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Let’s Play a Game

In Blame Canada, Election 2008, Guest Posts, Neo-Capitalism, War and Politics on October 8, 2008 at 7:24 pm

Heya, Expat Texan here.  In light of VirgoMonkey’s taking exception to McCain trying to pin the current financial meltdown to the Democrats, I thought it might be fun to play a little game.  Everyone likes games, right?  Watch the following video, and make note of the party affiliations of those calling for increased regulations on Fannie and Freddie.  Contrast that with those (sometimes hysterically) railing against any further regulation of the 2 mortgage entities.  Then ask yourself – which of these 2 stances most likely contributed to the current subprime mortgage meltdown?

The truth.  She is a cruel, cruel mistress.

  1. What is your opinion on this?

    And the fact that McCain felt that our economy was “fundamentally strong” despite his knowledge of the Demolition Dem wreckage re: housing?

    According to factcheck.org……

    So who is to blame? There’s plenty of blame to go around, and it doesn’t fasten only on one party or even mainly on what Washington did or didn’t do. As The Economist magazine noted recently, the problem is one of “layered irresponsibility … with hard-working homeowners and billionaire villains each playing a role.” Here’s a partial list of those alleged to be at fault:

    * The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.

    * Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.

    * Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.

    * Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.

    * The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.

    * Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.

    * Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.

    * Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.

    * The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.

    * An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.

    * Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.

    The U.S. economy is enormously complicated. Screwing it up takes a great deal of cooperation. Claiming that a single piece of legislation was responsible for (or could have averted) the crisis is just political grandstanding. We have no advice to offer on how best to solve the financial crisis. But these sorts of partisan caricatures can only make the task more difficult.

    Reply
    virgomonkey 8 October 2008 at 7pm

  2. Oh, I think the portrayal of it as a complex, bi-partisan fuck-up is completely appropriate. I just find the Democrats attempts to blame “Bush’s economy” when they did everything possible to enable the subprime mess to be disingenuous at best.

    Reply
    Expat Texan 8 October 2008 at 9pm

  3. Most subprime lenders weren’t subject to federal lending law

    Did a 31-year-old law giving poor people a break at the bank accidentally break the bank?
    A lot of opinion leaders think so. From the editorial pages of The Wall Street Journal to talk shows to the op-ed page of The Register, people are charging that the Community Reinvestment Act of 1977 forced banks to make bad loans, leading to financial Armageddon.
    There’s just one problem: It isn’t true.

    See if you can manage to read that. Assuming you can read and comprehend.

    Then there’s this little gem about why Fannie & Freddie weren’t regulated:

    AP IMPACT: Mortgage firm arranged stealth campaign

    WASHINGTON – Freddie Mac secretly paid a Republican consulting firm $2 million to kill legislation that would have regulated and trimmed the mortgage finance giant and its sister company, Fannie Mae, three years before the government took control to prevent their collapse.

    In the cross hairs of the campaign carried out by DCI of Washington were Republican senators and a regulatory overhaul bill sponsored by Sen. Chuck Hagel, R-Neb. DCI’s chief executive is Doug Goodyear, whom John McCain’s campaign later hired to manage the GOP convention in September.

    Reply
    HillCountryGal 17 November 2008 at 12pm

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