The bureau slashed its criminal investigative work force to expand its national security role after the Sept. 11 attacks, shifting more than 1,800 agents, or nearly one-third of all agents in criminal programs, to terrorism and intelligence duties. Prosecutions of frauds against financial institutions dropped 48 percent from 2000 to 2007, insurance fraud cases plummeted 75 percent, and securities fraud cases dropped 17 percent.This is what less government can look like. So, mention this to your Ron Paul supporter friends, k? Without the help of FBI Whitecollar Investigators, the fraudsters are free to rampage.
More from the NYtimes:
During these years, the bureau asked for an increase of $800 million, but received only $50 million more. In the 2007 budget cycle, the F.B.I. obtained money for a total of one new agent for criminal investigations.Shockingly, the FBI clearly makes the case for the need to combat mortgage fraud in 2005, the height of the housing crisis:
In 2004, one senior F.B.I. official, Chris Swecker, warned publicly that a flood of fraudulent mortgage deals had the potential to become “an epidemic.”
Yet the next year, as public warnings about fraud in the subprime lending markets began to approach their height, the F.B.I. had the equivalent of only 15 full-time agents devoted to mortgage fraud out of a total of some 13,000 agents in the bureau.
That number has grown to 177 agents, who have opened 1,522 cases. But the staffing level is still hundreds of agents below the levels seen in the 1980s during the savings and loan crisis.
Financial Crimes Report to the Public 2005
The Bush Rubber Stamp Congress ignored the obvious and extremely detailed and well reported crime spree by the FBI.
This helps explain why many of the FBI and DOJ cases now being addressed are for crimes committed WHEN THE BUSH ADMINISTRATION and CONGRESS stripped the White Collar Crime divisions of money and manpower.
NOW THE PROSECUTIONS ARE BEGINNING TO ROLL OUT! Slowly. And the CEOs of the TBTFs appear to be teflon, but we can still hope.
http://www.dailykos.com/story/2012/06/22/1102296/-President-Obama-s-Financial-Fraud-Enforcement-Task-Force-STRIKES-AGAIN-200-Million-Fraud
Repetition is essential in spreading a humongous lie. Peter Wallison of the AEI was most responsible for the origin of the lie that Fannie and Freddie caused the 2007-2008 financial crises. Today, in The New York Times, Joe Nocera, a journalist of impeccable credentials and integrity, clearly and convincingly refutes Wallison, the Journal, and the lie.
ReplyDeleteNocera points out that contrary to what this editorial asserts, the SEC evidence does not show that Fannie and Freddie were big players in the subprime fiasco.
Fannie and Freddie had a marginal role in the crisis. The WSJ doesn't like to admit this, because it goes against their "Big government is bad" conservative narrative. It ignores that the crisis was global (housing bubbles were all over the developed world) and bubbles occurred in other asset classes besides housing. We know what really happened:
ReplyDelete1. By the end of 2007, the big 5 investment banks had $4 trillion in liabilities, were highly leveraged, and got much of their financing in overnight markets. Due to leverage in the 35:1 range, about a 3% decline in assets meant they were insolvent. Many mortgage-backed securities declined over 50% in value; many became worthless. During 2008, Bear collapsed in March and was bought-out, Lehman collapsed and was allowed to go away in September, Merrill Lynch was bought out, and Goldman and Morgan-Stanley would also have gone under if not given depository banking charters and lifelines from the Fed.
2. From 2000 to 2007, the global pool of fixed income securities increased from around $35 trillion to nearly $70 trillion. This "Giant Pool of Money" (see award-winning NPR article of same name) overwhelmed the policy and regulatory controls in country after country, generating bubble after bubble all over the world (not just in the U.S. - a major blow to the "F&F did it" narrative). The bubbles were created in housing when Wall St. figured out how to connect this pool to the global housing markets, via mortgage-backed securities (MBS) and collateralized debt obligations (CDO), which are pools of MBS and other debt securities. Think of a fire hose (the money) being connected to a balloon (the housing market) and you get the idea.
3. An uncontrolled (and still uncontrolled) derivatives market meant that multiple bets could be made on the same housing securities. Michael Lewis called this the "Doomsday Machine" in his book "The Big Short." Eventually, we even ran out of high-risk borrowers to make real loans to, so Wall St. invented synthetic CDO's, which meant that folks could bet on mortgage securities without even new mortgage originations; bet after bet was stacked on the same mortgage securities as hedge funds bet big against housing. This meant that no one knew the true state of who owed what to whom at any given point across the system; we have yet to address this.
4. AIG was the primary entity that took the long side of the housing bet, meaning it had to pay huge sums to banks if mortgage-backed securities (MBS) or CDO's (pools of MBS) defaulted. These bets are called "credit default swaps" or CDS. Rather than let the banks take these losses, U.S. taxpayers have paid over $150 billion to the banks (much of which went to international banks) to cover AIG's bets, when AIG of course went under as well in 2008.
5. Don't conflate Alt-A with subprime. Alt-A means low documentation, not necessarily low credit. The delinquency histories are very different.
6. Across the entire mortgage market, subprime loans increased from 8% or less of mortgage originations 2003 and prior to nearly 20% from 2004-2006, then dropped back below 8%. Delinquency rates on Fannie & Freddie's mortgages remain far below the private market's for the critical year vintages, 2004-2006, when credit standards went out the window.
Not coincidentally, the SEC relaxed the net capital rule on the big 5 investment banks in April 2004.
The historical "originate and hold" mortgage model was replaced with the "originate and distribute" model. Incentives were such that you could get paid just to originate and sell the mortgages down the pipeline, passing the risk along. The big investment banks simply connected the investors to the originators, helped by the AAA ratings. Take the AAA away and this doesn't happen.
ReplyDeleteThe historical "originate and hold" mortgage model was replaced with the "originate and distribute" model. Incentives were such that you could get paid just to originate and sell the mortgages down the pipeline, passing the risk along. The big investment banks simply connected the investors to the originators, helped by the AAA ratings. Take the AAA away and this doesn't happen.
DeleteNobody forced the big five investment banks to do what they did; they were not subject to CRA or other regulations common to depository banks. In fact, they mainly bought and sold loans rather than originate them. They did it because they thought they would make money. Big government is not always behind bubbles historically; they happen because people get caught up in herd thinking.
ReplyDeleteAllowing investment banks to be too big to fail was the main regulatory failure in this crisis.
FF were bit-players in subprime, getting in late to the game as they lost so much market share to the private lenders who had long-ago forged bravely into the subprime space.
ReplyDeleteAnd I note, nothing on comparative default rates. Surprise surprise.
So if FF were buying such awful loans and forcing the poor innocent wall street banks to write awful loans, then how come their default rates were so much lower than the private lenders? Explain that "real-world" fact why don't you?
And how come some banks with sensible risk controls (Goldman and JP) managed to suffer far fewer losses than others (Citi and BofA)? Were they not subject to the same pressures? Or could it be that that "real-world" fact proves that the main cause of the financial blow-up were the appaling management decisions taken by many private sector wall street firms, and not all the fault of the evil FF?
One more real-world fact for you to explain; if the loans the banks were making were conforming and thus guaranteed by FF, the private sector banks would not have lost any money on them. That's what a guarantee means. What blew up the finance firms were the risky, subprime loans they made which FF wouldn't guarantee. That right there proves that FF were marginal players in the subprime bubble, even if you ignore all the other facts.
DeleteF&F bought some loans very late in the day, they did not drive the bubble which was a private sector affair (non-Wall street lenders physically wrote the loans, but only to feed Wall Street's thirst for mortgages to securitise, you wouldn't have had the former without the latter).
ReplyDeleteThe only stat which actually tells you about the quality of the loans that F&F guaranteed or bought is their default rates compared to the private sector lenders. And they were a fraction.
F&F did not cause the bubble that destroyed our financial sector - the private sector did.
What does that have to do with whether they were drivers of the subprime bubble?
DeleteThe whole crux of the rightist argument that government caused the economic collapse, is that F&F were big players in the subprime bubble that destroyed the financial sector and the economy.
ReplyDeleteIt most certainly is not irrelevant, therefore, whether F&F were actually significant drivers of the subprime mortgage lending bubble which blew up the banks, causing an enomrous contraction of credit and hence nominal GDP. The facts say they were not.
Just because they lost lots of money due to the economic collapse does not mean they caused it, any more than the other victims of economic collapse caused it.
ry looking at actual default rates rather than WSJ garbage. Trying to equate F&F "risky" loans and actual "subprime" loans is classic bait-and-switch - they are nothing like each other in terms of actual realised defaults.
ReplyDeleteF&F lost most of their money on standard, conforming loans due to the economic collapse. F&F's involvment in the subprime sector that blew up the financial sector and killed the economy was insignificant compared to the private sector's.
George W. Bush was a major proponent of the kind of mortgages that banks had started making under the CRA. He urged low-to-no doc mortgages and the elimination of downpayments, just like the CRA regulators had long done. “We certainly don't want there to be a fine print preventing people from owning their home,” the President said in a 2002 speech. “We can change the print, and we've got to.”
ReplyDeleteYou should know the bulk of subprime mortgages were made during 2004-2006, when FnF had the lowest market share of issuances of MBSs.
ReplyDeleteTherefore the big banks were packaging these subprime mortgages and selling to investors with fraudulent information.
Given CEOs' proclivity for government bashing, any lenders being driven to write bad loans by the CRA would have been on CNBC screaming at the top of their lungs.
ReplyDeleteBut that dog that didn't bark.
CRA had little to do with the Subprime Crisis. Maybe less than 6% of all foreclosures since 2006.
ReplyDeletethere are still thinking people who believe that Fannie and Freddie were a significant causal factor in the global financial crisis.
ReplyDeleteRecall December 2008: the economy was sinking fast, shedding jobs at a rapid rate, and government bailouts were front and center. One would have thought that the collapse of Big Finance would have put the spade to notions of self-regulating financial markets. So the vested interests needed a simple story that could be widely repeated: Fannie and Freddie caused the crisis.
DeleteOf course, it would be easy to say that only low-information observers would believe this, and that "thinking people" would know better. I think by and large "thinking people" do know better, and that they are repeating the F & F story as a way to prevent re-regulation of Big Finance. It is propaganda masquerading as analysis.
The F & F story works as a way for politicians to water down reforms like Dodd-Frank. It keeps red state voters focused on the government as the cause of the problem, and the GOP as "protectors" of the "free market." It enables the fiscal kabuki that endangers Social Security, Medicare and Medicaid. Think about it: in the Great Depression, most people knew that Wall Street was to blame. Now, when you talk to many people, all they know is that Fox News said Fannie & Freddie did it, and they had some high-toned academic on to point the fingers at the government.
Big Lie is, blaming someone else. Then you activate your PR groups, starting with Fox and the RW think tanks. Then you go further and have the Wallisons of the world throw pure bs into the mix. Stir frequently.
ReplyDeleteThe same exact thing happened at the exact same time in the sub prime auto finance business. And it was done by the same exact people. Difference is that there are buybacks in auto finance ABSs much stricter than in the mortgage industry.
ReplyDeleteThe big players all went down. HSBC lost billions and went out of the business. Americredit all but went bankrupt and only survived with a buyout. Cap One went through the basement and was only kept alive because of their credit card profits. Dozens of others, some backed by huge corps, went under.
Needless to say, there was no CRA for auto finance, and there was no government car ownership policies for them to blame.
All by themselves, the investment banks created systemic risk, and that risk ruined them in the auto finance market.
Sadly, the same thing did not happen in the mortgage market.
You don't need a model to know that loans that ignore DTI and LTV are more risky than loans that do not ignore DTI and LTV. The "trick" of the financial crisis was getting AAA ratings for MBSs that ignored DTI and LTV. Investment banks did that by mixing up a bunch of loans and paying off the rating companies.
ReplyDeleteI have been looking for almost a decade now for government policies that forced the banks to do so, but strangely enough I have not been able to find any.
ReplyDeleteFederal Reserve Paper (San Francisco) on California
long paper: http://www.frbsf.org/publications/community/wpapers/2008/wp08-05.pdf
short paper:
http://www.frbsf.org/publications/community/cra/cra_lending_during_subprime_meltdown.pdf
"... we believe that this research should help to quell if not fully lay to rest the arguments that the CRA caused the current subprime lending boom by requiring banks to lend irresponsibly in low- and moderate-income areas. First, the data show that overall,
lending to low- and moderate-income communities comprised only a small share of total lending by CRA lenders, even during the height of subprime lending in California.
Second, we find loans originated by lenders regulated
under the CRA in general were significantly less likely
to be in foreclosure than those originated by IMCs (Independent Mortgage Companies). This held true even after controlling for a wide variety of borrower and loan characteristics, including credit score, income, and whether or not the loan was higher priced."
Conservatives Hindered by Ownership-Society Ideal
ReplyDeleteU.S. conservatives continue a healthy debate over how they can reconnect with voters and channel their ideals and goals into policies relevant for the 21st century. But a specter haunts these conversations -- a ghost called the ownership society.
This ghost subtly frames and guides all current approaches to conservative thinking, though its influence isn’t clearly articulated or noticed anymore. This is a problem, because until the conservative movement reflects and deals with its ideal of an ownership society, it is unlikely to advance.
The ownership society mantra of the President George W. Bush years is usually treated as a punch line, associated with Republican cheerleading of high homeownership numbers during the bubble or the push to privatize Social Security in 2005 that failed before it even got started. But the ownership society was the articulation of a deep part of conservative philosophy, built through articles and speeches, and laid out in Bush’s 2005 inaugural speech and State of the Union.
The ownership society rested on two claims. The first, most important part was that the government should shift the risks we face onto individuals and families. Not only is this the best way to deal with risks, but doing so is an essential part of freedom. The second part was to devolve organizations and responsibilities from the federal government to states and communities. As Bush said in his second inaugural address, these two actions together would make “every citizen an agent of his or her own destiny” while also giving “every American a stake in the promise and future of our country.”
Lasting Influence
DeleteEven though Bush and his agenda have disappeared from the main stage, the ownership society never went away and still influences conservative policy. Representative Paul Ryan’s plan is to turn everything that isn’t nailed to the floor into block grants. Yuval Levin of National Affairs argues that families (“which after all are not liberal institutions”) are the best agents of cost controls in health care. To the extent they exist, Republican approaches to health reform seek to reduce the share of medical-cost risk that is socialized.
While the numerous individualized programs and government activism of Bush-era “compassionate conservatism” seem to contrast with the “47 percent” meme of the Tea Party versus the looters, these are just two sides of the same coin. Or, perhaps, the good cop and bad cop of the ownership society. The good cop offers you a range of tax-free personal accounts to try and help you mitigate risk while he transforms public programs into private ones; the bad cop tries to stigmatize and dismantle what remains of government assistance.
That the ownership idea has survived as a driver of conservative policy making is important, because the vision of an ownership society hasn’t survived the current downturn well.
http://www.bloomberg.com/news/2013-02-27/conservatives-hindered-by-ownership-society-ideal.html?cmpid=hpbv
Most economists agree that how you view deficits in "normal times" is much different than how you approach them in deep recessions. Bernanke was making exactly that point in his testimony.
ReplyDeleteNow you can disagree and say the approach should not vary based on current macroeconomic conditions, but that would just be your opinion that is shared by some, but not most, economists.
There was no requirement in the Community Reinvestment Act that required banks to lend to marginal borrowers, just encouragement to try to lend to weaker borrowers in areas where the banks opened branches.
ReplyDeleteFurther, most all sub-prime loans were not done by banks. They were done by “non-bank” lenders which were not covered by the CRA.
The common factor is an explosion in “funny” mortgage products and low interest loans, that had no connection to the actual risk of the loan. This allowed people to purchase more house than ever before, and drove a bubble. The reason you could detach the risk from availability of loans was that they found a way to hide the actual risk from the end purchasers of the loans. Furthermore, they found a way to insulate the people who could and should have known about the risks, from the consequences of the risk (yet those people still harvested the upside with little or no exposure to the downside). In most cases it was an adoption of the failed ideology of “markets can take care of themselves” that allowed these absurd situations to develop without regulators or politicians stopping them.
Government has encouraged home ownership for decades; why suddenly in 2002-07 was it so important?
ReplyDeleteHow does “Real estate fever” spread from Las Vegas & S. Florida to the rest of the world? Isn't all RE local?
DeleteHow can we explain the boom in commercial RE?
Out of Control Financial Innovation
ReplyDeleteBy now the litany is familiar: the old model of banking, in which banks held on to the loans they made, was replaced by the new practice of originate-and-distribute. Mortgage originators—which in many cases had no traditional banking business—made loans to buy houses, then quickly sold those loans off to other firms. These firms then repackaged those loans by pooling them, then selling shares of these pools of securities; and rating agencies were willing to label the resulting product chicken—that is, to bestow their seal of approval, the AAA rating, on the more senior of these securities, those that had first claim on interest and principal repayment.
Everyone ignored both the risks posed by a general housing bust and the degradation of underwriting standards as the bubble inflated (that ignorance was no doubt assisted by the huge amounts of money being made). When the bust came, much of that AAA paper turned out to be worth just pennies on the dollar.
http://www.nybooks.com/articles/archives/2010/sep/30/slump-goes-why/?page=1
Keynesian should be used to mean counter-cyclical fiscal policy.
ReplyDeleteECB deals w/ monetary policy. People are waiting to see the ECB do what Friedman encouraged the Japanese central bank to do in the 90s…PRINT MONEY! Friedman/monetarists! Many neo-Keynesians also think that is the correct policy for the ECB.
Fiscal policy is distinct from monetary policy! Keynes know for fiscal..Friedman for monetary.
Try to read this: ‘Keynes on monetary policy,1910-1946″ by D.E Moggridge and Susan Howson, Oxford Economic Papers. I don’t know if you could find it online, I didn’t search for it.
DeleteWhen the Boogeyman goes to sleep every night, he checks his closet for Barney Frank.
ReplyDeleteCRA helped the poor and minorities qualify (not the “poorly qualified”) for and receive credit at better than the sub-prime rates they were typically offered if they provided documentation they could make the payments.
ReplyDeletePrivate lenders not governed by CRA made loans that required no documentation of ability to pay, the so called NINJA loans, but no lender governed by CRA could do that nor is there any evidence they did; e.g., mortgage-backed securities with a higher percentage of CRA loans in them had lower default rates than average.
To give you an idea of how many companies popped up in the 2000s, see how many went bust during the crash: I use the Mortgage Lender Implode-O-Meter
ReplyDeletehttp://ml-implode.com/
One would think that understanding that loans made by CRA banks in CRA areas reached their height in 1994 and steadily decreased right through the bubble would convince even the most stubborn ideologue to look elsewhere.
ReplyDeletehttp://www.jchs.harvard.edu/publications/governmentprograms/n08-2_park.pdf
But like the 40% loss of market share of the GSEs during the bubble, the almost equal market share loss of CRA banks means nothing. Instead, we have to listen to people talking about a bubble caused by banks that were losing business, and in the case of CRA banks, steadily losing business over a ten year period.
In my opinion there are only two ways to deal with Cognitive Dissidents; Prozac or a baseball bat. One they have to administer themselves, one I would be happy to administer(particularly to the CRA DID IT! group).
Literally and figuratively, “junk AAA-rated paper” spawned synthetic junk AAA-rated paper.
ReplyDeleteNothing tops payouts realized from winning bets on impending default of AAA-rated junk you bundled together and sold to clients.
How did Europe and Asia and Canada all have a simultaneous housing boom as big if not bigger than that of the US?
ReplyDeleteIsn’t the common thread the explosion of the shadow banking system?
DeleteIsn’t that why the UK had the biggest bubble of them all (since the UK was the hub of the European shadow banking world; the wealth of financiers created the property bubble in London)? The banks levered up on everything they could: Irish, Portuguese and Spanish property, sovereign debt, currency swaps (right Greece?), CDO’s, SIV’s etc?
I don’t think we had a credit bubble even, I think we had a banking bubble and like any parasitic system it undermined the health of the host.
When the great recession first hit Europe, I can remember European leaders blaming their economic problems on the mortgage excesses in the United States.
ReplyDeleteThey would have been happy to blame their problems on Barney Frank, Fannie and Freddy. It’s better than admitting that you got caught up in the same bubble.
My simple retort to this GSEs-and-Congrees-did-it claim, which unbelievably I hardly ever see used is:
ReplyDelete“Then what caused the housing bubble in Ireland? Fannie Mae caused that? Liberal U.S. Congressional reps? What about the housing bubble in Spain? Or the current one in China? Or England?”
Actually… it’s 20% down according to this article…
ReplyDeletebut… the scoop as to why Germany didn’t have the crash is because there are rules. And there were steep taxes to discourage and prevent flipping houses as well…
http://www.guardian.co.uk/money/2011/mar/19/brits-buy-germans-rent
Change in Government Consumption and Investment
ReplyDeletehttp://www.ritholtz.com/blog/2013/02/change-in-government-consumption-and-investment/
Cancel the sequester by substituting a combination of spending cuts and tax increases. Obama has proposed more spending cuts ($930 billion) than tax increases ($680 billion), and that's before you add to the spending cuts $200 billion in foregone interest payments.
ReplyDelete2. The tax cuts proposed by the president would not be a rate increase, but rather a limit on tax deductions to 28 percent of income for high earners. Obama has advocated this change since 2009.
3. In addition, the president proposes to close various tax loopholes, as yet unspecified, to reach $580 billion.
4. The remaining $100 billion in revenue would come from applying to income-tax-bracket thresholds (which rise with inflation) the same "chained" Consumer Price Index that Obama would use to lower Social Security payments.
The House counteroffer is … actually, there is no House counteroffer, unless you count a sequester-replacement bill the House passed last May that eliminates the sequester's defense cuts and replaces them with domestic cuts.
http://www.newrepublic.com/article/112567/john-boehner-doesnt-care-about-deficit-reduction#
The most striking and disconcerting thing about the latest round in the budget war is that the debate within the Republican Party is proceeding on the basis of completely false premises. I don’t mean false in the sense of wrongheaded policy beliefs. I mean Republicans are debating their strategy as if President Obama’s offer consists solely of making rich people pay more taxes. They won’t acknowledge his actual offer, which includes large cuts to retirement programs. I keep writing about this. It’s crazy.
ReplyDeletehttp://nymag.com/daily/intelligencer/2013/03/would-teaching-republicans-about-obama-help.html
Boehner and the House GOP/TP cannot understand that closing loop holes that allow billions in unpaid taxes to escape from the system is not a tax increase. However, they have absolutely no problem with burdening the middle class with making up the difference.
ReplyDeleteThe problem is personal agenda and what can be made an issue of versus cause and effect. The President and the democrats really can't be attacked based on anything they have done or eve haven't done. So the GOP is left with nothing but fabricated issues to attack on. GOP politics and GOP personal agenda are killing this countries economy. The social character of the country is fighting back and hopefully the destructive elements, the counter productive policies will be voted down to a non destructive, non counter productive voice size come 2014. After that we can see an economy in recovery. Until then we just have to wait while the GOP destroy themselves and hopefully the country won't get caught in the crossfire
ReplyDeletePretty boilerplate conservative, always blubbering excuses about how conservatives aren't responsible for the complete and utter failure of their policies
ReplyDeleteThe banks have known for 30 years the risks involved on the loan products they sold. This is why they lobbied so hard to allow them to sell the bad products to investors so they would not be holding the bad paper or the risks. The developed the products like stated income stated assets then bundled them to make it appear they were blended risks and then sold them to multiple investors. Who bought these high risk loans? Mostly pension funds and Insurances seeking higher returns who lost almost half of the pension funds value and the public that depended on those funds for retirement.
ReplyDeleteThere is more to the world than simply extracting all financial value from it!
ReplyDeleteLest We Forget: Why We Had A Financial Crisis
ReplyDeleteIt is clear to anyone who has studied the financial crisis of 2008 that the private sector’s drive for short-term profit was behind it. More than 84 percent of the sub-prime mortgages in 2006 were issued by private lending. These private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year. Out of the top 25 subprime lenders in 2006, only one was subject to the usual mortgage laws and regulations. The nonbank underwriters made more than 12 million subprime mortgages with a value of nearly $2 trillion. The lenders who made these were exempt from federal regulations.
http://www.forbes.com/sites/stevedenning/2011/11/22/5086/
ReplyDeleteWho Really Benefits From The Safety Net?
Black people, who make up 22% of the poor, receive 14% of government benefits. White people, who make up 42% of the poor, receive 69% of government benefits.
http://crooksandliars.com/susie-madrak/who-really-benefits-safety-net
ReplyDeleteHow George Bush and the Private Mortgage Market Created The Perfect Storm
MBS are packages of mortgages (sort of like mutual funds) that are bought and sold on in the stock market. They are mortgages bought from private companies and bundled into packages by huge trading firms (you know the ones we bailed out) and sold on the stock exchange.
In 1997 the GSEs owned about 12% of the total market share of these securities. In 2001 the GSEs owned about 15% of the total market share of these securities. In 2008 this percentage had grown dramatically to 40%.
In intervening years it was much more. President Bush directed his HUD director to pressure the GSEs into buying massive amounts these MBS on the open market. This created huge market for these securities and encouraged more and more risky private sector mortgages so they could be bought, bundled and sold on the open market largely to Fannie and Freddie.
As the Washington Post article states,
But by 2004, when HUD next revised the goals, Freddie and Fannie’s purchases of subprime-backed securities had risen tenfold. Foreclosure rates also were rising.
That year, President Bush’s HUD ratcheted up the main affordable-housing goal over the next four years, from 50 percent to 56 percent. John C. Weicher, then an assistant HUD secretary, said the institutions lagged behind even the private market and “must do more.”
For Wall Street, high profits could be made from securities backed by subprime loans. Fannie and Freddie targeted the least-risky loans. Still, their purchases provided more cash for a larger subprime market.
“That was a huge, huge mistake,” said Patricia McCoy, who teaches securities law at the University of Connecticut. “That just pumped more capital into a very unregulated market that has turned out to be a disaster.”[xvii]
How did the GSE’s accomplish this? As the article further states:
In 2003, the two bought $81 billion in subprime securities. In 2004, they purchased $175 billion — 44 percent of the market. In 2005, they bought $169 billion, or 33 percent. In 2006, they cut back to $90 billion, or 20 percent. Generally, Freddie purchased more than Fannie and relied more heavily on the securities to meet goals.
“The market knew we needed those loans,” said Sharon McHale, a spokeswoman for Freddie Mac. The higher goals “forced us to go into that market to serve the targeted populations that HUD wanted us to serve,” she said.
But because Fannie and Freddie were buying mortgage-backed securities rather than the actual subprime loans, their involvement came too late to require stiffer standards from lenders.
Fannie and Freddie “made no progress in civilizing the market,” said Sandra Fostek, a senior regulator at HUD.
William C. Apgar Jr., who was an assistant HUD secretary under Clinton, said he regrets allowing the companies to count subprime securities as affordable.
“It was a mistake,” he said. “In hindsight, I would have done it differently.”
Conclusion: Even though Fannie, Freddie and FHA had much less to do with new loans in the Bush administration they bought huge amounts of MBS in those years to meet President Bush’s 56% housing requirement.
Additionally, the President encouraged the GSEs to “focus” their “core housing mission” “with respect to low-income Americans and first-time homebuyers” in the following statement from the White House,
The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs’ commitment to low-income homebuyers.[xix]
Conclusion: President Bush had directed HUD to require the GSEs to meet the 56% low income housing requirement. This pressured the GSEs to buy massive MBS. This created a massive market for junk mortgages.
http://mixermuse.com/blog/2010/10/14/how-george-bush-and-the-private-mortgage-market-created-the-perfect-storm/
George Bush, proud parent of the mortgage crisis
ReplyDelete2004 nomination acceptance speech, Bush said:
Another priority for a new term is to build an ownership society, because ownership brings security and dignity and independence.
Thanks to our policies, home ownership in America is at an all- time high.
Tonight we set a new goal: 7 million more affordable homes in the next 10 years, so more American families will be able to open the door and say, "Welcome to my home."
That wasn't just verbiage, it was policy. Indeed, after the catastrophic job losses of his first term, expanding home ownership was the one bright spot Team Rove could point to in an otherwise dismal picture. Expanding home ownership by any means necessary was Bush administration policy until roughly Spring of 2008.
A White House Fact Sheet titled America's Ownership Society: Expanding Opportunities amplifies the point that risky mortgages were the implicit foundation of the administration's approach. It starts with a Bush quote:
"...if you own something, you have a vital stake in the future of our country. The more ownership there is in America, the more vitality there is in America, and the more people have a vital stake in the future of this country."
-President George W. Bush, June 17, 2004
The nauseating bromides come accompanied by actual policy meat.
In June 2002, President Bush issued America's Homeownership Challenge to the real estate and mortgage finance industries to encourage them to join the effort to close the gap that exists between the homeownership rates of minorities and non-minorities. The President also announced the goal of increasing the number of minority homeowners by at least 5.5 million families before the end of the decade
The National Homeownership Challenge referenced above might as well be a how-to manual for the mortgage crisis we're seeing right now, and also neatly derails the emerging talking point that the crisis stems from irresponsible minority buyers who just didn't know what they were doing (Emphasis in the original).
- Establish a national goal of at least 5.5 million new minority homeowners before the end of the decade.
- Challenge the private sector real estate and mortgage finance industries to dramatically increase their efforts to reduce the barriers to homeownership faced by minority families and to work with the nonprofit sector in a concerted effort to achieve this goal through national and local partnerships.
- Convene a White House Conference on Increasing Minority Homeownership, to highlight the homeownership barriers faced by minorities and develop proposed solutions.
There was in fact such a White House conference on October 15th, 2002.
http://www.dailykos.com/story/2008/09/23/607383/-George-Bush-proud-parent-of-the-mortgage-crisis
In 1998, regulators had allowed Citicorp, a commercial bank, to acquire Traveler’s Group, an insurance company that was partly involved in investment banking, to form Citigroup. That was seen as a signal that Glass-Steagall was a dead letter as a practical matter, and Gramm-Leach-Bliley made its repeal formal. But it had little to do with mortgages.
ReplyDeleteActually, deregulated banks were not the major culprits in the current debacle. Bank of America, Citigroup, Wells Fargo and J.P. Morgan Chase have weathered the financial crisis in reasonably good shape, while Bear Stearns collapsed and Lehman Brothers has entered bankruptcy, to name but two of the investment banks which had remained independent despite the repeal of Glass-Steagall.
Observers as diverse as former Clinton Treasury official and current Berkeley economist Brad DeLong and George Mason University’s Tyler Cowen, a libertarian, have praised Gramm-Leach-Bliley has having softened the crisis. The deregulation allowed Bank of America and J.P. Morgan Chase to acquire Merrill Lynch and Bear Stearns. And Goldman Sachs and Morgan Stanley have now converted themselves into unified banks to better ride out the storm
http://www.factcheck.org/2008/10/who-caused-the-economic-crisis/
But saying that Democrats killed the 2005 bill "while Mr. Obama was notably silent" oversimplifies things considerably. The bill made it out of committee in the Senate but was never brought up for consideration. At that time, Republicans had a majority in the Senate and controlled the agenda. Democrats never got the chance to vote against it or to mount a filibuster to block it.
DeleteBy the time McCain signed on to the legislation, it was too late to prevent the crisis anyway. McCain added his name on May 25, 2006, when the housing bubble had already nearly peaked.
The Facts: Deregulation=Republicans=Economic Crisis
ReplyDeleteMyths about the Mortgage Meltdown
Myth 1: Clinton caused the mortgage meltdown
Myth 2: Low income lending caused the mortgage meltdown
Myth 3: Bush did not contribute to the mortgage melt down
Myth 4: The private (free market) was not the cause of the mortgage meltdown
The increase of MBS (mortgage backed securities) purchased by the GSEs (Fannie and Freddie) from 2003 through 2006 under pressure from the Bush administration to meet their 56% affordable housing requirement started PRIVATE, market speculation – a 30 trillion dollar bubble worldwide on the PRIVATE, credit default swap derivatives markets – this was the cause of the housing bubble that burst into the subsequent economic crisis. Deregulation of the financial market allowed this bubble to occur. The private (free market) speculative derivative bubble caused the meltdown not the low income housing increase and subsequent loses. The low income housing loses in the Bush years resulted in tens of billions of dollars. The private market speculation for derivatives, 30 trillion dollars, is orders of magnitudes larger than the low income housing loses during the Bush years and is the only amount large enough to bring down the markets worldwide.
To understand how all this created the perfect storm see:
http://www.mixermuse.com/blog/2012/01/11/the-great-recession-how-the-free-market-got-rigged/
Even Alan Greenspan, a Republican, admitted in his interview with Brian Naylor:
BRIAN NAYLOR: The man once known as the maestro for his direction of the nation’s economy as Fed chairman sat for four long hours yesterday, watching lawmakers who once cheered his performances turn into harsh critics. Testifying before the House Oversight Committee, Greenspan didn’t down play the severity of the crisis in the nation’s markets.
Mr. ALAN GREENSPAN (Former Chairman, Federal Reserve): We are in the midst of a once-in-a-century credit tsunami. Central banks and governments are being required to take unprecedented measures.
NAYLOR: Under questioning from Democrats on the panel, Greenspan conceded he might have been, as he put it, partially wrong in not moving to regulate trading of some derivatives that are among the root causes of the credit crisis. He also admitted his free market ideology may be flawed. This exchange with committee chairman, Democrat Henry Waxman of California, verged on the metaphysical.
Representative HENRY WAXMAN (Committee Chairman, Democrat, 30th District of California): You found a flaw in the reality…
Mr. GREENSPAN: Flaw in the model that I perceived is a critical functioning structure that defines how the world works, so to speak.
Rep. WAXMAN: In other words, you found that your view of the world, your ideology was not right. It was not working.
Mr. GREENSPAN: How it – precisely. That’s precisely the reason I was shocked, because I’ve been going for 40 years or more with very considerable evidence that it was working exceptionally well.
http://www.npr.org/templates/story/story.php?storyId=96070766
In September 2002, Greenspan, Treasury Secretary Paul O’Neill, Securities and Exchange Commission chairman Harvey Pitt, and Commodity Futures Trading Commission chairman James Newsome wrote a letter to members of Congress to note their opposition to legislation that would regulate derivatives.
DeleteThey wrote:
“We believe that the [over-the-counter] derivatives markets in question have been a major contributor to our economy’s ability to respond to the stresses and challenges of the last two years. This proposal would limit this contribution, thereby increasing the vulnerability of our economy to potential future stresses….
We do not believe a public policy case exists to justify this governmental intervention. The OTC (over the counter) markets trade a wide variety of instruments. Many of these are idiosyncratic in nature….
While the derivatives markets may seem far removed from the interests and concerns of consumers, the efficiency gains that these markets have fostered are enormously important to consumers and to our economy.
Greenspan and the others urged Congress “to be aware of the potential unintended consequences” of legislation to regulate derivatives.
They got it exactly wrong. Swaps and derivatives ended up undermining, not bolstering, the economy.
http://www.motherjones.com/politics/2008/10/alan-shrugged
Certainly, a significant event that started the collapse happened during the last few years of the Clinton administration. The Gramm–Leach–Bliley Act of 1999, known as financial services deregulation,
Delete“It repealed part of the Glass-Steagall Act of 1933, opening up the market among banking companies, securities companies and insurance companies. The Glass-Steagall Act prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company.”
http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act
The bill was a compromise between the Clinton Administration and the House Republicans:
“The bill then moved to a joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November. On November 4, the final bill resolving the differences was passed by the Senate 90-8, and by the House 362-57. This legislation was signed into law by Democratic President William Jefferson “Bill” Clinton on November 12, 1999.”
http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act
“In 2003, the two [GSEs, Fannie and Freddie] bought $81 billion in subprime securities. In 2004, they purchased $175 billion — 44 percent of the market. In 2005, they bought $169 billion, or 33 percent. In 2006, they cut back to $90 billion, or 20 percent.
ReplyDeleteGenerally, Freddie purchased more than Fannie and relied more heavily on the securities to meet goals.
In 1997 the GSEs owned about 12% of the total market share of these securities. In 2001 the GSEs owned about 15% of the total market share of these securities. In 2008 this percentage had grown dramatically to 40%.
In intervening years it was much more.
President Bush directed his HUD director to pressure the GSEs into buying massive amounts these MBS [Mortgage Backed Securities] on the open market. This created huge market for these securities and encouraged more and more risky private sector mortgages so they could be bought, bundled and sold on the open market largely to Fannie and Freddie.
But by 2004, when HUD next revised the goals, Freddie and Fannie’s purchases of subprime-backed securities had risen tenfold.
Foreclosure rates also were rising.
That year, President Bush’s HUD ratcheted up the main affordable-housing goal over the next four years, from 50 percent to 56 percent. John C. Weicher, then an assistant HUD secretary, said the institutions lagged behind even the private market and “must do more.”
For Wall Street, high profits could be made from securities backed by subprime loans. Fannie and Freddie targeted the least-risky loans. Still, their purchases provided more cash for a larger subprime market.
“That was a huge, huge mistake,” said Patricia McCoy, who teaches securities law at the University of Connecticut. “That just pumped more capital into a very unregulated market that has turned out to be a disaster.”
“In 2003, the two bought $81 billion in subprime securities. In 2004, they purchased $175 billion — 44 percent of the market. In 2005, they bought $169 billion, or 33 percent. In 2006, they cut back to $90 billion, or 20 percent. Generally, Freddie purchased more than Fannie and relied more heavily on the securities to meet goals.
“The market knew we needed those loans,” said Sharon McHale, a spokeswoman for Freddie Mac.
The higher goals “forced us to go into that market to serve the targeted populations that HUD wanted us to serve,” she said.”
But because Fannie and Freddie were buying mortgage-backed securities rather than the actual subprime loans, their involvement came too late to require stiffer standards from lenders.
Fannie and Freddie “made no progress in civilizing the market,” said Sandra Fostek, a senior regulator at HUD.
William C. Apgar Jr., who was an assistant HUD secretary under Clinton, said he regrets allowing the companies to count subprime securities as affordable.
“It was a mistake,” he said. “In hindsight, I would have done it differently.”
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626.html
Conclusion: Even though Fannie, Freddie and FHA had much less to do with new loans in the Bush administration they bought huge amounts of MBS in those years to meet President Bush’s 56% housing requirement.
DeleteAdditionally, the President encouraged the GSEs to “focus” their “core housing mission” “with respect to low-income Americans and first-time homebuyers” in the following statement from the White House,
“The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs’ commitment to low-income homebuyers.”
http://georgewbush-whitehouse.archives.gov/omb/legislative/sap/109-1/hr1461sap-h.pdf
Conclusion: President Bush had directed HUD to require the GSEs to meet the 56% low income housing requirement. This pressured the GSEs to buy massive MBS. This created a massive market for junk mortgages.
Credit Default Swaps are insurance policies on mortgages, sort of like the futures market for commodities for MBS. Credit Default Swaps are not regulated. The government did not own credit default swaps. This was purely a private market commodity.
Between 2000 and 2008, the market for such swaps ballooned from $900 billion to more than $30 trillion.
http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_default_swaps/index.html?inline=nyt-classifier
This is what brought AIG down.
Goldman Sachs played both sides MBS and Credit Default Swaps.
When the Fannie and Freddie bought huge amounts of MBS, pressured by the Bush administration, the market for credit default swaps went astronomical. This is ultimately what broke them and resulted in tax payers having to bail them out.
http://money.cnn.com/magazines/fortune/fortune_archive/2005/01/24/8234040/index.htm
If you do not believe me what about Greenspan, Treasury Secretary Paul O’Neill, Securities and Exchange Commission chairman Harvey Pitt, and Commodity Futures Trading Commission chairman James Newsome (quoted above)?
Here are the numbers that show:
Delete1) the percent of subprime lending to total mortgage originations
2) the percent of Alt-A lending to total mortgage originations – An Alt-A mortgage, short for Alternative A-paper, is a type of U.S. mortgage that, for various reasons, is considered riskier than A-paper, or “prime”, and less risky than “subprime,” the riskiest category. Alt-A interest rates, which are determined by credit risk, therefore tend to be between those of prime and subprime home loans. Typically Alt-A mortgages are characterized by borrowers with less than full documentation, lower credit scores, higher loan-to-values, and more investment properties. A-minus is related to Alt-A, with some lenders categorizing them the same, but A-minus is traditionally defined as mortgage borrowers with a FICO score of below 680 while Alt-A is traditionally defined as loans lacking full documentation. Alt-A mortgages may have excellent credit but may not meet underwriting criteria for other reasons – http://en.wikipedia.org/wiki/Alt-A
3) GSE backed loans
http://www.mortgagebankers.org/files/News/InternalResource/57640_GAOReportInformationonRecentDefaultandForeclosureTrends.pdf
the percent of the total market of GSE and FHA, sub-prime loans (Col 1)
the default percentage of the total market (Col 2)
the amount in billions of the total market defaults (Col 3 )
Note: All currency amounts in billions
Year Col 1 Col 2 Col 3
1997 10% 0.9% $8
1999 13% 0.9% $12
2001 12% 0.7% $17
2003 11% 0.6% $21
2005 11% 1.5% $9
2007 13% 0.5% $28
Detail for Subprime Loans – see endnotes for sources (page 10 pdf)
http://www.aei.org/docLib/Pinto-High-LTV-Subprime-Alt-A.pdf
GSE Investment Portfolio and MBS ($ Billions, Left Axis)
GSE % of Total Outstanding Single Family Mortgages (Right Axis)
http://www.fcic.gov/hearings/pdfs/2010-0227-Jaffee.pdf
GAO report (page 18 for sub-prime data and page 21 for default rates data in pdf):
http://www.mortgagebankers.org/files/News/InternalResource/57640_GAOReportInformationonRecentDefaultandForeclosureTrends.pdf
http://www.aei.org/docLib/Pinto-High-LTV-Subprime-Alt-A.pdf (page 12 pdf)
This data clearly shows that:
The increase of low income, sub-prime loans and the low overall default rate of all loan originations (1.5% in 2005 was the highest tracked in this data, through 2007). This dispels that myth that the crisis was caused by loan defaults of low-income folks.
For more informations see – http://www.mixermuse.com/blog/2010/10/14/how-george-bush-and-the-private-mortgage-market-created-the-perfect-storm/
http://mixermuse.com/blog/2012/01/10/the-facts-how-the-republicans-created-our-current-economic-crisis/
Beware of the half truth. You may have gotten hold of the wrong half. — Unknown”
ReplyDeletehttp://www.tnr.com/blog/jonathan-chait/78845/which-party-loves-deficits
The next most important debate over the deficit occurred during the appearance of a budget surplus at the end of the Clinton administration.
Republicans argued that the surplus demonstrated the affordability of large permanent tax cuts. Clinton argued that a surplus at the height of a red-hot business cycle ought to be devoted to reducing the national debt.
Once Republican George W. Bush took office, Clinton's veto was gone, and Republicans immediately began dismantling the bulwarks of fiscal conservatism.
They ended the pay as you go budget rule, and passed a series of large tax cuts. They also passed a Medicare prescription drug benefit, also unpaid-for, and major military and homeland security spending increases.
Much of the criticism over the enactment of these policies, especially the 2001 tax cut, centered around the durability of the surplus, which Democrats called uncertain, and Republicans insisted was bound to continue growing.”
Keynes -- spend when in need - save when not in need.
What is wrong with that?”
All of CA's problems today are directly due to13 straight years of budget vetoes by the legislative minority. The Republicans have used that veto power to block all fiscal bills until they got almost $24B in tax breaks for the wealthiest. They have also used that veto to secure over $5B in annual bond service payments to Wall Street, forced CA to be the only state in the Union that doesn't charge an oil extraction fee ($6B per year lost) and changed the laws making it more advantageous for CA firms to relocate outside the state.
ReplyDeleteThe share of total income going to the top 0.1 percent hovered around 4 percent during the 1950s, 1960s and 1970s, then rose to 12 percent by the mid-2000s. During this period, the average tax rate paid by the 0.1 percent fell from more than 40 percent to below 25 percent.
ReplyDeleteThe study said that "as top tax rates are reduced, the share of income accruing to the top of the income distribution increases" and that "these relationships are statistically significant."
In other words, cutting taxes on the rich may not grow the economic pie. But the study found that those cuts can effect "how that economic pie is sliced."
Study: Tax Cuts for the Rich Don't Spur Growth
http://finance.yahoo.com/news/tax-cuts-rich-dont-spur-151649273.html
Bush's last budget had a 1.4 T dollar deficit...not 450 B.
ReplyDeleteBush's last fiscal year was 2009, and had a estimated budget deficit of 450 B THEN the stock market crash happened. The deficit balloon based on the fact that tax revenues dropped like a rock.
As Bruce Bartlett, conservative tax advisor to Ronald Reagan wrote.
Republicans assert that Barack Obama assumed sole responsibility for the budget on Jan. 20, 2009. From that date, all increases in the debt or deficit are his responsibility and no one else’s, they say
This is, of course, nonsense – and the American people know it. As I documented in a previous post, even today 43 percent of them hold George W. Bush responsible for the current budget deficit versus only 14 percent who blame Mr. Obama.
The American people are right; Mr. Bush is more responsible, as a new report from the Congressional Budget Office documents.
Bruce Bartlett: The Fiscal Legacy of George W. Bush
http://economix.blogs.nytimes.com/2012/06/12/the-fiscal-legacy-of-george-w-bush/
The estimated tax revenue for 2009 was 2.7T, the actual tax revenue was 2.1 T. Tarp accounts for some of it, but the majority of the budget deficit is due to the plummeting tax revenues during the crash.
DeleteWhen hostage taking became the preferred method of negotiating and the baggers want to push their god and guns on the country the GOP lost any last shred of respectability.
ReplyDeleteThe party that condemns the working poor as being a lazy bunch of uneducated people and in the same breath screams about student loans, useless degrees and that education for all as wasteful is unreasonable has lost any credibility.
the republican party has been taken over by fanatics, extremists, and the worst of the worst. I dont mean extremely nice or smart either I mean extremely stupid and hateful.
ReplyDeleteLiberals don't love Obama, liberals are angry at Obama, but we also don't like conservatives blaming everything on Obama when they are obstructing congress and when there is no reason to believe Republican candidates would act any better than Obama. Obama is a conservative, just not nearly as conservative as the Republicans have become in recent years.
ReplyDeleteIt doesn't bother me that the 1% are wealthy. I bothers me that every day more wealth is being accumulated by them at the expense of the middle class and the poor.
ReplyDeleteSam Walton's heirs get wealthier each year while the workers are still stuck at minimum wage. Even with inflation relatively low, workers wages have declined in real value for the last 15 years. Walmart's workers also qualify for food stamps, Medicaid, and rent subsidies. How is this anything but redistribution of wealth from the working classes to the rich?
Take the Walmart Walton family, all 6 of them multibillionaires who have more wealth between them then the entire 40% of the American people combined. By underpaying their employees and undercutting other businesses including large volume purchases and selling cheap Chinese goods, we the American people get stuck subsidizing those employees for food stamps and other gov't assistance, instead of paying a higher wage so they can have more money to spend into our economy, this money goes into the pockets of the billionaires who don't spend this money into the economy but hoard or invest offshore instead. Thus, the wealthy have everything they need and won't be able to buy all the things that millions of Americans can with that same money, thus we all pay a heavy price for this.
Republicans make terrible economists.
The word capitalism can no longer be used for what we now practice. Capitalism would require fair trade, fair adherence to real supply and demand, unmolested and illegally manipulated financial, investment and commodities markets..... What we have here is a Duck hunt and we are the ducks.......... And the one percent use magazines a lot bigger then 10 rounds
ReplyDeleteMore myth-making from your friendly financial/public relations sponsors: From the Chicago School of Economics to the lobbyists on K Street to mainstream media outlets and on to the halls of Congress. This is right on cue, though: the classic MO for quasi-banana republics and budding right-wing dictatorships. Never mind that we should be talking about the nationalization of oil, as speculation in gas has pushed prices up to $4 a gallon, or at least banking, as prescribed by law after its private market failure. Oh, no. Instead, privatization of the post office is in the offing. Privatization is great for all those who wish to gut unions, transfer revenue streams from government to private industry, increase costs to both taxpayers and consumers, and enrich corporations and financiers in the bargain. The examples of its failure and widespread abuse are numerous: In Bolivia, where water privatization cost citizens a full quarter of their annual income; Chile, under Pinochet, in several industries decimated by market imbalances and inequities; in California—short memories, here, I guess—anyone happen to remember how deregulation of utilities promised to increase competition and lower prices? What we got instead was market manipulation from Texas and the collapse of Enron; in the UK, with the hugely unpopular and subsequent failure of a partially privatized underground (The Tube). The list goes on and on.
ReplyDeletehttp://www.thetransportpolitic.com/2010/05/11/london-undergrounds-privatization-experiment-dead-as-remaining-ppp-is-bought-out/
Strong opposition by the Bush administration forced a top Republican congressman to delay a vote on a bill that would create a new regulator for mortgage giants Fannie Mae and Freddie Mac.
ReplyDeleteOxley pulls Fannie, Freddie bill under heat from Bush - MarketWatch
Despite what appeared to be a broad consensus on GSE regulatory reform, efforts quickly stalled. A legislative markup scheduled for October 8, 2003, in the House of Representatives was halted because the Bush administration withdrew its support for the bill,
Both Oxley and the administration support a proposal to remove regulatory oversight of the GSEs from the Department of Housing and Urban Development. Oxley's bill would maintain HUD's oversight of new products designed to encourage home ownership.
Assistant Treasury Secretary Wayne Abernathy, speaking before the Institute of International Bankers in New York, said the Treasury Department would not have enough power under Oxley's proposal.
"The marketplace would be impressed," Abernathy said. "But the players in the markets are too sophisticated to be misled by such leisure."
Reforms are being considered because of recent accounting problems at Freddie Mac . The mortgage company is expected to restate more than $4 billion in past earnings. The new regulator would also oversee Fannie Mae and the Federal Home Loan Banks.
The bill drafted by Oxley would limit the Treasury's role in new product regulation. The Treasury Department would be focused on overseeing financial safety and soundness. Everything else would fall under the watch of HUD.
Treasury Secretary John Snow suggested on Sept. 10 that HUD be given the power to set and enforce affordable housing goals for the two government-sponsored companies and the Treasury would have new authority to review and approve new products and activities.
Another problem with the committee plan, Abernathy said, was that moving regulatory functions under Treasury would reinforce the false impression that the government would make good any losses suffered by Fannie and Freddie.
While they have no federal guarantee against losses, Fannie and Freddie have federal charters that provide access to below-market borrowing. And the perception in the market is widespread that Fannie and Freddie would be bailed out by Washington.
Abernathy said the new regulator would have "a burden to demonstrate how it can overcome the view that the government will stand behind the obligations."
Bush forced Freddie and Fannie to purchase more low income home loans, 440 billion in MBSs and then reversed the Clinton rule that actually reigned in Freddie and Fannie
ReplyDeleteRegulating Housing GSEs:
ReplyDeleteThoughts on Institutional
Structure and Authorities
OFHEO is the safety-and-soundness regulator for
Fannie Mae and Freddie Mac and hence is authorized
to set risk-based capital standards, conduct exami-
nations, and take enforcement actions if unsafe or
unsound financial or management practices are iden-
tified. A director nominated by the president for a
five-year term and confirmed by the Senate leads
OFHEO
In testimony on October 16, 2003, before the
Senate Banking Committee, Secretary Snow (2003) reiterated his earlier suggested changes, clarified
the terms under which the Bush administration
would support moving housing GSE oversight to the
Treasury Department, and offered additional changes.
He noted that Treasury would accept responsibility
for the new safety-and-soundness agency if the agency had “adequate elements of policy account-
ability
reiterated his earlier suggested changes, clarified
the terms under which the Bush administration
would support moving housing GSE oversight to the
Treasury Department, and offered additional changes.
He noted that Treasury would accept responsibility
for the new safety-and-soundness agency if the agency had “adequate elements of policy accountability"
Despite what appeared to be a broad consensus
on GSE regulatory reform, efforts quickly stalled. A
legislative markup scheduled for October 8, 2003, in the House of Representatives was halted because the Bush administration withdrew its support for the
bill
STATEMENT OF ADMINISTRATION POLICY
ReplyDeleteThe Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs' commitment to low-income homebuyers.
George W. Bush: Statement of Administration Policy: H.R. 1461 - Federal Housing Finance Reform Act of 2005
Yes, he said he was against it because it "would lessen the housing GSEs' commitment to low-income homebuyers". And here's what the House Republican Mike Oxley, Chairman of the House Financial Services committee said
“Instead, the Ohio Republican who headed the House financial services committee until his retirement after mid-term elections last year, blames the mess on ideologues within the White House as well as Alan Greenspan, former chairman of the Federal Reserve.
The critics have forgotten that the House passed a GSE reform bill in 2005 that could well have prevented the current crisis, says Mr Oxley, now vice-chairman of Nasdaq.”
“What did we get from the White House? We got a one-finger salute.”
Oxley was Chairman of the House Financial Services committee and sponsor of the only reform bill to pass any chamber of the republican controlled congress
DeleteSo conservatives are for more regulation and Democrats are for less?
ReplyDeleteNot only did he take a blind eye but he actively rescinded State laws that would have prohibited the predatory lending by Commercial Banks. Bush was an ENABLER of bad loans in the bubble.
ReplyDeletehttp://www.washingtonpost.com/wp-dyn...021302783.html
ou simply cant wish away the fact that Bush was against any GSE regulation and Republican Leader Frist refused to allow a vote on it. Strange that you pretend not to know that.
ReplyDeleteBush talked about reform. He talked and he talked. And then he stopped reform. (read that as many times as necessary. Bush stopped reform). And then he stopped it again. A million quotes cant change that. And you just cant get over the quote where Bush told the dems Freddie and Fannie were perfectly fine
ReplyDeleteTestimony from W’s Treasury Secretary John Snow to the REPUBLICAN CONGRESS concerning the 'regulation’ of the GSE’s
ReplyDelete“
“
Mr. Frank: ...Are we in a crisis now with these entities?
Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.“
THE TREASURY DEPARTMENT'S VIEWS ON THE REGULATION OF GOVERNMENT SPONSORED ENTERPRISES
Deletehttp://www.gpo.gov/fdsys/pkg/CHRG-108hhrg92231/html/CHRG-108hhrg92231.htm
Q When did the Bush Mortgage Bubble start?
ReplyDeleteA The general timeframe is it started late 2004.
From Bush’s President’s Working Group on Financial Markets October 2008
“The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007.”
http://www.treasury.gov/resource-cen...s%20update.pdf
One president controlled the regulators that not only let banks stop checking income but cheered them on. And as president Bush could enact the very policies that caused the Bush Mortgage Bubble and he did. And his party controlled congress.
DeleteRhe Bush Mortgage Bubble wasn’t about home prices. It was about banks lowering their lending standards and Bush’s regulators cheering them on. That started late 2004 after Bush preempted all state laws against predatory lending (to name one of his many toxic housing policies) and his successful reelection campaign touting the strength of his housing market.
ReplyDeleteThe root cause of the crash has been addressed, the dates of the Bush Mortgage Bubble as given by Bush's working group, the fed and actual mortgage data coincided with a sharp increase in No Doc loans
ReplyDeleteTo create buyers out of unqualified buyers, banks literally stopped checking income in addition to using teaser rates and initial ARM rates to put people in homes they couldn't afford.
So every regulatory effort has been to make sure people have the ability to repay. Dodd Frank covers it. Numerous states have implemented similar policies. Here's the Fed's policy as it specifically relates to subprime loans.
FRB: Testimony--Braunstein, Mortgage lending reform--March 11, 2009
http://www.federalreserve.gov/newsevents/testimony/braunstein20090311a.htm
Bush's working group said it "was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007". Now what would 'trigger a dramatic weakening' and prevent Bush's regulators from enforcing them? Why Bush and his policies, that's who. This is his most toxic policy.
ReplyDeleteSubprime lending has grown rapidly over the past decade. Rising concerns about abusive practices by subprime lenders have been a byproduct of this growth. By early 2004, these concerns prompted Georgia and more than 30 other states to pass laws designed to eliminate abusive or predatory lending practices by the financial services firms, including those with federal charters, operating within their boundaries.
Acting on a request from a national bank, the OCC in 2003 concluded that federal law preempts the provisions of the Georgia Fair Lending Act (GFLA) that would otherwise affect national banks’ real estate lending. At this same time, the OCC also proposed a final rule to clarify the types of state laws that are applicable to national banks. In early 2004, the OCC adopted a final rule providing that state laws that regulate the terms of credit are preempted. The main features of state anti-predatory lending statutes are typically provisions that restrict or prohibit certain loan terms.
Now why would Bush do that besides the fact that banks told him to? that's easy, to increase subprime lending
In addition, clarification of the applicability of state laws to national banks should remove disincentives to subprime lending and increase the supply of credit to subprime borrowers.
http://www.occ.gov/publications/publ...0/wp2004-4.pdf
The same false narratives and cherry picked quotes that satisfy his need to believe its everybody's fault but Bush. But as I've proven, the Bush Mortgage Bubble started in late 2004 because of Bush's policies and regulation. I've dealt directly with false narratives. they avoid the facts I've posted.
ReplyDeleteBush forcing Freddie and Fannie to buy more low income home loans? He seems to be blaming the GSEs. And it seems like its pretty significant since the Bush Mortgage Bubble started late 2004
In April (2004), HUD proposed new federal regulations that would raise the GSEs targeted lending requirements. HUD estimates that over the next four years an additional one million low- and moderate-income families would be served as a result of the new goals.
HUD Archives: HUD DATA SHOWS FANNIE MAE AND FREDDIE MAC HAVE TRAILED THE INDUSTRY IN PROVIDING AFFORDABLE HOUSING IN 44 STATES
http://archives.hud.gov/news/2004/pr04-066.cfm
Lots of programs have always been in place to encourage home ownership, etc, but the absolutely insane stuff came when the banks basically gave up on lending standards.
ReplyDeleteThe Bush Mortgage Bubble started in late 2004. that was the same year bush implemented his toxic housing polcies
Testimony from Treasury Secretary John Snow to the REPUBLICAN CONGRESS concerning the 'regulation’ of the GSE’s
ReplyDeleteMr. Frank: ...Are we in a crisis now with these entities?
Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.
- THE TREASURY DEPARTMENT'S VIEWS ON THE REGULATION OF GOVERNMENT SPONSORED ENTERPRISES
Yep, he said "far from it" If you read the testimony, you'd see he reiterated that position. And then you'd see one of the reasons Snow said why they would like the regulation would be to better enforce the housing goals (you remember the goals bush raised over the objections of everybody, post #30). Lets see how those housing goals worked out for Fannie Mae
We have made significant adjustments to our mortgage loan sourcing and purchase strategies in an effort to meet the increased housing goals and subgoals. These strategies include entering into some purchase and securitization transactions with lower expected economic returns than our typical transactions. We have also relaxed some of our underwriting criteria to obtain goals-qualifying mortgage loans and increased our investments in higher-risk mortgage loan products that are more likely to serve the borrowers targeted by HUD’s goals and subgoals,
http://www.fanniemae.com/ir/pdf/annu...ual_report.pdf
HOLY COW! Bush forced them to lower their standards. If only somebody had warned us that Bush's policies would hurt Freddie and Fannie. Wait, somebody did.
Fannie, Freddie to Suffer Under New Rule, Frank Says
ReplyDeleteFannie Mae and Freddie Mac would suffer financially under a Bush administration requirement that they channel more mortgage financing to people with low incomes, said the senior Democrat on a congressional panel that sets regulations for the companies.
So if your narrative is "GSEs are to blame" then you have to blame bush
http://democrats.financialservices.house.gov/FinancialSvcsDemMedia/file/press/112/06-17-04-new-Fannie-goals-Bloomberg.pdf
But like all cons, you simply ignore the facts.
ReplyDeleteYou refuse to acknowledge not only the Bush quotes but the Bush policies. And you refuse to acknowledge that Bush told you the mortgage bubble started late 2004 because of lower lending standards.
ReplyDeleteAh the classic conservative “one more insult for the road” . You’re only trying to insult your way out of the mess you created clinging to your silly failed narrative. Post one thing I made up otherwise I will simply conclude you’re just another lying conservative who wants to cut and run from the facts.
ReplyDeleteLower lending standards started in late 2004 which caused the Bush Mortgage Bubble. Putting in people in homes they couldn't afford caused the default rate to start its dramatic increase in mid 2005. the increased defaults were so bad, the OCC started tracking people who defaulted on their first mortgage payments. this froze the credit markets in 2007. this caused the Great Bush Recession.
ReplyDeleteI don't have to ignore facts. I don't have to make up facts. I don't have to 'weave a tale'. I simply post the facts
Bush caused it. I proved it. I cant help but believe you have avoided the facts I posted that show it started on Bush's watch because of Bush's policies. Here, let's start with the basics.
ReplyDelete"Bush’s Working Group on Financial Markets October 2008
The Presidents Working Group’s March policy statement acknowledged that turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007. "
http://www.treasury.gov/resource-cen...s%20update.pdf
the regulators report to Bush and he encouraged, funded and protected lower lending standards.
"(In 2000) HUD restricted Freddie and Fannie, saying it would not credit them for loans they purchased that had abusively high costs or that were granted without regard to the borrower's ability to repay."
ReplyDeleteHow HUD Mortgage Policy Fed The Crisis
"In 2004, the 2000 rules were dropped and high‐risk loans were again counted toward affordable housing goals."
http://www.prmia.org/pdf/Case_Studie..._090911_v2.pdf
We want more people owning their own home in America," Bush said. His goal is to have 5.5 million minority homeowners in the country by the end of the decade.
ReplyDeleteMarch 26, 2004
Bush Ties Policy to Record Home Ownership
http://www.foxnews.com/story/2004/03/26/bush-ties-policy-to-record-home-ownership/
Mr. Frank: ...Are we in a crisis now with these entities?
Secretary Snow. No, that is a fair characterization, Congressman Frank, of our position. We are not putting this proposal before you because of some concern over some imminent danger to the financial system for housing; far from it.
“
- THE TREASURY DEPARTMENT'S VIEWS ON THE REGULATION OF GOVERNMENT SPONSORED ENTERPRISES
or this one
"Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs' commitment to low-income homebuyers. "
George W. Bush: Statement of Administration Policy: H.R. 1461 - Federal Housing Finance Reform Act of 2005
“By early 2004, these concerns prompted Georgia and more than 30 other states to pass laws designed to eliminate abusive or predatory lending practices by the financial services firms, including those with federal charters, operating within their boundaries.
ReplyDeleteActing on a request from a national bank, the OCC in 2003 concluded that federal law preempts the provisions of the Georgia Fair Lending Act (GFLA) that would otherwise affect national banks’ real estate lending.
……..
In addition, clarification of the applicability of state laws to national banks should remove disincentives to subprime lending and increase the supply of credit to subprime borrowers.”
http://www.occ.gov/publications/publ...0/wp2004-4.pdf
Republicans seeking to cut it also represent vast numbers of recipients.
ReplyDeleteAmong the 254 counties where food stamp recipients doubled between 2007 and 2011, Republican Mitt Romney won 213 of them in last year’s presidential election, according to U.S. Department of Agriculture data compiled by Bloomberg. Kentucky’s Owsley County, which backed Romney with 81 percent of its vote, has the largest proportion of food stamp recipients among those that he carried.
http://www.bloomberg.com/news/2013-08-14/food-stamp-cut-backed-by-republicans-with-voters-on-rolls.html
In 1980 the top 1% earned 8.5% of total income. In 2007 they earned 23%.
ReplyDeleteIn 1980 the bottom 90% earned 68% of total income. In 2007 they earned 53%.
http://taxfoundation.org/article/summary-latest-federal-income-tax-data-2012#table3
While prices keep rising:
ReplyDeletehttp://research.stlouisfed.org/fred2/series/CPILFENS
FRED« Consumer Price Index for All Urban Consumers: All Items Less Food & Energy
U.S. workers' share of national income is at an ALL-TIME low:
http://research.stlouisfed.org/fred2/series/PRS85006173
FRED« Nonfarm Business Sector: Labor Share
But corporate profits are increasing:
http://research.stlouisfed.org/fred2/series/CP
FRED« Corporate Profits After Tax
Mainly because of reduced wages and benefits:
"JPMorgan’s July 11, 2011, “Eye on the Market” newsletter put it, “Reductions in wages and benefits explain the majority of the net improvement in [profit] margins… US labor compensation is now at a 50-year low relative to both company sales and US GDP.”
Worker productivity has been increasing:
http://data.bls.gov/pdq/SurveyOutputServlet?request_action=wh&graph_name=PR_lprbrief
Graph: Quarterly productivity in the nonfarm business sector
I'm starting to believe that the chief qualification to be a Republican besides incompetence is the ability to mis-inform, distort, and out and out lie.
ReplyDeleteIraq was an illegal war of aggression... so said the UN Secretary General.
ReplyDeleteLibya was a UN-sanctioned, multi-nation operation... undertaken by NATO following a unanimous affirmative vote.
A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more; otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation. Adam Smith
ReplyDeleteIf you define the middle class as the top 50% minus the top 10%, then based on non-dependent tax forms filed in 2010 they earned $4.4 trillion and paid $270 billion in federal income tax or only 6.3%. The earnings range for this group was $34,000 to $116,000 - including joint forms.
ReplyDeleteA 20% across the board income tax reduction would:
a) Reduce total tax revenue received by $190 billion
b) Reduce revenue from the 1% by $72 billion
c) Reduce revenue from the other 9% of the top 10% by $63 billion
d) Reduce revenue from the bottom 90% by $55 billion or only $455 per filing
http://taxfoundation.org/article/summary-latest-federal-income-tax-data-2012#table1
How False History Props Up the Right
ReplyDeleteAugust 17, 2013
Exclusive: The Right’s policy nostrums are failing across the board – from free-market extremism to austerity as a cure for recession to continuing the old health-care dysfunction – leaving only an ideological faith that this is what the Framers wanted. But that right-wing “history” is just one more illusion, writes Robert Parry.
http://consortiumnews.com/2013/08/17/how-false-history-props-up-the-right/
The so called Conservatives are, and never have been anything they have ever claimed themselves to be.
ReplyDeleteTop 1 Percent Income Share in the United States, 1980-2010
ReplyDelete(Including capital gains) *
1915 ( 17.58)
1920 ( 14.83)
1928 ( 23.94) (High)
1932 ( 15.56)
1973 ( 9.16) (Low excluding capital gains)
1976 ( 8.86) (Low including capital gains)
1980 ( 10.02)
1981 ( 10.02) Reagan
1982 ( 10.80)
1983 ( 11.56)
1984 ( 11.99)
1985 ( 12.67)
1986 ( 15.92)
1987 ( 12.66)
1988 ( 15.49)
1989 ( 14.49) Bush
1990 ( 14.33)
1991 ( 13.36)
1992 ( 14.67)
1993 ( 14.24) Clinton
1994 ( 14.23)
1995 ( 15.23)
1996 ( 16.69)
1997 ( 18.02)
1998 ( 19.09)
1999 ( 20.04)
2000 ( 21.52)
2001 ( 18.22) Bush
2002 ( 16.86)
2003 ( 17.53)
2004 ( 19.75)
2005 ( 21.92)
2006 ( 22.82)
2007 ( 23.50)
2008 ( 20.95)
2009 ( 18.12) Obama
2010 ( 19.77)
* Top 1 percent or 780,835 families had market income above $352,055
Top 5-1% families had income between $150,400 and $352,055
Top 10-5% families had income between $108,024 and $150,400
-- Thomas Piketty and Emmanuel Saez
The financial collapse happened under Bush and his cronies, The Republicans have done nothing but sabotage ever since
ReplyDeletePolitics Most Blatant: Conservative Ideas Can’t Escape Blame for the Financial Crisis
ReplyDeleteThe onset of the recent financial crisis in late 2007 created an intellectual crisis for conservatives, who had been touting for decades the benefits of a hands-off approach to financial market regulation. As the crisis quickly spiraled out of control, it quickly became apparent that the massive credit bubble of the mid-2000s, followed by the inevitable bust that culminated with the financial markets freeze in the fall of 2008, occurred predominantly among those parts of the financial system that were least regulated, or where regulations existed but were largely unenforced.
Predictably, many conservatives sought to blame the bogeymen they always blamed.
http://www.ritholtz.com/blog/2011/02/politics-most-blatant-conservative-ideas-can%E2%80%99t-escape-blame-for-the-financial-crisis/
In particular this program under Bush resulted in the down payment qualifications for mortgages going from 10% of the mortgage value to $500 dollars.
ReplyDeleteUnder those reckless circumstances almost anyone short of a homeless bum living on the street could get approved for a mortgage of almost any size
the proof lies in Canada who's banking system didn't need to be bailed out because Canada's bank's kept the good regulation, and didn't go as far as America's or the majority of the rest of the world's bank's in the race for deregulation. Thus Canadian banks had very little exposure to the toxic assets, and are now amongst the strongest financially in the world
ReplyDeleteThe reason why there was 'toxic assets' and unprecedented mortgage defaults was because of policy introduced by Bush. Under this program people got mortgages who had no business getting them, and when their teaser rates ran out, housing prices fell, and their interest rates skyrocketed they went bankrupt leaving the banks with the now worthless loans on their balance sheet.
ReplyDeleteA sub-prime mortgage is just a mortgage with less than 20% down payment. That is the way it was before Henry Paulson allowed the Office of Thrift Supervision to permit the introduction of "Pick-a-Pay" mortgages by banks that were forced to go out of business because of bad business practices.
ReplyDeleteFed funds are reserves. Reserves never leave the banking system, they never get loaned outside of banks. That's why you've never seen one.
ReplyDeleteReserves get loaned from bank to bank.
That's why the massive influx of reserves into banks balance sheets have not caused massive inflation -- cuz they don't circulate. In this sense they're not money. They're better called currency.
And actually, in old economic text books reserves were called a tax. Why?
Because when banks hold Treasuries, they get interest income.
When they hold reserves, they didn't (though do now -- .25%). Thus QE might be more deflationary rather than inflationary for the economy as a whole.
Though because reserves are being used to buy junk bonds from banks, they get cleared of their toxic assets. Which obviously is a plus.
But.... reserves don't leave the banking system, and never get loaned out.
The United states spends more on corporate welfare than on food stamps and Housing for the needy. just in 2006 the united states spent 50Bill on Social Welfare, at the same time Cooperate welfare (in the form of subsidies) were 90Bill this is 50% more than social welfare. Here are the list of subsidies for corporations.
ReplyDeletecompanies paying no taxes and getting subsides: http://www.ctj.org/corporatetaxdodgers/CorporateTaxDodgersReport.pdf
Cooperate Vs Social Welfare: http://www.ctj.org/corporatetaxdodgers/CorporateTaxDodgersReport.pdf
Recent Increased in Cooperate Subsides: http://thinkprogress.org/climate/2011/11/13/366988/over-half-of-all-us-tax-subsidies-go-to-four-industries-guess-which-ones/
Children Starving in America: http://feedingamerica.org/hunger-in-america/hunger-facts/child-hunger-facts.aspx#
Ask GOP why they think Cooperate jet fuel is more important than american starving in the united states.
Follow the money. Farmers and Agribusiness got an increase in their welfare farm subsidy checks by the GOP Congress.
ReplyDeleteNo repeat of Bush Please—-CLINTON TO BUSH TO OBAMA
ReplyDeleteWho Dug the Deep Hole? Who Fumbled the ball?
Numbers rounded
Clinton left Bush an 1800B Budget
Bush Left Obama a 3500 Budget
Clinton left Bush a 240B Surplus as far as the eye can see
Bush left Obama a 1400B Deficit as far as the eye can see
Clinton left Bush 5,700B of Debt
Bush left Obama 11,800B of Debt
Clinton left Bush a 237,000 net new jobs created per month
Bush left Obama a 31,000 lowest number since Hoover.
Clinton left Bush 17 Million Manufacturing Jobs
Bush left Obama 11 Million Manufacturing Jobs
Clinton left Bush a 10,800 Dow
Bush left Obama an 8028 Dow
Clinton left Bush Peace on Earth Good Will From Most Men
Bush left Obama Hell on Earth Two disastrous wars. Enmity of 1500 Million Muslims
Clinton left Bush a President most highly rated of any peacetime President in Asia, Africa, Europe.
Bush left Obama the most hated President in history
Bush left Obama an Housing Tsunami and Financial Volcano
Bush left Obama, in 2008, an 8500B Bail out commitment Yes! 8500 not just 700
Bush left Obama his Takeover of Fannie/Freddie, AIG, and first bailout of Chrysler
Bush increased maximum loan by Fannie/Freddie from $153,000 in 2000 to $300,000 then to $729,000
That is how F&F got stuck with so many toxic mortgages. Bush gift to Big Bank pals.
Bush increased FDIC maximum deposit coverage from $100,000 to $250,000. Help the rich.
This is a WAR for the Standard of the Living Of The Middle Class
ReplyDeleteand survival from outsourcing its jobs.
Since 1980 wealth and income have been flushed to the top 10%
who now own 73% Net Wealth—83% Financial Wealth and get 46% of individual Income
13 republicans in congress get federal farm subsidies but voted to cut food stamps
ReplyDeletehttp://thenewcivilrightsmovement.com/is-your-congressman-one-of-the-13-who-get-federal-farm-subsidies-but-voted-to-cut-food-stamps/politics/2013/09/21/75493
If I 'make' a million dollars, I accumulated money from other people. I'm not actually producing cash, I'm acquiring theirs. Therefore, others have collectively lost a million dollars of purchasing power to me.
ReplyDeleteThese people can't go demand new money just because I have all of their money.
They go broke, I get rich, and income inequality is a thing.
United States life expectancy is 78.4 years, ranking it 50th among 221 nations. The US has the highest or near-highest prevalence of infant mortality, heart and lung disease, sexually transmitted infections, adolescent pregnancies, injuries, homicides, and disability.
ReplyDeleteThe US spends more on health care per capita ($8,608), and more on health care as percentage of its GDP (17.9%), than any other nation. The US is ranked last in the quality of health care among similar countries.
The U.S. Census Bureau reported that 49.9 million residents, 16.3% of the population, were uninsured in 2010. The US is among the few industrialized nations in the world that does not guarantee access to health care. With the exception of Mexico, Turkey, and the United States, all OECD countries had achieved universal or near-universal (at least 98.4% insured) coverage of their populations by 1990."
Recent evidence demonstrates that lack of health insurance causes some 45,000 to 48,000 unnecessary deaths every year in the United States. In 2007, 62.1% of filers for bankruptcies claimed high medical expenses. A 2013 study found that about 25% of all senior citizens declare bankruptcy due to medical expenses, and 43% are forced to mortgage or sell their primary residence.
DeleteHUD increased Fannie Mae and Freddie Mac affordable-housing goals for next four years, from 50 percent to 56 percent, stating they lagged behind the private market; from 2004 to 2006, they purchased $434 billion in securities backed by subprime loans.
ReplyDeletehttp://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626.html
2005
ReplyDeleteFebruary: The Office of Thrift Supervision implemented new rules that allowed savings and loans with over $1 billion in assets to meet their CRA obligations without investing in local communities, cutting availability of subprime loans.
September: The Federal Deposit Insurance Corporation, Federal Reserve, and the Office of the Comptroller of the Currency allow loosening of Community Reinvestment Act requirements for "small" banks, further cutting subprime loans.
http://en.wikipedia.org/wiki/Timeline_of_the_United_States_housing_bubble#2001_-_2006
Reagan must have been great.
ReplyDeleteHe ratted on his friends at the McCarthy hearings, and republicans don't remember.
He raised taxes 6 times, and somehow republicans don't remember it.
He instituted the 3 largest tax increases ever in the state of California, and republicans don't remember.
He created dozens of new beurocracies, and put his personal friends in high-paying, do-nothing jobs, and republicans don't remember.
The Soviets shot down a Korean airliner, and he did nothing.
200 marines died in Beirut and he did nothing.
120 Cuban construction workers landed on Grenada, and he "liberated" students, some of whom never even knew it happened, then he issued 7,000 (not a typo, 7,000) medals for the ridiculous military farce.
Yes, Reagan was a hero of every republican's imagination.
Invariably, when people go off the rails, they become more conservative. No one loses their mind and becomes more liberal. Conservatism is where people go when one capacity or another begins to fail them. It's the consequence of failure, and it's usually accompanied by more of the same.
ReplyDeletehen reasoning and logic start to go, a person tends to start agreeing with Glenn Beck and Rush Limbaugh
No 'f'ing different than what we have witnessed from our disrespectful republicans since day one of Obama on ANY other topic.
ReplyDeletePre-manufactured dysfunction and waste. Nothing more, nothing less.
Facts:
ReplyDeleteDemocrats have higher IQs than republicans.
Liberals have higher IQs that conservatives.
Democrats have higher levels of education than conservatives.
Liberals have higher levels of education than conservatives.
Democrats earn more than republicans.
Liberals earn more than conservatives.
Source: http://www.census.gov/compendia/statab/
Conclusion: Republicans are stupid, ill-educated, jealous and greedy. The tea party are stupid republicans.
Republicans have now made attacking teachers a successful norm. Clearly people they see education as a threat.
ReplyDeletehttp://www.eduinreview.com/blog/2008/09/are-democrats-more-educated-than-republicans/
"Chicago's failed bid to host the 2016 Olympics in the first round of voting caps a week of conservative attacks against President Obama for personally stumping on his home city's behalf.
ReplyDeleteUpon being informed of the news, a gathering of conservatives at the Americans For Prosperity -- one of the main organizing groups behind the tea party protests -- erupted in applause. They cheered once more after they were told that Chicago had been eliminated during the first round of voting."
During King's life time the political right painted him a commie and trouble maker,, defamed him and very few supported his civil rights movement.
ReplyDeleteNow, the right calls MLK a a civic hero and say he was a Republican. They're the poster party for Gore Vidal's "The United States of Amnesia."
Why does anyone continue to vote Republican? The GOP policies have been proven wrong wrong about everything in the world.
ReplyDeleteWhat today's conservatives seem to lack the ability, or desire, to comprehend any meaningful understanding of history. The conservatives of the 1700s remained loyal to Great Britain and considered the founding fathers as traitors.
ReplyDeleteRule of thumb: right wingers almost always come out on the wrong side of history.
ReplyDeleteThe right wing southern faction of congress will destroy the American economy at the drop of a mint julep just to impede any effort of economic progress by the president who is vilified by their obvious covert racism.
ReplyDeleteThe Republican Party is totally committed to make America fail, their only goal is to destroy_the President, they do not care who they harm.
ReplyDeleteIt is so obvious and so plain that the American mass media dare not mention it.
Conservatism is just so filled with contradiction, inconsistencies and outright lies I don't understand how the common person can hold it as a world view. I do understand how the wealthy whose perch on top of the world depend on their adoption of conservatism as a worldview is accomplished.
ReplyDeleteI have considered myself to be a fair person and logical, and even I have to admit that this field of Republicans out there now appear to be mentally challenged OR they just lie in the hopes that somebody out there will "buy their lies" and maybe vote for them. On the whole, Republicans have lost their minds if they every had one. They are so very disconnected from main stream America that I find it astounding that they can get one vote. I guess it just shows how crazy and uninformed some voters can be as well.
ReplyDeleteThe Bush Administration repeatedly blocked Government Sponsored Enterprises (GSE) reform. In the 108th Congress, the House Financial Services Committee reached an agreement to markup legislation originally scheduled for October 8, 2003. However, on October 7, 2003, the Treasury Department announced its opposition to this agreement, killing progress on GSE reform. (Congressional Research Service, "Improving the Effectiveness of GSE Oversight: Legislative Proposals in the 108th Congress.")
ReplyDeletehttps://opencrs.com/document/RL32069/
In the 109th Congress, Democrats supported bipartisan legislation drafted by the Republican Chairman of the House Financial Services Committee, Representative Oxley, which would have given the new GSE regulator broad authority over setting capital requirements and limiting portfolio size. This bill passed the House 331-90. Senate Democrats supported and offered the bill in the Senate, but the Bush Administration opposed it and the bill did not receive Republican support in the Senate. According to Mr. Oxley, the White House gave Congress and the GSE reform legislation "a one-finger salute."
·"'We missed a golden opportunity that would have avoided a lot of the problems we're facing now, if we hadn't had such a firm ideological position at the White House and the Treasury and the Fed,' Mr. Oxley says." (Financial Times, 9/11/08)
http://www.ft.com/intl/cms/s/0/8780c35e-7e91-11dd-b1af-000077b07658.html#axzz2n1xnmkQf
·GSE reform "wasn't a priority of this Administration's. They quite frankly put it on the back burner. And now we see what we have." (Douglas Holtz-Eakin, NPR, 9/16/08)
http://m.npr.org/story/94658962
If you believe in the "free market" then you believe that producers should sell products that reflect the "true cost" of production, and that consumers should pay the "true cost" of those products.
ReplyDeleteIf you believe in that, then you should believe that employers should pay their employees a "living wage".
After all, If employers (e.g. fast food franchises, WalMart, etc) don't pay a "living wage", then who pays for it when those employees are forced to rely on "handouts" (from the "government" and/or from private sources) to survive? It's the consumers who pay for it, and the employer who benefits from it.
"It is but equity...that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed and lodged."-Adam Smith, The Wealth of Nations, 1776
ReplyDelete"It is not the actual greatness of national wealth, but its continual increase, which occasions a rise in the wages of labour. It is not, accordingly, in the richest countries, but in the most thriving, or in those which are growing rich the fastest, that the wages of labour are highest. England is certainly, in the present times, a much richer country than any part of North America. The wages of labour, however, are much higher in North America than in any part of England."
ReplyDeleteAdam Smith
"We stand for a living wage. Wages are subnormal if they fail to provide a living for those who devote their time and energy to industrial occupations. The monetary equivalent of a living wage varies according to local conditions, but must include enough to secure the elements of a normal standard of living--a standard high enough to make morality possible, to provide for education and recreation, to care for immature members of the family, to maintain the family during periods of sickness, and to permit of reasonable saving for old age."
ReplyDeletePresident Theodore Roosevelt
"Servants, labourers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, cloathed and lodged." - Adam Smith, The Wealth of Nations
ReplyDeleteAccording to the Bureau of Labour Statistics, the median age of fast-food workers is over 28; and women, who comprise two-thirds of the industry, are over 32. The median age of big-box retail workers is over 30.
ReplyDeleteThe Republican Party has pulled the wool over the eye's of the American people just so they can keep the super wealthy donating great sums of money to their campaigns
ReplyDeleteTax cuts can provide an economic stimulus that can help create jobs when the cuta are aimed at the right people, and contrary to republican beliefs, the right people are NOT the super rich. You have to aim the tax cuts only at those who will SPEND the money. Giving more to the super rich will just create bigger bank accounts in the Cayman Islands. The money will still eventually get to the rich, but before that it will reach many other people. THAT'S what kind of stimulus will work. We've had way better economies at way higher tax rates.
ReplyDeleteThe new GOP theme: Leave all facts behind!
ReplyDeleteThe truly rich don't spend the extra money, they send it to their money managers who invest it. It is a true GOP canard to say they 'create job'. The middle class are the job creators.
ReplyDeleteI recommend that you read this report. It throws the Republication Party out of the window of making a case for economy. Wealthy folks have done very well and have nothing to complain about.
ReplyDeletehttp://www.huffingtonpost.com/2012/11/01/congressional-research-service_n_2059156.html
The George W Bush years are a good example. Huge corporate tax cuts and hundreds of billions in new subsidies and big corporate welfare checks, and at the same time, record numbers of American factories closed and shipped to China along with millions of American jobs. All that spending and cutting did was send our national debt out of control and give the greedy corporate CEOs like Mitt Romney more money to spend in China and his tax records show, that's exactly what he did. The sad thing is that Bushonomics is still alive and well in Washington.
ReplyDeleteThose big corporate tax cuts that were draining the economy and forceing borrowing from China when Bush was in office are still there. Those big corporate welfare checks are still going out and we're still borrowing money to cover them because Paul Ryan, a Bush Republican and member of Congress for fourteen years, and the rest of the Tea Party Republicans in congress have blocked every attempt that Obama has made to get rid of them
Get the Tea Party Republicans out of congress so the man can do his job.
In 2011, the Economics Policy Institute put out a couple of reports that indicated that while the GOP claims that taxes and regulation are the main concerns of business related to restraining production, when surveyed business managers and executives stated that lack of demand and not taxes or regulations was the biggest source of uncertainty.
ReplyDeleteConservatives deny facts and never explain their positions because they can't. Their positions have no basis in reality and are unsustainable, so the only thing they can do is obfuscate, deny, attack and deflect.
ReplyDelete"Regulatory uncertainty: A phony explanation for our jobs problem"
http://www.epi.org/publication/regulatory-uncertainty-phony-explanation/
Republican mantra of the rich being the "job creators" is patently untrue
ReplyDeleteTrickle down economics and lower taxes on the wealthy are synonymous with 'Banana Republic' which is exactly where we're headed with right wing republican policies. Banana Republics are also run by the 1% elite, not democracies. Given the opportunity that's exactly how the right wing would like it here in the USA and they'll do anything to get to that point - lie, cheat and steal. What baffles me is just how many of the American working class believe the republican rhetoric that they represent them when it couldn't be further from the truth. What a travesty!
ReplyDeleteLook at the Reagan presidency when he said giving tax breaks to the rich and big business would spur growth. He was dead wrong, trickle down economics did not work, and he ended up promoting tax hikes. If anyone is not paying their fair share in this ecomomy it is the rich
ReplyDeleteOh yeah, I forgot, they're the party that isn't going to be dictated by fact checkers!
ReplyDeleteThis Republican Party is, truly, insanely self-serving. I fear for this country.
ReplyDeleteI VOTED REPUBLICAN:
ReplyDeleteAnd all I lost was -
My job
My Healthcare
My Student Loan
My Unemployment
BUT -
My millionaire Banker and Doctor both got tax cuts and my 15 year old sister had to drop out of school to have her rapist's baby.
GOPers are against abotion, but also against helping children in needy families
ReplyDeleteObama iz Stalin!11!!!!!! lolzzzz! Obama iz socialist dats wut Fox Newzs told me!!!1! Obama next Hitler!11!!!!! Lololo
ReplyDeleteHow can a party continue to exist and thrive if it jettisons every fact that does not fit its worldview? The GOP is a JOKE, and a bad one, at that!
ReplyDeleteRepublicans have hordes of people more than willing to vote against their own best interest in the deluded belief that if they support the 1%ers they will magically become one of them some day in the not so distant future!!
ReplyDeleteThe GOP Greed Over People Party could care less about America. They care about one thing: GREED. Did I mention they care about GREED. Such low character liars, manipulators, ideologically right wing and ignorant people
ReplyDeleteOh, if anyone ever thought that Republican philosophy was based on any type of objective reality in the first place they are fools. Instead, it is usually based on all the negative instincts of humanity. Unfortunately we must tolerate these folks among us and the friction they create.
ReplyDeleteThe Republican agenda is not good for the country.
ReplyDeleteDavid Stockman was Ronald Reagan's Budget Director. He publicly stated that "trickle-down" economics was a myth. He was punished because he was brave enough to point out that "the emperor had no clothes."
ReplyDeleteIf Republicans can make it harder for minorities to vote with their tricky ID laws, then we get to make it harder for teabaggers to vote by bringing back the literacy test.
ReplyDeleteYou can ask me for a picture ID, and I’ll ask you to count to twenty without taking off your shoes...
The Dems didn't completely control the Senate. Al Franken was seated nearly eight months after winning his Senate seat. Even if the Senate was controlled by Democrats (e.g. 50 seats), the statement ignores two other facts. a) there were Democrats in the Senate that vote as if they were Republicans. b) Republicans liberally used the filibuster to block legislation.
ReplyDeleteThe Dems never had 60 Senate seats post-2008. They had between 56 and 58 seats. For that very brief period they had 58 seats with consistent support from Bernie Sanders and inconsistent support from Joe Lieberman. The Democrats hardly had 60 Dem seats, and hardly 60 reliable Dem votes. Then in a special election the following January, Scott Brown won Teddy Kennedy’s old seat, and was sworn in on February 4th.
http://latimesblogs.latimes.com/washington/2009/06/democrats-60vote-majority-in-senate-so-close-and-yet-so-far.html
And then we have the Southern Religious Right, the Tea Party and the new rise in selfishness.
ReplyDeleteWarren Buffet said it perfectly when he said "There's class warfare, all right, but it's my class, the rich class, that's making war, and we're winning."
ReplyDeleteAnd when he said "there’s been class warfare going on for the last 20 years, and my class has won."
And when he said "if this is a war – I wouldn’t call it a war, I’d call it a struggle – but, if this is a war, my side has had the nuclear bomb. We’ve got K-Street, we’ve got lobbyists, we’ve got money on our side".
Warren Buffet is very smart and observant.
Santa Claus is white and fictional, and Obama is black and reality. And therein lies the problem for a network that dwells in fiction.
ReplyDeleteur currency is backed by the full faith and credit of the United States.
ReplyDeleteWhen it was backed by a pretty yellow metal it was far more problematic.
The Bible, just like the Constitution, doesn't say what the American right wing believes it does.
ReplyDeleteIt must be nice to live in such a black and white world as the one inhabited by conservative polemists like Rush Limbaugh...
ReplyDeleteIt must be nice to live in such a black and white world as the one inhabited by conservative polemists like Rush Limbaugh...
ReplyDeleteHow is pointing out the injustices resulting from some "capitalist" practices become "Marxism"...How is wanting to see improvements to the capitalist system to ensure fairness and promote a more humane world a call for a "Marxist" revolution?
Just because I point out my car needs to be taken to the shop for repairs doesn't imply that I want to ban cars and favor bicycles or public transportation!
Whomever listens to Rush Limbaugh, and believes the non-sense he blabbers about, must be at the same intellectual level. Remember Mr. Limbaugh barely made it through high school. The problem with that segment of the American population is one that can only handle a very simplistic approach to life; simple ideas, simple lives, simple explanations to things. That's why fundamentalist religion is so important to that segment of the population; simplistic explanation to the world around them. Those people cannot understand the world is a very complex world
ReplyDeleteI love that the religious right claimed the Pope as one of their own, but now that Rush has pointed out his evil ways in wanting to help the poor, the right has abandoned the Pope, and demeans him at every turn. You just can't make this stuff up! They hate the Pope, what kind of people belong to this family values club they have going on.
ReplyDeleteThis Pope is a true man of the cloth and everytime he does something or says something, he truly believes in the gospels of Christ and does the work of Jesus on Earth!
ReplyDeleteCan you imagine someone preaching that we need to help the poor, and the right finds that outrageous! good grief!
I'm glad our new pope is progressive, and considering how the GOP is so against helping the less fortunate--to be a Republican and Christian at the same time is a inconsistency.
ReplyDeletehe pope is right on this one.
ReplyDeleteWe have the closest thing to unfettered capitalism anywhere in the world, with bank and financial institution deregulation, with corporations being recognized as quasi-humans and citizens, with the virtually unfettered flow of money into our politics--money NOT coming from the 98% of us but mostly from the top 2% of the us.
Amazing how controversial basic Christian values are to many so called "conservative" Christians. According to the last figures I saw less than 500 of the earths' richest people have as much wealth as half the earth's population, AND THERE IS CONTROVERSY regarding whether unregulated Capitalism is a just or fair economic system? Really!?
ReplyDeleteMarkets are regulated, on paper. There are no punishments handed out for transgressions. Therefore, his unfettered remarks are true. The lies are transparent to everyone but the liars.
DeleteIn 1980 the top 1% earned 8.5% of total income. In 2007 they earned 23%.
ReplyDeleteIn 1980 the bottom 90% earned 68% of total income. In 2007 they earned 53%.
http://taxfoundation.org/article/summary-latest-federal-income-tax-data-2012#table3
GOV'T POLICY MATTERS !!!
Keynes wrote "The End of Laissez Faire" in 1926. He was correct then, and his insight remains more valid than any economics that conservative Libertarians propound ad infinitum and ad nauseum. Laissez Faire is nothing more than a childish Christmas wish of no substance; just hope and myth, and smoke and mirrors. Fails every time we try even the tiniest bit.
You can haven all the regulations imaginable on the books, but if there's only a token handful of underfunded regulators, then it's as if the fetters were neither attached nor locked, and piles of sawblades sitting around. That's the new American way of establishing unfettered capitalism.
ReplyDeleteThe Republican Party hasn't had a single idea that benefited the majority of Americans since before Reagan.
ReplyDeleteIn person voter fraud is never a real problem but election fraud is a serious problem in America. Suppression of voting rights of citizens is rampant. The closing polling stations to create very long lines but only in certain demographic areas, shortening of early voting, eliminating high school student early registration, putting higher ID hurdles between the ballot box and who traditionally don't carry the "proper" picture ID, college students, the elderly, women and people of color
ReplyDeleteRepublicans state that they are against wasting tax payer money ,,,then make up a problem and waste tax payer money
ReplyDeleteThe entire voter fraud thing from coast to coast, north to south is bogus. It was/is an excuse being used by the TP/GOP/Kochs to rig elections, deprive Americans of their right to vote so that they can eventually dominate us and jam their so-called conservative utopia down our throats.
ReplyDeleteDemocracy is not that popular now within today's GOP
ReplyDeleteIt has nothing to do with voter fraud but irrational justification for voter suppression! If you can't get the people to vote for you, then stop them from voting at all
ReplyDeleteThe only voter fraud being committed is by republicans who are trying to stop people from voting in any way they can.
ReplyDeleteBy the time the Republicans have implemented all the imaginable protections against imaginary voter fraud, NOBODY will be able to vote.
ReplyDeletepff the real voter fraud is the gerrymandering of the districts, Typical cheaters assuming everyone else is cheating. Another stroke of genius from the party of fiscal responsibility
ReplyDeleteOH COME ON! surely you know by now that the ultra-conservative-right-wing-"Christian"-GOP-TeaParty individuals NEVER let something as trivial as FACTS and TRUTH get in the way of a good 'talking point'!
ReplyDelete“When regulators don’t believe in regulation and don’t get what is going on at the companies they oversee, there can be no major white-collar crime prosecutions,” said Henry N. Pontell, professor of criminology, law and society in the School of Social Ecology at the University of California, Irvine. “If they don’t understand what we call collective embezzlement, where people are literally looting their own firms, then it’s impossible to bring cases.”
ReplyDeleteThird World countries. One of the things they all had in common was a small, very rich elite, small middle class, and a large lower class. They also shared very low economic growth as a result. This has been known for at least 50 years. The US has been going in this direction for at least the last 30 years as we have gradually de-industrialized and government policies (such as trickle down economics) have promoted the shift of wealth from the lower and middle classes to the economic elite
ReplyDeleteYou can fault Bernanke for not doing more to avoid the 2008 crash but without his response to the crash we would all be in the economic toilet right now. The people who have been vilifying the Fed for the ;last 5 years would have taken us right down the road to depression just like the 1930s. It's a Republican thing.
ReplyDelete