Jim Crum just sent me the following video on the Never Find Out website. It seems that while John McCain was calling for a reform of Fannie Mae and Freddie Mac for over two years, Barack Obama was fighting the very same proposals. Obama was a recipient of significant contributions from Fannie Mae and Freddie Mac, but McCain wasn't.
Showing posts with label subprime crisis. Show all posts
Showing posts with label subprime crisis. Show all posts
Tuesday, October 21, 2008
Thursday, September 25, 2008
John McCain Follows Jimmy Carter
In an e-mailed press release, Andy Martin asks whether George Bush's invitation to Barack Obama to "help solve the financial crisis that is supposedly threatening America" may have been "the biggest blunder in presidential politics since President Jerry Ford in 1976 said Poland was not in the Soviet sphere of influence."
I have been complaining about the Federal Reserve Bank's influence on the economy and the triumph of Keynesian economics among Republicans for the past two or three years, and my old friend Howard S. Katz has been complaining about them for nearly 40 years. The underlying problem with the current financial system is its excessive expansion of credit, which in turn stimulated overly aggressive lending and excessive real estate prices.
The response of conservatives to the crisis reflects what psychologists call perceptual distortion. Distortion occurs when someone feels threatened by information. The person does not hear it or hears it differently.
Conservatives have been reacting to the current decline in real estate prices by saying it is due to Progressive lending programs, which is only partly true. The excessive lending, like the tech bubble, would not have occurred without Republican Federal Reserve monetary policies. When Nixon said that "we are all Keynesians now" he ensured that distortions of this kind would occur over time. It took 37 years, and Howard is to be commended for fighting this fight during the upswing of the Republican Keynesian bubble.
Politicians always try to repeal the laws of economics, and we see the same kind of distortion occurring among Republicans now. One example is the belief that even more inflation, increasing the money supply by one half or $750 billion, would solve the problem. This, of course, begs the question of why the past 75 years of monetary inflation did not solve the "problem". Also, the idea that house prices must always rise was nonsensical when people were saying it in the '80s, '90s and '00s. Now that it is turning out to have been false all along, politicians and conservatives argue that there is a CRISIS.
The correction of real estate prices will causes losses among those who paid too much, just as the tech bubble of 1999 caused losses. Rather than confront the excesses and incompetence of the Federal Reserve Bank as an institution, conservatives, along with the Progressive media, frame this as a CRISIS. A CRISIS.
Martin points out that Obama has been making political hay out of Bush and McCain's naive invitation:
"Obama will have attained the last stop on his self-referential crusade by being accepted at the White House as a statesman and dealmaker. Good grief."
The invitation is symptomatic of incompetence at the apex of the Republican hierarchy that is philosophical as well as political. Lacking a truthful model of what Federal Reserve Bank monetary expansion over the past 40 years has done to the economy, the Republicans fall into the same pattern that Jimmy Carter did in the late 1970s when he listened to the Progressive economists of the Brookings Institution who claimed that inflation helps the poor and working classes because they hold more debt than the wealthy. This claim overlooked historical and dynamic realities. In particular, monetary expansion boosts the stock market, helping the wealthy. Inflation comes several years later and will not show up in cross sectional or even three-year-lagged correlations between monetary expansion and wealth. The gains that the middle class enjoys due to inflation are entirely attributable to increasing house prices and so are difficult to extract except through debt (or becoming homeless), which requires a riskier profile than many people prefer. Neverthelss, debt and inflation have become national habits, creating a stress-and-risk profile that frustrates many Americans, even as they consume on credit. Moreover, much of the gain from house prices is eroded through increasing repair, insurance and property tax costs.
Older Americans are forced to give up their homes because of such costs, and many are forced into poverty in order to continue to live in their homes. Economists treat increasing house prices as wealth gains, but such gains come at the costs of increased risk.
Equally, such gains come at the expense of other Americans. In order to gain due to house prices, Americans must ultimately sell their homes to new buyers, and those buyers must pay much higher prices. Thus, higher house prices mean that new buyers cannot afford homes equal to what they once could. My students will not share in the American dream if the current Republican administration has its way. On paper Americans seem to become wealthier, but what has occurred is a transfer of wealth from buyers to sellers, and the sellers often do not want to sell but have to because they would forced into eating cat food otherwise. Moreover, they cannot enjoy their "wealth" because doing so involves increasing stress due to borrowing or selling. Thus, inflation destroys community. It pits one generation against the other, it forces people to leave their homes and it prevents children from remaining in the communities in which they grew up.
The lag between monetary expansion and price inflation prevents economists from detecting monetary expansion's relationship to income inequality. Hedge funds have obtained capital and made profit through monetary expansion. That wealth is attributable to future inflation. Demand for resources increases prices in later periods, when average Americans foot the bill for the hedge fund managers' profits. In order to see this you need a multi-decade view. The methodologies that economists use look at single years at a time and relate same-period phenomena (inflation in this period versus house price in this period), but the process takes decades to unfold. However, left wing writers such as William Greider in his book "Secrets of the Temple" about the Fed, were happy to make the nonsense claim that inflation helps the poor. Greider can be excused because he was basing this argument on academic studies. But how wrong can academics be before we conclude that they are simply quacks and then move on?
Unfortunately, today's conservatives have bought into the Keynesian model, which is now going to turn out to be suicidal for them. They are following the path of Jimmy Carter.
I would urge a return to monetary conservatism, the gold standard, and a Great Awakening from Republicans' Keynesian slumber.
I have been complaining about the Federal Reserve Bank's influence on the economy and the triumph of Keynesian economics among Republicans for the past two or three years, and my old friend Howard S. Katz has been complaining about them for nearly 40 years. The underlying problem with the current financial system is its excessive expansion of credit, which in turn stimulated overly aggressive lending and excessive real estate prices.
The response of conservatives to the crisis reflects what psychologists call perceptual distortion. Distortion occurs when someone feels threatened by information. The person does not hear it or hears it differently.
Conservatives have been reacting to the current decline in real estate prices by saying it is due to Progressive lending programs, which is only partly true. The excessive lending, like the tech bubble, would not have occurred without Republican Federal Reserve monetary policies. When Nixon said that "we are all Keynesians now" he ensured that distortions of this kind would occur over time. It took 37 years, and Howard is to be commended for fighting this fight during the upswing of the Republican Keynesian bubble.
Politicians always try to repeal the laws of economics, and we see the same kind of distortion occurring among Republicans now. One example is the belief that even more inflation, increasing the money supply by one half or $750 billion, would solve the problem. This, of course, begs the question of why the past 75 years of monetary inflation did not solve the "problem". Also, the idea that house prices must always rise was nonsensical when people were saying it in the '80s, '90s and '00s. Now that it is turning out to have been false all along, politicians and conservatives argue that there is a CRISIS.
The correction of real estate prices will causes losses among those who paid too much, just as the tech bubble of 1999 caused losses. Rather than confront the excesses and incompetence of the Federal Reserve Bank as an institution, conservatives, along with the Progressive media, frame this as a CRISIS. A CRISIS.
Martin points out that Obama has been making political hay out of Bush and McCain's naive invitation:
"Obama will have attained the last stop on his self-referential crusade by being accepted at the White House as a statesman and dealmaker. Good grief."
The invitation is symptomatic of incompetence at the apex of the Republican hierarchy that is philosophical as well as political. Lacking a truthful model of what Federal Reserve Bank monetary expansion over the past 40 years has done to the economy, the Republicans fall into the same pattern that Jimmy Carter did in the late 1970s when he listened to the Progressive economists of the Brookings Institution who claimed that inflation helps the poor and working classes because they hold more debt than the wealthy. This claim overlooked historical and dynamic realities. In particular, monetary expansion boosts the stock market, helping the wealthy. Inflation comes several years later and will not show up in cross sectional or even three-year-lagged correlations between monetary expansion and wealth. The gains that the middle class enjoys due to inflation are entirely attributable to increasing house prices and so are difficult to extract except through debt (or becoming homeless), which requires a riskier profile than many people prefer. Neverthelss, debt and inflation have become national habits, creating a stress-and-risk profile that frustrates many Americans, even as they consume on credit. Moreover, much of the gain from house prices is eroded through increasing repair, insurance and property tax costs.
Older Americans are forced to give up their homes because of such costs, and many are forced into poverty in order to continue to live in their homes. Economists treat increasing house prices as wealth gains, but such gains come at the costs of increased risk.
Equally, such gains come at the expense of other Americans. In order to gain due to house prices, Americans must ultimately sell their homes to new buyers, and those buyers must pay much higher prices. Thus, higher house prices mean that new buyers cannot afford homes equal to what they once could. My students will not share in the American dream if the current Republican administration has its way. On paper Americans seem to become wealthier, but what has occurred is a transfer of wealth from buyers to sellers, and the sellers often do not want to sell but have to because they would forced into eating cat food otherwise. Moreover, they cannot enjoy their "wealth" because doing so involves increasing stress due to borrowing or selling. Thus, inflation destroys community. It pits one generation against the other, it forces people to leave their homes and it prevents children from remaining in the communities in which they grew up.
The lag between monetary expansion and price inflation prevents economists from detecting monetary expansion's relationship to income inequality. Hedge funds have obtained capital and made profit through monetary expansion. That wealth is attributable to future inflation. Demand for resources increases prices in later periods, when average Americans foot the bill for the hedge fund managers' profits. In order to see this you need a multi-decade view. The methodologies that economists use look at single years at a time and relate same-period phenomena (inflation in this period versus house price in this period), but the process takes decades to unfold. However, left wing writers such as William Greider in his book "Secrets of the Temple" about the Fed, were happy to make the nonsense claim that inflation helps the poor. Greider can be excused because he was basing this argument on academic studies. But how wrong can academics be before we conclude that they are simply quacks and then move on?
Unfortunately, today's conservatives have bought into the Keynesian model, which is now going to turn out to be suicidal for them. They are following the path of Jimmy Carter.
I would urge a return to monetary conservatism, the gold standard, and a Great Awakening from Republicans' Keynesian slumber.
Wednesday, September 24, 2008
Idiosyncracies of American Democracy
Democracy does not work so rationally as we would wish. The public knows the word "economy" and believes that there are difficulties with it. It is unlikely that many of those who believe that there are difficulties with the economy can identify the diffculties accurately. For example, real wages have been declining since the early 1970s, but the public has not generally been concerned about this trend, which ought to be of serious concern to anyone who works. However, now that the mass media has been telling people that house prices, which have increased dramatically during the same period, are too low, the public feels that there is a crisis.
When I was in college in 1974 I worked as a door man in an apartment building in Manhattan on 54th Street between 5th and 6th Avenues. It was down the street from Gucci's on 5th and across the street from the back entrance of the Museum of Modern Art. At that time I earned about $200 per week and a one bedroom apartment in that building was selling for $55,000. If you multiply $200 per week times 52 weeks and divide the result into $55,000 you get 5.3 times.
A one bedroom apartment in that same building now probably sells for over $1 million. However, wages for building workers have probably gone up about three or four fold. If you're generous to today's door men and you divide $1 million by $45,000 you get 22.2 times, and that is probably an understatement because the apartment may be selling for more than $1 million and the doorman may be making less than $45,000.
Despite apartment prices' having gone up at four times the rate of wages, the public is willing to believe that a reduction in housing prices constitutes a "crisis" and some kind of "unruliness in the markets" that requires massive government intervention.
Let real estate prices fall. Then, perhaps, I can afford a new apartment in Manhattan and move back to civilization!
Even odder than public unawareness that the average person earns less than his parents did is the belief that Barack Obama is somehow best qualified to alleviate the non-existent housing "crisis".
Andy Martin has forwarded a press release that indicates that:
"A new Washington Post poll now shows Barack Obama opening up a decisive lead based on the amazing belief that Obama is more competent to manage the economy."
The Washington Post article states that:
"Just 9 percent of those surveyed rated the economy as good or excellent, the first time that number has been in single digits since the days just before the 1992 election. Just 14 percent said the country is heading in the right direction, equaling the record low on that question in polls dating back to 1973.
"More voters trust Obama to deal with the economy, and he currently has a big edge as the candidate who is more in tune with the economic problems Americans now face. He also has a double-digit advantage on handling the current problems on Wall Street, and as a result, there has been a rise in his overall support."
This is especially odd because it is Obama who has received the lion's share of backing from Wall Street and from the pro-Wall Street media, for instance the New York Times and the media conglomerates that depend on Wall Street for financing. Given that the current "sub-prime crisis" is of Wall Street's making and Wall Street has primarily contributed to Senator Obama, current public opinion can best be described as idiosyncratic.
Part of the idiosyncratic public opinion is likely due to the media's slanted coverage of Obama and McCain. Jim Crum writes in an e-mail:
"I’ve said for months now that the main stream media need to be wearing...knee pads when dealing with Mr. Obama. It really has gotten that bad, and I doubt that there is any sin, now matter how grievous, that would escape their filters and be reported. Meanwhile, there is a near complete blackout on anything or McCain/Palin accomplishes. (Yes I have reservations about McCain & Palin, but given the alternative, there is no substantive choice)."
In an e-mailed press release Andy Martin states that McCain should break with the Bush administration and:
"speak clearly and simply and directly: he must announce in no uncertain terms his total opposition to the Wall Street bailout.
"First, over the past year I have repeatedly pointed out that the current financial crisis is a "manufactured" crisis. The urgency was created by maladroit steps to rein in sub-prime mortgages when they posed no threat to the overall economy. One bad step led to another. We have rather clumsily managed to topple our own financial dominoes. The mess is Wall Street's fault, not George Bush's responsibility."
In several e-mails about the media's reaction to the Obama's campaign lies about Senator McCain's supposed blocking of stem cell research Bob Robbins points out:
"That our media finds it all so amusing tells us just how much they value the truth as well."
The Progressives believed that a well informed democracy would be possible and that the public could fairly assert its own interests given an abundance of good information. Today's public is widely misled by the Progressives' descendants, the mass media, and is incapable of assessing even the most elementary facts about the political economy.
I have an increasing share of my assets either in hard commodities or outside the United States in foreign currency CDs. I do not believe that this country is headed for a healthy future, and it will be worse if Barack Obama, Wall Street's and the New York Times's boy wonder, is elected.
When I was in college in 1974 I worked as a door man in an apartment building in Manhattan on 54th Street between 5th and 6th Avenues. It was down the street from Gucci's on 5th and across the street from the back entrance of the Museum of Modern Art. At that time I earned about $200 per week and a one bedroom apartment in that building was selling for $55,000. If you multiply $200 per week times 52 weeks and divide the result into $55,000 you get 5.3 times.
A one bedroom apartment in that same building now probably sells for over $1 million. However, wages for building workers have probably gone up about three or four fold. If you're generous to today's door men and you divide $1 million by $45,000 you get 22.2 times, and that is probably an understatement because the apartment may be selling for more than $1 million and the doorman may be making less than $45,000.
Despite apartment prices' having gone up at four times the rate of wages, the public is willing to believe that a reduction in housing prices constitutes a "crisis" and some kind of "unruliness in the markets" that requires massive government intervention.
Let real estate prices fall. Then, perhaps, I can afford a new apartment in Manhattan and move back to civilization!
Even odder than public unawareness that the average person earns less than his parents did is the belief that Barack Obama is somehow best qualified to alleviate the non-existent housing "crisis".
Andy Martin has forwarded a press release that indicates that:
"A new Washington Post poll now shows Barack Obama opening up a decisive lead based on the amazing belief that Obama is more competent to manage the economy."
The Washington Post article states that:
"Just 9 percent of those surveyed rated the economy as good or excellent, the first time that number has been in single digits since the days just before the 1992 election. Just 14 percent said the country is heading in the right direction, equaling the record low on that question in polls dating back to 1973.
"More voters trust Obama to deal with the economy, and he currently has a big edge as the candidate who is more in tune with the economic problems Americans now face. He also has a double-digit advantage on handling the current problems on Wall Street, and as a result, there has been a rise in his overall support."
This is especially odd because it is Obama who has received the lion's share of backing from Wall Street and from the pro-Wall Street media, for instance the New York Times and the media conglomerates that depend on Wall Street for financing. Given that the current "sub-prime crisis" is of Wall Street's making and Wall Street has primarily contributed to Senator Obama, current public opinion can best be described as idiosyncratic.
Part of the idiosyncratic public opinion is likely due to the media's slanted coverage of Obama and McCain. Jim Crum writes in an e-mail:
"I’ve said for months now that the main stream media need to be wearing...knee pads when dealing with Mr. Obama. It really has gotten that bad, and I doubt that there is any sin, now matter how grievous, that would escape their filters and be reported. Meanwhile, there is a near complete blackout on anything or McCain/Palin accomplishes. (Yes I have reservations about McCain & Palin, but given the alternative, there is no substantive choice)."
In an e-mailed press release Andy Martin states that McCain should break with the Bush administration and:
"speak clearly and simply and directly: he must announce in no uncertain terms his total opposition to the Wall Street bailout.
"First, over the past year I have repeatedly pointed out that the current financial crisis is a "manufactured" crisis. The urgency was created by maladroit steps to rein in sub-prime mortgages when they posed no threat to the overall economy. One bad step led to another. We have rather clumsily managed to topple our own financial dominoes. The mess is Wall Street's fault, not George Bush's responsibility."
In several e-mails about the media's reaction to the Obama's campaign lies about Senator McCain's supposed blocking of stem cell research Bob Robbins points out:
"That our media finds it all so amusing tells us just how much they value the truth as well."
The Progressives believed that a well informed democracy would be possible and that the public could fairly assert its own interests given an abundance of good information. Today's public is widely misled by the Progressives' descendants, the mass media, and is incapable of assessing even the most elementary facts about the political economy.
I have an increasing share of my assets either in hard commodities or outside the United States in foreign currency CDs. I do not believe that this country is headed for a healthy future, and it will be worse if Barack Obama, Wall Street's and the New York Times's boy wonder, is elected.
Sunday, September 21, 2008
Contrairimairi on Barack Obama's Involvement in the Sub-Prime Crisis
Mitchell,
It occurred to me that we are missing the boat on just how bad BO's involvement in the fannie and freddie scandal really is.
Everyone keeps saying that Christopher Dodd received more money than BO, and he did. The point they are missing, Chris Dodd WAS in the Senate for all 20 of the years they investigated. Chris Dodd did NOT receive more money from fannie and freddie than BO did. BO attached himself so well to the "inside track" from these people, (maybe because he was tightening affiliations with Raines and Johnson for later) that in just three of the 20 years they counted, BO was so far over the top in funds from fannie and freddie, it almost makes one think there should be an investigation into what else was going on between him and freddie and fannie's higher ups! Wonder if the "papers" are missing. There must be some type of correspondence. Think BO put them away with all the rest of the papers he can't seem to find?
Despite his "protests" to the former CEO's receiving golden parachutes, can we tell if he even TRIED to stop it? My answer to that "smell test" would probably be a, "NO!" We have all seen how many times his mouth is saying one thing, but dealing under the table he is doing something entirely different.
I am having a very difficult time understanding how he made so much money from fannie and freddie in such a very short time. When things surrounding BO stink......they REALLY stink!
Mairi
It occurred to me that we are missing the boat on just how bad BO's involvement in the fannie and freddie scandal really is.
Everyone keeps saying that Christopher Dodd received more money than BO, and he did. The point they are missing, Chris Dodd WAS in the Senate for all 20 of the years they investigated. Chris Dodd did NOT receive more money from fannie and freddie than BO did. BO attached himself so well to the "inside track" from these people, (maybe because he was tightening affiliations with Raines and Johnson for later) that in just three of the 20 years they counted, BO was so far over the top in funds from fannie and freddie, it almost makes one think there should be an investigation into what else was going on between him and freddie and fannie's higher ups! Wonder if the "papers" are missing. There must be some type of correspondence. Think BO put them away with all the rest of the papers he can't seem to find?
Despite his "protests" to the former CEO's receiving golden parachutes, can we tell if he even TRIED to stop it? My answer to that "smell test" would probably be a, "NO!" We have all seen how many times his mouth is saying one thing, but dealing under the table he is doing something entirely different.
I am having a very difficult time understanding how he made so much money from fannie and freddie in such a very short time. When things surrounding BO stink......they REALLY stink!
Mairi
Thursday, September 18, 2008
Government Is The Problem: Doug Ross on The Mortgage Crisis
The always-enlightening Doug Ross (h/t Larwyn) blogs convincingly that the roots of the current mortgage crisis are in government regulation. While I was at the health club this afternoon, someone mentioned to me that only if there were more regulation there would have been no problem of this kind. But, of course, Enron cleared the mark-to-market accounting method directly with the Securities and Exchange Commission, so regulation did not work then. Nor is there reason to believe that greed can be regulated or that government lawyers can outsmart private sector ones. What regulation would accomplish, of course, is to squelch innovation in the future.
Fannie Mae and Freddie Mac were the product of government regulation. Further regulation will not solve a problem that regulation created. The concept of business regulation originated in New York State's regulation of the insurance business, which forced Equitable Life to stop selling a colorful product of the late nineteenth century, Tontine Insurance. Insurance in New York is already heavily regulated. Why on earth would anyone believe the old wives' tale that more regulation would solve problems like this?
The excessive risk taking came from financial subsidies that emanated from the Federal Reserve Bank. The entire subprime crisis is a product of government intervention. Only fools would argue that the solution is more government regulation. Government regulation caused the problem.
Doug asks: "But why would anyone underwrite obviously risky mortgages?" and notes that:
"Fannie Mae executives, aided and abetted by Congressional Democrats and the Clinton administration, went hog wild promoting low-quality loans. After all, their stock options and "earnings-per-share challenge grant awards" were at stake. A press release from 1999 -- announcing a $1 billion taxpayer-funded giveaway -- epitomized the era."
The debate in America has become insipid enough that I tune it out. It is refreshing to hear intelligent voices like those of Doug Ross.
Fannie Mae and Freddie Mac were the product of government regulation. Further regulation will not solve a problem that regulation created. The concept of business regulation originated in New York State's regulation of the insurance business, which forced Equitable Life to stop selling a colorful product of the late nineteenth century, Tontine Insurance. Insurance in New York is already heavily regulated. Why on earth would anyone believe the old wives' tale that more regulation would solve problems like this?
The excessive risk taking came from financial subsidies that emanated from the Federal Reserve Bank. The entire subprime crisis is a product of government intervention. Only fools would argue that the solution is more government regulation. Government regulation caused the problem.
Doug asks: "But why would anyone underwrite obviously risky mortgages?" and notes that:
"Fannie Mae executives, aided and abetted by Congressional Democrats and the Clinton administration, went hog wild promoting low-quality loans. After all, their stock options and "earnings-per-share challenge grant awards" were at stake. A press release from 1999 -- announcing a $1 billion taxpayer-funded giveaway -- epitomized the era."
The debate in America has become insipid enough that I tune it out. It is refreshing to hear intelligent voices like those of Doug Ross.
Clinton's and Democrats' Responsibility for Sub-Prime Crisis
Merv of PrairiePundit links to an excellent post by Hans Bader of Openmarket.org (h/t Larwyn) who in turn quotes Washington Examiner and Village Voice articles that attribute the subprime crisis to regulatory pressure on Fannie Mae and other government-created entities to make excessive loans to low-income borrowers. The video I just posted (h/t Larwyn) provides visual evidence of one facet of this saga. It is outrageous that, given the grounding of the sub-prime crisis in government intervention and Democratic Party politics, Barack Obama and the media that supports him is willing to claim that free markets and the Republicans are to blame. Have they no shame?
The Examiner writes:
"Barack Obama held the Bush administration responsible yesterday for what he calls “the most serious financial crisis since the Great Depression.” Obama is hopelessly wrong on the facts. One need look no further than The Washington Examiner and The Washington Post to see that the roots of this crisis sprouted during the Clinton administration’s politically motivated effort in the 1990s to use Fannie Mae and Freddie Mac to expand home ownership. Fannie and Freddie are Government-Sponsored Entities (GSEs) that dominate the U.S. mortgage market...In an oped article published on these pages last February, former Wall Streeter Robert Cox noted that “in response to political pressure at the time, the GSEs took steps to make homeownership more affordable for lower-income Americans and those with a poor credit history.”
Bader adds:
"The current mortgage crisis came about in large part because of Clinton-era government pressure on lenders to make risky loans in order to 'make home ownership more affordable for lower-income Americans and those with a poor credit history,' the DC Examiner notes today."
The Voice argues that Andrew Cuomo, HUD's director under Clinton, was directly responsible for today's meltdown:
"Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why.
"What he did is important—not just because of what it tells us about how we got in this hole, but because of what it says about New York's attorney general, who has been trying for months to don a white hat in the subprime scandal, pursuing cases against banks, appraisers, brokers, rating agencies, and multitrillion-dollar, quasi-public Fannie and Freddie."
Merv concludes:
"This election can be turned into a landslide for McCain if he focuses on Democrat corruption which caused this debacle. There is no need for Republicans to be defensive about this. The Bush administration, contrary to the statements of Pelosi and others, tried to do something about the corruption at Fannie Mae and Freddy Mac and was thwarted by Chris Dodd and the Democrats who were on the receiving end of contributions from those responsible for the problem. The second largest beneficiary was Barack Obama. The ad that needs to be out there almost writes itself and if McCain doesn't produce it some independent group should be doing it today."
The Examiner writes:
"Barack Obama held the Bush administration responsible yesterday for what he calls “the most serious financial crisis since the Great Depression.” Obama is hopelessly wrong on the facts. One need look no further than The Washington Examiner and The Washington Post to see that the roots of this crisis sprouted during the Clinton administration’s politically motivated effort in the 1990s to use Fannie Mae and Freddie Mac to expand home ownership. Fannie and Freddie are Government-Sponsored Entities (GSEs) that dominate the U.S. mortgage market...In an oped article published on these pages last February, former Wall Streeter Robert Cox noted that “in response to political pressure at the time, the GSEs took steps to make homeownership more affordable for lower-income Americans and those with a poor credit history.”
Bader adds:
"The current mortgage crisis came about in large part because of Clinton-era government pressure on lenders to make risky loans in order to 'make home ownership more affordable for lower-income Americans and those with a poor credit history,' the DC Examiner notes today."
The Voice argues that Andrew Cuomo, HUD's director under Clinton, was directly responsible for today's meltdown:
"Andrew Cuomo, the youngest Housing and Urban Development secretary in history, made a series of decisions between 1997 and 2001 that gave birth to the country's current crisis. He took actions that—in combination with many other factors—helped plunge Fannie and Freddie into the subprime markets without putting in place the means to monitor their increasingly risky investments. He turned the Federal Housing Administration mortgage program into a sweetheart lender with sky-high loan ceilings and no money down, and he legalized what a federal judge has branded "kickbacks" to brokers that have fueled the sale of overpriced and unsupportable loans. Three to four million families are now facing foreclosure, and Cuomo is one of the reasons why.
"What he did is important—not just because of what it tells us about how we got in this hole, but because of what it says about New York's attorney general, who has been trying for months to don a white hat in the subprime scandal, pursuing cases against banks, appraisers, brokers, rating agencies, and multitrillion-dollar, quasi-public Fannie and Freddie."
Merv concludes:
"This election can be turned into a landslide for McCain if he focuses on Democrat corruption which caused this debacle. There is no need for Republicans to be defensive about this. The Bush administration, contrary to the statements of Pelosi and others, tried to do something about the corruption at Fannie Mae and Freddy Mac and was thwarted by Chris Dodd and the Democrats who were on the receiving end of contributions from those responsible for the problem. The second largest beneficiary was Barack Obama. The ad that needs to be out there almost writes itself and if McCain doesn't produce it some independent group should be doing it today."
Thursday, March 27, 2008
Schnorrers' Day on Wall Street
"Hooray for Chair Bernanke
The economic explorer
'Did someone call him 'schnorrer''?
...
This fact I emphasize with stress,
I never print a dollar unless - Somebody's buying.
---Groucho Marx (Ben Bernanke), Animal Crackers
Groucho Marx was, of course singing about himself, Captain Spaulding, in Animal Crackers, but with a small modification or two the lines sing of Ben Bernanke. In case your Yiddish is rusty, "schnorrer" means beggar or sponger, according to Wikipedia. Is it fair that John Q. Public is subsidizing multi-million dollar Wall Street salaries for guys who can't figure out how to run a business?
Please review the entire song:
(All on Wall Street)
At last we are to meet him,
The famous Ben Bernanke.
From climates hot and cranky,
The Chairman has arrived.
Most heartily we'll greet him,
With plain and fancy cheering.
Until he's hard of hearing.
The Chairman has arrived.
At last - The Chairman has arrived.
(Butler)
Mr. Horatio W. Jamison, Field Secretary to Chair Bernanke.
(Jamison/Zeppo)
I represent the Chairman who insists on my informing you of these conditions under which he camps here. In one thing he is very strict, he wants his women young and picked and as for Wall Street bankers, he won't have any tramps here.
(All on Wall Street)
As for bankers he won't have any tramps here,
There must be no tramps.
(Jamison/Zeppo)
The bankers must all be very old,
The women warm, the champagne cold.
It's under these conditions that he camps here.
(Voice off Screen)
I'm announcing Chairman Ben Bernanke
(All on Wall Street)
He's announcing Ben Bernanke
Oh dear, he is coming,
At last he's here.
(Chair Bernanke)
Hello, I must be going,
I cannot stay, I came to say, I must be printing.
I'm glad I came, but just the same I must be going.
La La.
(Mrs. Rittenhouse/Margaret Dumont)
For my sake you must stay.
If you should go away,
You'd spoil this party I am throwing.
(Chair Bernanke)
I'll stay a week or two,
I'll stay the summer through,
But I am telling you,
I must be printing.
(All on Wall Street)
Before you print,
Will you oblige us,
And tell us of your deeds so glowing?
(Bernanke)
I'll print as much as you say,
In fact I'll even stay!
I'll print dollars far and away!
(All on Wall Street)
Good!
(Bernanke)
But I must be going.
I must be printing.
(Jamison/Zeppo)
There's something that I'd like to say,
That he's too modest to relay.
The Chairman is a moral man.
Sometimes he finds it trying
To be printing and printing.
(Bernanke)
This fact I emphasize with stress,
I never print a buck unless - Somebody's buying.
I never print a buck unless - Somebody's paying.
(All on Wall Street)
The Chairman is a very moral man.
(Jamison/Zeppo)
If he hears of a high interest rate, He'll naturally repel it.
(Bernanke)
I hate a high interest rate I do.
(All on Wall Street)
The Chairman is a very moral man.
Hooray for Chair Bernanke, The economic explorer.
(Chair Bernanke)
Did someone call me Shnorrer?
(All on Wall Street)
Hooray, Hooray, Hooray.
(Jamison/Zeppo)
He went onto Wall Street where all the bankers pocket bucks.
(Chair Bernanke)
If I stay here I'll go nuts.
(All on Wall Street)
Hooray, Hooray, Hooray.
He put all his reliance, In courage and defiance,
And risked his life for economic science.
(Chair Bernanke)
Hey, hey.
(Mrs. Rittenhouse/Margaret Dumont)
You are the only Chairman to print money over every acre.
(Chair Bernanke)
I think I'll try and make her.
(All on Wall Street)
Hooray, Hooray, Hooray.
He put all his reliance, In courage and defiance,
And risked his life for economic science.
(Chair Bernanke)
Hey, hey.
(All on Wall Street)
Hooray for Chair Bernanke, The economic explorer.
He brought his name undying fame
And that is why we say, Hooray, Hooray, Hooray.
(Chair Bernanke attempts to speak)
My friends, I am highly gratified at this magnificent display of effusion and I want
you to know.........
(All on Wall Street)
Hooray for Bernanke, The economic explorer.
He brought his name undying fame
And that is why we say, Hooray, Hooray, Hooray.
(Chair Bernanke)
My friends, I am highly gratified at this magnificent display of effusion and I want
you to know.........
Hooray for Ben Bernanke, Wall Street's hero.....
Well, somebody's got to do it!
Hooray, hooray, hooray.
The economic explorer
'Did someone call him 'schnorrer''?
...
This fact I emphasize with stress,
I never print a dollar unless - Somebody's buying.
---Groucho Marx (Ben Bernanke), Animal Crackers
Groucho Marx was, of course singing about himself, Captain Spaulding, in Animal Crackers, but with a small modification or two the lines sing of Ben Bernanke. In case your Yiddish is rusty, "schnorrer" means beggar or sponger, according to Wikipedia. Is it fair that John Q. Public is subsidizing multi-million dollar Wall Street salaries for guys who can't figure out how to run a business?
Please review the entire song:
(All on Wall Street)
At last we are to meet him,
The famous Ben Bernanke.
From climates hot and cranky,
The Chairman has arrived.
Most heartily we'll greet him,
With plain and fancy cheering.
Until he's hard of hearing.
The Chairman has arrived.
At last - The Chairman has arrived.
(Butler)
Mr. Horatio W. Jamison, Field Secretary to Chair Bernanke.
(Jamison/Zeppo)
I represent the Chairman who insists on my informing you of these conditions under which he camps here. In one thing he is very strict, he wants his women young and picked and as for Wall Street bankers, he won't have any tramps here.
(All on Wall Street)
As for bankers he won't have any tramps here,
There must be no tramps.
(Jamison/Zeppo)
The bankers must all be very old,
The women warm, the champagne cold.
It's under these conditions that he camps here.
(Voice off Screen)
I'm announcing Chairman Ben Bernanke
(All on Wall Street)
He's announcing Ben Bernanke
Oh dear, he is coming,
At last he's here.
(Chair Bernanke)
Hello, I must be going,
I cannot stay, I came to say, I must be printing.
I'm glad I came, but just the same I must be going.
La La.
(Mrs. Rittenhouse/Margaret Dumont)
For my sake you must stay.
If you should go away,
You'd spoil this party I am throwing.
(Chair Bernanke)
I'll stay a week or two,
I'll stay the summer through,
But I am telling you,
I must be printing.
(All on Wall Street)
Before you print,
Will you oblige us,
And tell us of your deeds so glowing?
(Bernanke)
I'll print as much as you say,
In fact I'll even stay!
I'll print dollars far and away!
(All on Wall Street)
Good!
(Bernanke)
But I must be going.
I must be printing.
(Jamison/Zeppo)
There's something that I'd like to say,
That he's too modest to relay.
The Chairman is a moral man.
Sometimes he finds it trying
To be printing and printing.
(Bernanke)
This fact I emphasize with stress,
I never print a buck unless - Somebody's buying.
I never print a buck unless - Somebody's paying.
(All on Wall Street)
The Chairman is a very moral man.
(Jamison/Zeppo)
If he hears of a high interest rate, He'll naturally repel it.
(Bernanke)
I hate a high interest rate I do.
(All on Wall Street)
The Chairman is a very moral man.
Hooray for Chair Bernanke, The economic explorer.
(Chair Bernanke)
Did someone call me Shnorrer?
(All on Wall Street)
Hooray, Hooray, Hooray.
(Jamison/Zeppo)
He went onto Wall Street where all the bankers pocket bucks.
(Chair Bernanke)
If I stay here I'll go nuts.
(All on Wall Street)
Hooray, Hooray, Hooray.
He put all his reliance, In courage and defiance,
And risked his life for economic science.
(Chair Bernanke)
Hey, hey.
(Mrs. Rittenhouse/Margaret Dumont)
You are the only Chairman to print money over every acre.
(Chair Bernanke)
I think I'll try and make her.
(All on Wall Street)
Hooray, Hooray, Hooray.
He put all his reliance, In courage and defiance,
And risked his life for economic science.
(Chair Bernanke)
Hey, hey.
(All on Wall Street)
Hooray for Chair Bernanke, The economic explorer.
He brought his name undying fame
And that is why we say, Hooray, Hooray, Hooray.
(Chair Bernanke attempts to speak)
My friends, I am highly gratified at this magnificent display of effusion and I want
you to know.........
(All on Wall Street)
Hooray for Bernanke, The economic explorer.
He brought his name undying fame
And that is why we say, Hooray, Hooray, Hooray.
(Chair Bernanke)
My friends, I am highly gratified at this magnificent display of effusion and I want
you to know.........
Hooray for Ben Bernanke, Wall Street's hero.....
Well, somebody's got to do it!
Hooray, hooray, hooray.
Subscribe to:
Posts (Atom)
