Fannie Mae and Freddie Mac Bailout Debacle
The widespread rumors of a government bailout of Fannie Mae and Freddie Mac have already had dramatic consequences, perhaps creating a self-fulfilling prophecy. Iain Dey and Dominic Rushe, writing for The Times of London, note that, “The two companies lost almost half their market value last week as rumours of a government bail-out swept the stock markets, hammering share prices around the world.”
Julie Creswell of the NYT notes that many have seen this coming for years.
Among them is Jim Leach, a Republican former representative from Iowa, who began arguing two decades ago in Congress that the government-chartered mortgage companies, Fannie Mae and Freddie Mac, were unfairly insulated from the real world. They were not subject to the same financial standards and tax burdens as their competitors, he warned, and if they ran into trouble, an implicit government guarantee to back them up meant taxpayers would be left with the losses.
The size of the problem is enormous.
Today they own or guarantee about half of the country’s $12 trillion in mortgage debt, so the free fall of their share prices last week amid concerns that they were undercapitalized has created chaos for Wall Street and Washington.
The dominant role Fannie and Freddie play today is no accident. The companies, Wall Street firms, mortgage bankers, real estate agents and Washington lawmakers have built up an unusual and mutually beneficial co-dependency, helped along by robust lobbying efforts and campaign contributions. In Washington, Fannie and Freddie’s sprawling lobbying machine hired family and friends of politicians in their efforts to quickly sideline any regulations that might slow their growth or invite greater oversight of their business practices. Indeed, their rapid expansion was, at least in part, the result of such artful lobbying over the years. And as Fannie and Freddie grew, so did the fortunes of Wall Street, which reaped rich fees from issuing debt for the two companies, as well as the mortgage and housing industries, which banked billions of dollars as the housing market boomed.
UCLA business law professor Steve Bainbridge has been warning about this for years, too. He points to some analysis from LAT Market Beat columnist Tom Petruno:
[I]t is triggering worries that would have been unthinkable even a year ago — including that the U.S. Treasury’s debt might lose its AAA credit grade because of heavy blows to the nation’s fiscal health from the housing mess.
[…]
Because of their size and importance to the mortgage market, it’s inconceivable that Fannie and Freddie would be allowed to fail. But an outright takeover of the companies by the government, as some experts have suggested, could frighten foreign investors — who are big lenders to the Treasury — by, in effect, adding the companies’ $5-trillion debt load to the Treasury’s massive debt of $9.5 trillion. Nationalizing the companies “would put the full faith and credit of the Treasury at risk,” [Allen] Sinai [of Decision Economics] said. “It would make foreign investors think hard about buying U.S. Treasury debt.”
Bainbridge sees a “worst case scenario” in which “Foreigners abandon the dollar for the euro, dumping treasuries. The collapse of foreign investment in Treasuries makes our massive current account deficit unsustainable. At which point, things really go to pot. “ Uh-oh, indeed.
What’s not clear to me, even in the case of a government absorption of Fannie and Freddie, is why we’d add an additional $5 trillion in “debt” by so doing. Sure, we’d be adding some unknown amount of risk. But, presumably, the overwhelming majority of people will be paying back their home loans. So, isn’t most of that $5 trillion, then, an asset?
But where did Fannie and Freddie get that $5 trillion? Presumably, most of that is borrowed.
I’m surprised that nobody has mentioned the compensation of FNMA and FHLMC managers. That’s been a scandal and an outrage for decades. If they’re government agencies their managers should be on the GS schedule with a top salary of around $175,000. The CEO of FNMA makes a hundred times that.
remember, also, that a couple of well known dems` were in the food chain when these companies were found to have changed the way the compensation was awarded. i believe they became millionairs while working there.
Davod, got any links? Or is it just innuendo?
Fannie and Freddie are allowed to borrow from the Treasury, that’s what makes them special. If the government takes them over, the amount owed from Fannie and Freddie to the Treasury flips from the government’s asset column to its debt column. Nobody knows the exact amount that Fannie and Freddie have borrowed from their $4.5b facility because both entities are so far behind and so vague in their public filings.
I don’t know how you get all the way up to $5t though.
The last three words cannot be underplayed here in light of the IndyMac business with Schumer, on Friday.
Bithead, you really are an idiot.
Yea, the Phil Gramm orchestrated deregulation of the banking (gutting of the Glass-Steagall Act) industry had absolutely nothing to do with this…
Possibly. But if so, you’ve yet to provide how this is shown in my response. I recognize I’m asking rather a lot of you, but how about going beyond your usual ‘insult and duck’ and say something of substance?
Regarding Schumer, it seems to me that this is a sticky ethical situation. On the one hand, if a legislator of any party truly believes that regulators are not doing their job, it is practically his duty to alert the public. But on the other hand, deliberate scare-mongering is also unethical.
The line between the two is very fuzzy, unfortunately.
Bit, I hate to break it to you, but the whole demise of Mae and Mac has been written for well over a year. If you were half – nay a tenth – as knowledgeable about such things as you think you are, you would have known that. But I’m guessing you don’t read much beyond Red State, watch much beyond Fox News and listen to a steady diet of Rush.
In any event, the idiocy of saying this is a self fulfilling prophecy in the middle of bank failures, the credit market crash, and the entire subprime mess is really quite rich even for you. Touche’! Another layer of the Dr. B onion revealed!
Hal, how can you say these things? Before the Democrats took over the hill in ’06, America was a paradise., with no problems of any kind. Deep in your heart, you know this to be true…
I hasten to point out, that he has evidence of it too… a rather pronounced lack of Schumer playing such games when Democrats were in the WH.
Two years, actually.
But after 8 years of complaints about how this was the worst economy since Hoover, (Despite official government reports which said nothing of the sort) it’s as Goebbels described it; Lies told often enough become perception, and perception becomes reality.
Anon;
No kidding. But it does seem he ends up being involved with rather more than his share of such, doesn’t it?
The stampede of withdrawals that went on for over a week and caused the bank to collapse, started within a few hours of Schumer’s statement. The fed is saying it’s that string of withdrawals that killed off the bank. How direct his guilt is is for others to decide, (Like a court) but he must bear at least part of the blame for this collapse. With the collapse of IndyMac, I’m more convinced that Schumer should be hauled up before a court for his misdeeds and see jailtime, however this falls out.
By the way, I note with interest that the fed… who has repeatedly demonstrated they’re not in Bush’s pocket… has already cited Schumer’s tampering as the proximate cause of IndyMac’s failure.
One would almost think that what Schumer is about is eroding public confidence in the economy. Now why do you suppose he’d want to do that? Why would Schumer, a Democrat from as far to the left end of the scale as one might imagine, want to erode public economic confidence during a Republican administration, and during an election year?
Gee, I wonder.
Aside from the rather nasty implications of that, one also must wonder if Schumer profits from this in terms of stock holdings in IndyMac’s competition. Or possibly, they weren’t donating enough to leftist causes, such as Schumer’s re-election.
Now, before you start getting too all fired worried and angry about what I’m saying here, I’d like you to consider something closely; Imagine with me for a moment; Replace Schumer with a Republican senator, and recalculate.
Does anyone suppose for one ht second that the likes of Hal and Anjin wouldn’t be out on the front of the mob, tar and feathers to hand, demanding an investigation into exactly what I’ve laid out here against Schumer?? We both know better.
As it is, the slime is a Democrat and as such, will never face the music on this.And of course they get to blame Chimpy BOOOSHHH and McHiler Cheney.
Schumer’s action is politically motivated, pure and simple.
into exactly what I’ve laid out here against Schumer??
a) I’m not an idiot such as you
b) I actually know how the economy works
c) I’m not an idiot such as you
Seriously, dude, you live in one of the richest fantasy worlds I’ve seen for anyone who can even write (mostly) coherently on a regular basis.
Still, entertaining – as always.
And btw, what case have you laid out against Schumer? You’ve made an accusation – nothing more – and an accusation of something that would seem to require the liberal use of pixie dust and leprechauns as the mechanism.
It’s clear I think that the release of Schumer’s letter triggered the run. However, it’s more like the small push that collapsed an already tottering structure. If IndyMac had been clearly solvent, I don’t think the run would have happened. Of course, we’ll never know for sure what would have happened without Schumer’s letter, but I think there was a not insignificant probability that IndyMac would have failed anyway.
It’s highly likely, I think, that Schumer was politically motivated, but there are different types of political motivations. I actually think it more likely that he did not intend to cause an immediate run, if for no other reason than that he would fear getting blamed for it. Rather, he probably thought that there was a good chance that IndyMac would collapse later, and that he could then show everyone how he was looking out for them, and how he had warned the regulators about it, but was ignored, etc.
As to which party is to blame for this, there seems to be plenty of blame to go around.
On a related note, the Fannie/Freddie crisis and the CA energy crisis seem to be examples of situations where compromise is actually worse than either alternative. In other words, tightly regulated industries (usually) work okay, and also correctly de-regulated industries also (usually) work okay. It’s where you have these bastardized hybrids where things go completely to pot.
It’s clear I think that the release of Schumer’s letter triggered the run.
I gotta say I just don’t understand the mechanism. If a senator comes out tomorrow and does the same for – say – Bank Of America, do you think there’d be a run? How about – oh – Dow Jones? Or name any publicly traded company. Things just don’t work this way.
As Schumer says, pulling the fire alarm doesn’t mean you’ve started the fire. “self fulfilling prophecies” about things that have already happened is an oxymoron.
I thought that rather clear at the outset which is the primary reason I could stop laughing at “I actually know how the economy works”
That’s right enough; As I said the other day, this is in the end directly traceable to the fact that IndyMac specialised in a particular segment of the market; Those who really didn’t qualify for a mortgage. I’ve been saying for some time that what failures occurred would be specifically due to the trend of the federal and state government to push issuing such loans on the idea that it was some sort of panacea cure for racial discrimination. That kind of lean is the prime reason they ended up on the skids. However, even this was correctable, and that was being dealt with, as I gather from the statements of the fed.
That said, however, the immediate cause of the damage be traced to one man… Chuckles Schumer. AS John Riech, the director of the office of THrift Supervision said to Chuckles the clown, a week or so back:
By “trigger”, I simply mean that it was the final little push. Of course the bank already had to be on shaky ground. So, sure, if the letter is about a solid bank, then of course there is no effect. But if the bank is already teetering, and investors are already nervous, then I can imagine that a letter like that can push them over the edge, into withdrawing their money.
If there was no letter, then it would be possible, I guess, in theory, that IndyMac would have pulled through. I don’t know how likely or unlikely that would have been, though.
Ah, so there’s this incredibly shaky structure which someone simply touches and it falls down. Therefore, that person is responsible for the structure being in the incredible state of disrepair. Seriously, guys? This is an ethical issue? Assuming that you’re right, in that Schumer’s letter is the de facto reason for the run, then what in the heck does it matter? Where’s the ethical violation? I’m sure Dr. B sees it, because he’s missing most of the grey matter that analyzes such things, but seriously Anon, could you frame the ethics around it?
Dr. B, your quote talks about “rumors and innuendo”, “incomplete or erroneous information”. Please point out any of that in Schumer’s letter. Rather, it was more of the boy who pointed out the emperor has no clothes – hardly rumor, innuendo, or incomplete and erroneous information.
Twithead,
Please don’t include me in your strange fantasies. Based on what I know about the issue, Schumer’s actions are certainly open to question. Unlike you, I do not see the world in black and white, and I am happy to call Democrats to task, something they often merit.
Recent events do not change the fact that much of this mess goes back to Phil Gramm and banking deregulation, which dismantled firewalls that had been put in place after the depression. Well, they are gone now, and voila, we have a failure that is, well, depression-esque.
Fortunate, Paulson is one of the few people in the Bush administration who actually knows what he is doing. Drawing up plans for re-regulation, I suspect.
Wonder how Gramm is doing now that he has joined the massive pile of bodies under McCain’s bus. Well there is always lobbying to help billionaires evade taxes to fall back on…
Well, I don’t mean to claim that Schumer is solely responsible, or even mostly responsible. However, I personally don’t know what would have happened if he had not released the letter.
I am not saying it is an ethical violation. Rather, I don’t know. If there was a significant chance that IndyMac would have pulled through, and if he did this specifically with the intent to cause a run, for political purposes, then that seems unethical to me.
On the other hand, if the regulators were completely incompetent, and he thought that he needed to make the letter public to force public pressure to avoid even greater disasters, then it seems like it would actually be his duty.
I’m guessing that the truth is somewhere in the middle, but I don’t know where.
then it seems like it would actually be his duty.
Considering his banking committee position in the Senate, this would seem like a reasonable inference.
if he did this specifically with the intent to cause a run, for political purposes, then that seems unethical to me.
Well, sure. But so far, other than wild accusations, I can’t see anyone making such linkage. Are we going to have investigations into the matter? Has anyone come out with anything more than innuendo? Any favors he’s done? Trails through political donations to him?
It does seem rather bizarre to have innuendo, false and incomplete information regarding Schumer’s supposed intent thrown up in response to a charge of false and incomplete information regarding Mae, Mac, etc.
Well, not really, but you know…
Well, I presented two extremes, just to make a point. I don’t think any officials have publicly accused or insinuated Schumer of doing this intentionally. I’m not sure about the blogosphere or pundits.
So far, it seems to be mostly just:
Feds: You irresponsible idiot, look what you did, you caused IndyMac to fail!
Schumer: Did not! It was you not doing your job that caused it to fail!
I’m not sure about the blogosphere or pundits.
Seems pretty clear that the right wing thinks this is a line to push.
So far, it seems to be mostly just…
Well, mostly that seems like the OTS, not the Feds in general. But still, I can *almost* see the idea that it was a gas leak waiting for a spark and they complaining about the spark – almost. But the simple fact is that if there was even a hint that things weren’t completely beyond hope, Schumer would have been relevant.
It’s pretty clear that things in the financial sector are pretty darn shaky on a lot of different fronts. When “hope” is the plan, I think there are far more important issues that are to blame than someone merely pointing out what’s obvious to everyone looking…
Wandering off-topic for a moment, I wanted to note the passing of Dr. Michael E. DeBakey. The man was a giant. His Wikipedia bio is worth a look:
http://en.wikipedia.org/wiki/Michael_DeBakey
I wanted to note the passing of Dr. Michael E. DeBakey
What an incredible life. Godspeed.
For those interested in some details of attempts to rein in Fannie and Freddie, there is this. It at least suggests that Democrats are far from blameless in this, though I don’t have the time, expertise, or interest to apportion blame exactly.
It would certainly seem more likely than with it.
I daresay with such a letter, the strongest of banks would at least have a hard time handling the run.
Please don’t include me in your strange fantasies. Based on what I know about the issue,
Utter nonsense. I’ll give you credit that you go with Schumer’s actions being questionable at least. (I’ll also say I’m amazed you got there with only the slight tap of the sledge!) But you lose those extra points when you start in on deregulation. Anon has this one correct when he says:
To blame this on deregulation, 2 years after the Democrats take over again, and begin shifting direction toward greater regulation, is thereby questionable at least.
Anon:
Yes, I noted the Post piece, and have something in the hopper for it, which I may or may not use. (You’d be surprised perhaps by the amount of writing I do that never makes it online for one reason or another. Usually, it’s because by the time I get it near finished, new info comes to light that makes the stuff better off re-writen from line 1.) Their angle on the Democrat culpability is interesting, and unlikely from an MSM outlet.
Yes, many, even solid banks, would not survive a run. But, would there even be a run? Initially I was thinking that there would not be a run, because depositors would not give much credence to Schumer’s letter. After a second thought, I think I don’t really know what would happen. That depends on psychology as much as anything else, and I have no idea about that.
BTW, the WP article certainly portrays Schumer negatively. Matt Yglesias (a liberal blogger), also lays blame on Schumer.
Then if it’s obvious, you’ve made no great discovery, here. And of course things are shaky just now, and have been since 9.11. That meshed with the cyclical nature of economies, and “Green” anti growth policies, particularly surrounding the price and production of oil, what the hell did you expect?
But more, as I say, is the idea that we’ve been under a verbal assult from the left about the economy for eight years now. After all that, it wouldn’t take much more of a push to start a panic. And I say Schumer played his part.
And given the OTS history, it seems a bit of a stretch to imply that the response against Schumer was politically motivated.
Given recent history, no question. The image has been beat into the American people that the economy is crashing. Doesn’t take much of a push past that.
Yes, I noted that, as well. I usually find his take on stuff… well… wanting. So when even he admits this one… it’s worth a listen.
Interesting, because the Bush administration is hard at work on a regulation plan for the banking industry. Quite far reaching too.
>WASHINGTON (CNN) — The Federal Reserve would have the power to regulate virtually the entire banking and securities industry under proposals to be unveiled Monday by Treasury Secretary Henry Paulson, according to a summary of the proposals provided to CNN late Friday.
Paulson will introduce the proposals, designed to modernize the financial oversight structure, in a speech Monday, said Treasury Department spokeswoman Michele Davis.
While Davis said that the proposals have been in the works since June — two months before the current sub-prime mortgage crisis began affecting financial markets — it is a long-term restructuring project that is at least in part a response to criticism that the federal government has not been ahead of the current problems.
I don’t give Bush much credit, but Paulson and Gates are good men.
Complete Story:
http://money.cnn.com/2008/03/28/news/economy/paulson_financial_overhaul/index.htm?postversion=2008032909
Yea, whats the deal with that? Why did GHW Bush ban drilling with an executive order? Why has little Bush refused to lift the ban for 7.5 years with a simple stroke of the pen? Could it be so their good friends in Saudi Arabia can make a killing and buy half our country out from under us? Inquiring minds want to know…
Interesting article on the sub-prime crisis in The American, which is far from a far-left tome. While it does argue against more regulation, not one does it mention Democrats in Congress as a causative factor. But I am sure Twit knows more about the issue than a mere professor at Carnagie-Mellon.
Why the Crisis?
By Allan H. Meltzer Wednesday, February 20, 2008
Filed under: Big Ideas, Economic Policy
The roots of the subprime meltdown are found in the financial industry’s compensation system and in the Basel Accords.
Mortgage feature. Predictably, Congress and much of the media are looking for convenient villains to explain why the subprime mortgage market brought on a financial crisis. Just as predictably, they will find some bad apples and dubious practices and will offer new legislation designed to prevent another meltdown. They will also do their best to smear the reputations of those responsible for policy earlier in this decade.
Finding scapegoats and passing new legislation may satisfy the public, but it will do nothing to prevent a similar crisis a few years from now. The right question to ask is: what incentives encouraged traders and firms to buy and sell subprime mortgages?
Ironically, most of the buyers and sellers were graduates of elite business schools. Better than most, they should have known enough to avoid making loans with no down payments to borrowers who had few assets and poor credit records. The reason they didn’t is that their incentive structure encouraged them to ignore the quality of what they sold and bought.
The financial industry pays enormous bonuses for ‘performance.’ When the profits for subprime traders were great, bonuses were large and, for many, irresistible.
The financial industry pays enormous bonuses for “performance.†For several years, the profits for subprime traders were great and the bonuses were large (and, for many, irresistible). Their supervisors had the same incentives. The main incentive was to increase the size of one’s bonus by increasing the firm’s bottom line. Failure to play the game could cost you not only your bonus, but also your job. The financial industry’s compensation system created these incentives. By the time the crisis came, the people who fueled it had sold their subprime assets to someone else, along with assurances from the rating agencies.
So where were the financial regulators in all of this? The Basel Accords required banks to increase capital if they held these subprime securities. Instead of holding the assets in a monitored financial system, the mortgages and claims went…well, goodness knows where. We find out only when the holders are in distress. In light of the many shortcomings of past bank regulation and supervision, the Basel Accords had created incentives to hide risky assets off the banks’ balance sheets. This was a big mistake.
More regulation is not the answer. Decades of regulation to protect the savings and loan industry ended with a massive bill footed by U.S. taxpayers and the collapse of the entire industry. The 2002 Sarbanes-Oxley Act has had harmful, unintended consequences. More than 50 years passed before Congress repealed the disincentives imposed by the 1933 Glass-Steagall Act and interest rate regulation. Regulation creates incentives that are not foreseen. Interest rate regulation led to the creation of money market funds, just as the Basel Accords created incentives for avoidance of capital requirements. There are many other examples.
As long as the current incentives remain, financial problems will come again in a different form. The financial industry must be encouraged to revise its compensation system to reduce the incentives that reward socially costly behavior and ultimately trigger financial crises. To be sure, that’s not what the Bush administration and the Federal Reserve have done, and that’s not what Congress is likely to do. Instead, they have sought to protect people who made bad decisions by changing the terms of the contracts. There is no surer way to create future crises than to push the subprime losses onto taxpayers.
Capitalism without failure is like religion without sin—it just doesn’t work.
Allan H. Meltzer is a professor of political economy at Carnegie Mellon University and a visiting scholar at the American Enterprise Institute.
*****
I certainly agree with the issue of greed as a large factor in the problem. A few years ago, the Bay Area was teeming with mortgage brokers making 20K a month writing loans they knew would fail. The bottom line was, they did not give a crap as long as they got paid.
What is to blame for high oil prices? Is it the drilling ban? If so, go talk to the Bush family.
From NY Times
Mr. Bush has said for years that he favors opening up the Arctic National Wildlife Refuge to drilling, and in 2006 he signed into law a bill that expanded exploration in the Gulf of Mexico. But the topic of coastal drilling elsewhere has been an extremely sensitive one in the Bush family; Mr. Bush’s father signed a presidential executive order in 1990 banning coastal oil exploration, and Mr. Bush’s brother Jeb was an outspoken opponent of offshore drilling when he was governor of Florida.
Now, though, President Bush is considering retracting his father’s order. Although the chief White House spokeswoman, Dana Perino, said Mr. Bush “is not taking any executive action†on Wednesday, two people outside the White House said such a move was under serious consideration, and a senior White House official did not dispute their account.
But the Institute for Energy Research, a nonprofit research organization that promotes “free-market energy and environmental policy,†has called for Mr. Bush to rescind the executive order and chided him on Wednesday for not doing so. “The president has chosen to speak softly when American consumers need him to wield a big stick,†the group’s president, Thomas J. Pyle, said in a statement on Wednesday. “This was a missed opportunity.
We needn’t worry, when Obama comes in he’ll just magically raise taxes on the rich and we can use some of all that free money to pay off our debt, and build portable windmills for our motorbikes.
Also…
True.
Then again, Bush isn’t a conservative, as I’ve been saying since 1999. And as to the the drilling ban in particular, do you think he’d be doing that absent pressure from the left? Bush has always been about go-along/Get-along politics, and what you cite is simply more of the same. It’s the main reason I’ve never been excited about him. Again, we come to Anon’s comment:
What we end up with, in the case of Bush, and I fear in the case of McCain, is in trying to accomidate both ends, we end up with the situation Anon describes.
(Well, so much for Bit being a big Bush defender, huh? Guess you need to come up with another meme)
What you have been saying, over and over and over, is that its all the Democrats fault. To think, it only took a tap of the sledge to get you to change your tune.
The left has put pressure on Bush to do all sorts of things. End the Iraq war. No retroactive FISA immunity, higher mileage standards. He has told the left to go take a flying f__K over and over.
Funny how the lefts mind control rays only worked on an issue that is helping his buddies the Saudis rake in untold billions.
So tell again us how the Democratic congress caused the subprime crisis. Be specific please. Cite legislation.
Not exactly. I’ve been saying it’s the fault of liberals. Democrats, by virtue of having been over-run by the far left, are merely the largest part of that.
Go back up the rope, here, and look again, at what I said the basic cause for the failure of IndyMac was, the bit with Schumer aside, and you’ll have your answer.
Well the economics professor from Carnagie Mellon seemed to think it was the fault of greedy folks in the lending industry. He did not mention liberals.
Of course, you think the extinction of dinosaurs is the fault of liberals…
I have not followed the details of this well enough to really know which politicians to blame. However, in the interest of intellectual consistency, I should point out that the article by the CMU professor does not exclude the possibility that Democrats in Congress thwarted attempts to more tightly regulate Fannie and Freddie.
Of course people in the lending industry are going to be greedy. I think that’s to be expected from just about any industry. It’s the role of government to constrain and direct greed so that it harms are minimized, and its benefits are maximized. There are published articles in NYTimes and the Post that suggest that Democrats were resistant to efforts to more tightly regulate that greed. I don’t know how accurate they are, just pointing them out.
Furthermore, the article by Meltzer actually argues for reduced regulation, rather than more. What he’s actually suggesting seems to be more along the lines of privatization, and regulating only as much as necessary to align incentives correctly. If asked, I guess he would probably say something along the lines of, “Yes, the Democrats did thwart more regulation, but the regulation was misguided anyway.” The author is a visiting scholar at AEI after all.
Personally, privatization would be more my first instinct also. I’m open to explanations as to why that’s a bad idea, though. And, as a moderate liberal with libertarian leanings, I’m also sympathetic to government efforts to help the underprivileged.
Thats true, but since the topic of the article was what caused the crisis, I would think he would include Democrats in Congress if that was part of the problem as he saw it. He did not exclude the influence of tidal forces either.
As for blame, I think think there is blame on both parties, however, the party that had complete control of the government for 6 years is probably more culpable.
As for greed, well that is not going anywhere. How do we mitigate its effects? Back in the 80s, I was all for deregulation. Then, as it actually started to be implemented, I saw how it could have a damaging effect in sectors vital to our economy. Its a tricky balance. How do we not regulate industries until they are non-competive, yet now allow folks like GW’s good friend Ken Lay to screw millions of people and do harm to our country?
I would think the answer to that one to be rather obvios.
And Anjin, look, for the most part and at least historically, “liberal” “Leftist” and “democrat” have been pretty much interchangeable.
In the case you cite…(and in many such) they’re simply leading the parade, since they have control of Congress. Liberal republicans helped, of course, but I doubt they’d do it on their own, if the Republicans were still in command, don’t you?
Only if your thought processes did not extend further than “Liberals are to blame for everything bad that happens”.
Did you go to college? If it was you writing a paper, and you told the professor that you omitted a crucial fact because “I would think the answer to that one to be rather obvios”, you would fail.
It is pretty certain that a professor with expertise at this level does not commit freshman mistakes, even if you do.
Really? Can you document that? (no Red State or Rush or Coulter, please).
The attempt the make “leftist” and “Democrat” interchangeable is something the Rushites have done to try and take advantage of the negative connotations that still hang on “leftist” as a result of the cold war. Pretty transparent, and not something that educated, sophisticated people fall for…
Well, let’s test this; Is the prof you’re pointing to, a vocal conservative?
No?
Figure this one out for yourself.
And what you’ve just done is to try, without any facts, to avoid those negatives. Sorry, no sale. Pretty transparent, and not something that sophisticated people fall for.. or educated… Like, anything above 7th grade, for example.
Not all conservatives are small-minded twits. The professor made his opinion clear as to what caused the crisis. My suggestion is that you look beyond fox and red state. In other words, do your homework. I have no problem citing the work of conservative scholars (actually I am reading some Buckley at the moment). Perhaps you should try observing the world beyond your nose sometime.
Did you present any facts? Nope. So by your own standard, your argument is invalid. Which kind of proves my point about your lack of sophistication. Sale closed.
Meaning I am, thank you very much!
If I’m so small minded, why is it I continue to converse with you? Get that worked out and get back to me.
Yep. And I questioned the basis of his opinion.
I find that when leftists start in with “Small minded twit”, “Rushie” “Fox News” and so on, that facts aren’t accepted anyway. Go ahead, shock me by giving me a reason to think you’re otherwise.
I have never used the expression “Rushie” though I do use “Bushie” (which is an accepted term in the Bush White House). I used to use Bushite, but several right-leaning blogs actually blocked it.
As for twit, I started using that when you defended your use of “Democrat Party” If you want to be addressed in a respectful manner, you need to extend that courtesy to others. Your constant use of “leftist” also falls under that unbrella.
Fact remains, you did not back up your argument with any facts, thus failing your own litmus test.
As for your continuing to converse with me, I suspect that you, like me, just enjoy arguing about politics. So we at least have one thing in common. Don’t suppose you are in to high end audio…
Nope. No Sale.
Welcome to “Words Mean Things”.
The last few nomination processes have lbeled that party as anythng BUT democratic, and as such I will not use their self-chosen title thereby giving them credit they do not deserve…. in much the same way I wouldn’t call a quadraplegic a ‘Fireman”, regardless what he wanted to be called. Doing so is not a coutesy, it’s a lie, and those are two distinctly different things.
If you can’t deal with that, it’s your problem not mine. Have a word with the dictionary folks about changing the meaning of the word, if it’s that much an issue for you. Let me know how long it goes between the time they start laughing and the time they hang up, OK?