the population (why would you ever think you would have exposure to subprime mortgages in your seemingly safe money market mutual fund?)

Hey, I live in Australia and I was talking to a guy this weekend who claims to have lost over $100,000 from his superannuation fund as a result of this crisis. If youi guys thought that you were disliked before I can assure you there's some pure hatred out there now

[Mizzou B-ball fan]

Originally Posted by JPhillips

What then does this mean?

From John Snow in 2003:

"There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises," Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.

Response to Snow where they passively try to point out the real reason they think people oppose Fannie/Freddy Mae:

"These two entities - Fannie Mae and Freddie Mac - are not facing any kind of financial crisis," said Representative Barney Frank of Massachusetts, the ranking
Democrat on the Financial Services Committee. "The more people exaggerate these
problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

"I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer
families and their ability to get affordable housing," Mr. Watt said.

But when the s%$# hit the fan, Barney Frank made it blatently obvious what he thought was happening:

The Associated Press: Frank says GOP housing attacks racially motivated

Frank says GOP housing attacks racially motivated
By GLEN JOHNSON – Oct 6, 2008

BOSTON (AP) — Rep. Barney Frank said Monday that Republican criticism of Democrats over the nation's housing crisis is a veiled attack on the poor that's racially motivated.

The Massachusetts Democrat, chairman of the House Financial Services Committee, said the GOP is appealing to its base by blaming the country's mortgage foreclosure problem on efforts to expand affordable housing through the Community Reinvestment Act.

He said that blame is misplaced, because those loans are issued by regulated institutions, while far more foreclosures were triggered by high-cost loans made by unregulated entities.

"They get to take things out on poor people," Frank said at a mortgage foreclosure symposium in Boston. "Let's be honest: The fact that some of the poor people are black doesn't hurt them either, from their standpoint. This is an effort, I believe, to appeal to a kind of anger in people."

Lou Dobbs did a pretty good job of calling Barney Frank on it in this interview:

Video - Breaking News Videos from CNN.com)