Way to go, Norway. You just awarded Obama with another incentive to continue to send money and troops overseas, despite his promises to the American people that he would bring change.
So far the difference between Obama and Bush is... very little. Oh he's pretty, all right: He looks good on camera and he's a wonderful orator. But Obama is all talk with very little substance. Even his liberal supporters are beginning to grumble. Loudly. Turn to the recent episode of Saturday Night Live to see a not-funny depiction of where they think he's going wrong.
Meanwhile, troops die in Afghanistan, still suffer in Iraq, and our monies continue to be funneled overseas to whatever particular cause the President thinks will make him look good. This isn't restricted to Obama, of course. He's only one in a line of weak-kneed Presidents who put everyone but their own citizens first.
We have entered into a Depression, we have more homeless than ever, and the best the government seems to be able to do is extend unemployment benefits for a little while longer. Since the Depression cannot lift for some time, all this will do is prolong the inevitable.
What the American public needs is real change.
Enough with the lauditory awards. Enough with the talk. Enough with throwing money at banks and institutions with vague promises that it will help the economy and increase jobs.
Obama will only deserve the Nobel Peace Prize when he brings peace to America.
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When I read between the lines of this story, I see Europe thumbing its nose at George Bush when they awarded the prize to Obama.
Not to be an apologist for Obama, but we all know that controlling the government is like driving a tanker ship. You can't turn them things on a dime even if your party is in control. This is a direct result of our expansionist government policies of the last several decades.
I agree with Ed, this award is a repudiation of the Bush Administration. And while Obama hasnt changed much in practice, what he has changed radically is the attitude of the United States and it's presumption of authority, rightness and moral superiority.
Bush and his cadre brought such an arrogance to American foriegn policy that I cant even think of anyone comparable to them from my lifetime. They acted unilaterally and without regard to the opinions and interests of our allies or even enemies (and before any one gets on me for considering the desires of our enemies, you cannot achieve peace without at least talking about what the enemy wants - and Bush "negotiation" consisted of "do what I'm tellin' ya!" and a stubborn refusal to talk unless is was accompanied by complete capitulation). He acted like a undershirt-clad, old-school father who rules with his fists by personal fiat. Such an attitude can only lead to the peace of the grave.
Have you read Gerald Celente's prediction of what the next several years hold in store for us?
The annointings continue for The Annointed One.
I saw this coming the day before it happened but failed to blog about it.
Pah! Celente's an amateur. You want to read some serious doom and gloom, try Jim Kunstler, a cassandra without a political axe to grind. "Obamageddon"? Seriously? Yeah, 30 years of increasingly unregulated marketplace-based greed had nothing to do with it, it's all on the head of a guy who came into power after the collapse started and has to fight the Republican Party every step of the way in order to do anything. I'm not saying Obama's doing it right, I'm just saying that he's doing it better than the Republicans would.
daveawayfromhome,
Contrary to popular belief, the marketplace was not and is not unregulated. The mortgage sector was increasingly regulated and pressured by liberal policies to make bad loans. This led to the collapse of Fannie and Freddie, and from what I read FHA will be the next to go because, that's right, the Dems in congress gave them a mandate to make bad loans. I don't want to let anyone in government off the hook, but give credit where credit is due. There are videos of Johns McCain telling Barney Frank, Chairman of the Senate Finance Committee, that Fannie and Freddie were in trouble. Frank, who got lots of money from them, insisted that everything was fine. We are increasingly learning how wrong that was. It wasn't lack of regulation that caused the meltdown. It was over-regulation on one side while ignoring the safeties.
The marketplace is regulated, but not enough. Start by reinstating the Glass-Steagal Act. As for FHA Sallie/Freddie, really? You seriously think that a few bad loans were the problem? Not the financial games played with default credit swaps, insurance on insurance, loan bundling until no one knew exactly what they were buying, all done by financial wizards who gained (and are still gaining) whether they peddled gold or dross. That wasnt the problem? Oh, no, it was a few billion in housing loans that bankers should have known better than to give out and buyers should have known better than to accept. Right.
"You seriously think that a few bad loans were the problem?"
No. I think thousands or tens of thousands of bad loans were at least a major part of the problem. I also know, because it was made into law, that the Democrats pressured the banks to make the bad loans through the Community Reinvestment and Recovery Act. I also know, as mentioned that this was brought to the attention of Barney Frank two years before the crash and he dismissed it, much as you appear to be doing. I also know that FHA made over 300 billion dollars in loans this past year that appear to be at or near default because even though there is already regulatory oversight in place, the Obama administration is not using it effectively. If you have some substantial evidence that I am wrong on any of these points, please share it.
Lets talk about those mythical FHA loans that were "bad".
Yes, mythical.
Come to Miami. Ill take you out on my boat and show you luxury condo building after luxury condo building that are not occupied. Construction is halted. The whole building - and all the units in them - are either in foreclosure OR tied up in a giant legal mess. The builder is bust, the units were not finished on time, the buyers want to walk on the deal because they will loose big time closing at pre-sale prices so they hired lawyers (who can not get anything because the builder is bust) - and it is all a big giant mess.
By the way, you can see these units very well from the boat. They are WATERFRONT properties. The cheapest units were in the low $500,000s.
FHA loans huh? Low income home loans huh? Try again. Just one of these buildings would easily account for an entire neighborhood of low income housing gone bad.
When you get tired of seeing busted buildings by boat I can show you more by car. On Miami Beach. Really nice places. All dark because nobody can move in.
Even the good loans went bad - because people quickly learned that even if they could afford the mortgage they could not afford the maintenance fee assessed with 80% of the building empty.
Yet the "it is all the FHA" myth lives on.
The problem was more than one thing. You had this unrealistic unsustainable increase in home values, fueled by cheap credit that banks were just giving away to anyone. The credit was leveraged, so that even if the interest rates on the loans were low they made truck loads of money on the leverage. There was wild and rampant speculation. People were buying properties that they never planned to live in. Buy, hold, sell, repeat. Homes became like stock, and people were day trading.
Low income people getting loans were not really the problem. They just wanted one home and they planned to live in it. They were not speculating on 1/2 million dollar luxury condos on Miami Beach.
Well, I can certainly understand why you refer to yourself as the "lazy" iguana. No research, no evidence. Halted construction can be a symptom of anything from a bad builder to buyers pulling out, etc. Now go on line and research the Community Recovery and Reinvestment Act, and find out how congress pressured banks to give loans to people who could not afford them. While you are at it, do a little economics research to what kind of effect no and low down payment loans have on borrowing for homes. (I'll give you hint: When people have little equity stake to lose, they borrow more than they can afford.) Now go do some research on how much money the FHA has loaned this year, and then ask yourself why an entity making that many loans would suddenly find itself on the verge of bankruptcy.
Pointing at buildings is easy, but proves nothing. Do the homework.
By the way, I believe I forgot to mention a couple of relevant facts in my earlier analysis. John McCain, Barney Frank, and Barrack Obama were all receiving large amounts of lobby funding from Fannie and Freddie from the time that McCain was warning about impending insolvency of the groups. While I won't defend accepting lobby money, at least McCain warned there was a problem in the system. Frank said it was fine and Obama, well, I think he voted "present." Kind of says something about the integrity of our elected oversight.
Sure, you could blame the stupid schlubs who got stupid loans, but we're talking billions in homeloans vs. trillions in default swaps. It's easy to see the billions and blame that, since regulators still havent figured out how some of the packages were bundled, sold, insured, split up, bundled again, sold again, insured again, spread around, and often based upon those "bad" loans. But that doesnt mean that it's the right answer. It's easy to see the sun goes around the Earth, also.
I'm not going to argue that there havent been bad loans. There have. I'm not going to argue that people were given loans that they shouldnt have been given. They were. But the law didnt say "give loans to people who cant afford them", it just specified that you couldnt deny them a loan just because they were a certain color, or live/want to live in the "wrong" part of town.
The real problem is that there were people who were giving out bank loans who got a commission to make the loan, but themselves had no further part in the risk of that loan. Those people had no incentive to make good loans, since once they had their cut of the fees, they were out of the loop.
Then we have the banks, who, rather than making their money from the repayment of the loans, instead sold them off in inscrutibly complex bundles to yet another party, insuring that they didnt care much what happened to the loans after they had their cash in hand.
Do that again with yet another financial institution. Then insure the whole thing a couple of times.
Now really, who's fault is it when this huge tottering edifice falls over because one of the supporting legs break? The leg, or the idiots who piled all the stuff on the ricketty chair to begin with? Or maybe the regulators (or those who made the regulations) who stood by and watched all the stuff get piled up in the first place?
"There was wild and rampant speculation. People were buying properties that they never planned to live in. Buy, hold, sell, repeat. Homes became like stock, and people were day trading."
And really, we could argue all day about "bad" loans, but in that statement is the real problem, the same problem in almost every single economic collapse ever.
Speculation.
As long as there is no mechanism of any kind to hinder speculation, or at least make it no more profitable than real, long-term investment, we'll continue to have these kinds of problems.
It might make you feel better to blame stupid people who shouldnt have taken out loans they couldnt afford, but the amount of money affected is in the trillions, and it's all from accounting games and financial tricks built upon a bad foundation of questionable loans. Maybe those loans shouldnt have existed, but the pyramid schemes that were built upon those loans should have been illegal. Instead, they were excused and encouraged by the very people who should have been regulating them, then after it all collapsed, we got stuck with the bill to clean up the mess.
Worst part: they could do it again next year, and if predictions about the commercial properties market are true, probably will. Who will you blame for that one?
"But the law didnt say "give loans to people who cant afford them", it just specified that you couldnt deny them a loan just because they were a certain color, or live/want to live in the "wrong" part of town."
Uh...wrong. The law said that if we don't like your loan practices with regards to certain classes, we will investigate you and we will block your business from expanding. We will allow you to be sued and charge you to defend yourself. On the other hand, we will provide incentives to loan to people who normally wouldn't get loans. No pressure, though...
"The real problem is that there were people who were giving out bank loans who got a commission to make the loan, but themselves had no further part in the risk of that loan. Those people had no incentive to make good loans, since once they had their cut of the fees, they were out of the loop."
And why could they do that? Because Fannie and Freddie had the mandate to buy up worthless loans and the government blessing to do it.
For two centuries, the mortgage business was the cash cow of the banking industry. It made money no matter what. There was no incentive to make bad loans...until Barney Frank and company made it imperative to do business.
"The leg, or the idiots who piled all the stuff on the ricketty chair to begin with?"
The idiots, of course. And in this case, the idiots are the Liberal Dems who insisted that loans be made that could not be repaid even when they were warned by Bush and McCain years ahead of time that the system was in trouble.
"It might make you feel better to blame stupid people who shouldnt have taken out loans they couldnt afford, "
It might make you better to blame people who have managed to better than others, but there is no excuse for the government forcing bad loans that the rest of us have to pay off. As for speculation, if the government had been watching, the risk would have been assumed by the speculators, not the taxpayers. Once again, thank you Barney.
"Worst part: they could do it again next year, and if predictions about the commercial properties market are true, probably will. Who will you blame for that one? "
I'm sure I will blame the same people. They seem to keep getting re-elected, and they are still pushing economic policies that kill competition, encourage dependency, and choke off job creation. The current Democrat controlled congress and president would have a hard time designing a program much worse for America than the one they have already instituted with runaway spending, massive creation of government jobs, continued plans to tax and discourage business and job creation. Yes, I know exactly who is to blame.
"Maybe those loans shouldnt have existed, but the pyramid schemes that were built upon those loans should have been illegal. Instead, they were excused and encouraged by the very people who should have been regulating them, then after it all collapsed, we got stuck with the bill to clean up the mess."
You mean like the head of the Senate Finance Committee? We already knew that he was informed of at least one meltdown and said that everything was fine. We also know how well the Dems look into any suggestion that their allies might not be honest. It took...what...four videos of acorn involved in illegal activity before anyone took it seriously? Five? I've counted at least three videos about Planned Parenthood. Still no interest. Charlie Rangel is the head of the Ways and Means Committee. Very important to finances. He also has been charged with multiple tax illegalities. The house has been investigating him for over a year. The Democrat controlled house. Still no conclusion, though I'll make a bet on what they say. Remember: These were the people watching the watchmen when things really went bad. You want to make someone responsible? Have a field day. You want to push class warfare, well... no one can stop you, but somehow I don't think that'll really do much to solve the problem.
You assume too much.
Keep in mind I live in Miami. I know people who bought into some of these units. I also know people who are privy to the details of the builders. You know - people who work in the tall bank buildings in downtown Miami.
People I go out drinking with. People who go to my boat club. People who made money making these bad loans. People who were crooked mortgage brokers. And so on.
So yes, I have done my research.
Are things here horribly corrupt? Yes. More corrupt than other cities? Got me. Maybe, maybe not.
But I know people who were FORCED to walk. They made a bet on the market, and they bet wrong. As a result they were forced to walk.
A former boss was forced to hire a lawyer to get out of his contract at the Ivy Towers on the Miami River. Moss is the builder. So do your own research.
I can take you up the Mimi River to see the building if you want. Want is to be the main lobby is still a construction zone. No workers have been there for months.
And that is just one of many.
I know - all those darn poor people who thought they could really afford a million dollar luxury condo! Darn FHA for forcing banks to make loans!!
PS - you can buy a water front HOME (not a condo) on the water in Miam1 for $2 million asking price. You can likely negotiate this price down.
Before the crash the same home would be a good $3 or $4 million.
Lazy,
First off, if I were you, I would improve my taste in drinking buddies. Second, nothing you wrote did anything to counter or disprove my statements about congress pressing lenders to make bad loans or my assertion that FHA is making bad loans. You also said nothing to substantiate your claim that that the bad loans are "mythical." What you are doing is blowing smoke, so let's clear some of it out.
You are describing builders going out of business and alluding to corruption. I can't say how much corruption and it seems neither can you. Should it have been caught? That's the theory, but it has nothing to do with my point about lenders being pressured to make hundreds of billions in bad loans. How much of the problem might be centered around Miami, I can't say. I can say that builders going bankrupt don't usually have anything directly to do with bad mortgage loans. My understanding is that builders use business loans to construct houses or condos on spec. These are a different type of loan, generally with a much shorter repayment period. They go bankrupt when either they are involved in bad business or when people just won't buy. Either way, builders going bankrupt are more likely to be an effect of a mortgage loan problem than a cause. When the mortgage loans dry up, people can't buy houses or condos. Builders have millions, or more, invested in buildings they can't sell. Is this a problem for the financial industry? Likely? How much? Don't know and neither do you, but it still doesn't have a lot to do with the problems with Fannie, Freddie, or FHA.
Future tip: The singular of data is not anecdote, which is what you are relating.
Okay, let's agree and say that the Democrats in congress suck. I'll not argue with that, for the most part, though for different reasons, no doubt.
However, you're going to have work pretty hard to convince me that a party that cant even overcome Republicans decisively, even when they have the presidency and clear majorities in both houses of Congress, were able to, all by themselves, pass bills that have brought down America's financial system.
Democrats, until last January, havent had any real power in Congress since 1994. And it's been decades since any political discussions in the U.S. have been framed in any terms not set out by the Right.
So, I'm willing to say that your own personal boogiemen, the Democratic party, has made some errors, colossal ones, and that many of them may be corrupt. I'd be happy to see many Democrats currently holding office tossed out on their cans. But they didnt do it alone; they had Republican partners every step of the way, because it would have been impossible for them not to have.
The SallieMae/FreddieMac programs were no worse an idea than the G.I. homeownership bills were - they gave people who wouldnt have been able to purchase a home otherwise a chance to do so (and if you can pay rent, you can pay a mortgage, which is usually lower). The problem seems to have been a lack of adequate safeguards against stupidity and greed. Well, while Dems like seeing the less fortunate among us do well (since it results in votes), guess which party likes a lack of regulations (which results in profits)? It aint Democrats.
Hi Dave,
Obviously they did not pass the legislation all by themselves. You mentioned that they have not had any real power since 1994. The act was passed in 77. This was the era when affirmative action was first getting started. There was a mixture of guilt about the way that minorities had been treated, and since then it has morphed into near terror when it comes to being labeled racist, and that's the true power behind the act. Proof isn't needed to label a lending organization racist, or at least make the case to liberal regulators. So yes, in a climate as was created, it was easier for banks to give into the pressure to make bad loans than to risk both the wrath of regulators and be labeled as racist by Jackson and the Rainbow thugs (who routinely extort money from businesses anyway, but that's another article).
"And it's been decades since any political discussions in the U.S. have been framed in any terms not set out by the Right."
That comment is so laughable, it's not worth commenting on right now. Give me a specific, and we can discuss it.
Yes, I quite agree that at least some Republicans have gone along, whether actually believing that the actions were correct or out of fear of being labeled, I don't know. Lots of blame to go around, to be sure, but one party was definitely in charge when Frank and Pelosi were calling all of the shots in 2006 and were told that the mortgage house was on fire. Frank said everything was fine, pulled up a chair, and opened a bag of weenies.
"The SallieMae/FreddieMac programs were no worse an idea than the G.I. homeownership bills were "
Wrong on so many levels that it's hard to know where to begin. How about starting with people actually had to work to obtain the benefit? The people who got VA loans actually had a track record of work and success. A lot of them weren't rich or even middle class, but they had held a demanding job for years, worked under pressure, and developed a work ethic and skills. Add to that, a lot of them also were educated, because the same job had given them an opportunity for a college education. Unlike the stupid minority preference system of today, however, it didn't get them into a school they couldn't handle. It just made sure they could pay the bills as long as they could stay. That, along with the discipline they picked up in service, made it a pretty good investment. These people were going to get good jobs, get promotions, and pay back what was given many times over in taxes. And how did we know that? Because they had already shown us.
Contrasting with the Community Reinvestment Act - People were loaned money based on the fact that other people probably wouldn't loan them money. Because they had not demonstrated good skills. A lot of people who "qualified" didn't have skills or a decent job. They hadn't shown squat as far as a work history. And despite that, they were loaned more than they could afford. They had such a low down payment, or maybe no down payment, so if they walked away from the loan, they were out almost nothing at all. In short, they had to show nothing except the ability to sign on the line and taxpayers assumed all the risk. No, it's not a lot like the VA home loan program at all.
"The problem seems to have been a lack of adequate safeguards against stupidity and greed"
I'll agree with you part of the way. There was a lot of greed. And thanks to the provisions of the act and willing enablers like Barney Frank who kept getting his money from Fannie and Freddie, what safeguards were there weren't used. As for the rest...
"Well, while Dems like seeing the less fortunate among us do well (since it results in votes), "
I have to think that Dems really do not like seeing people do well. If they did, they would push for education reforms that really work, like school choice, charter schools, phonics, English immersion, and all of the other things that have been consistently shown to work far better than bilingual education, union dominance of education, whole language, etc. They would work to empower people, rather than unions, and allow anyone in any state to work in any job regardless of whether or not they belonged to a union. But then they would loose all of that lovely union slush. They would also insist on a high content education that emphasized critical thinking rather than trying to raise activists. Right now, about the only thing you can count on coming out of a school of education is knowing how to carry a protest sign. No, I don't think Dems really care if people do well as long as they keep voting Dem. At least not the ones in charge.
"guess which party likes a lack of regulations (which results in profits)? It aint Democrats."
Oh, you've got that right. They want to tell you what you can eat, how much fat, when you can eat meat, how much insurance you have to buy, how much you have to pay to cover for the people that went to one of their city schools because they can't earn enough to cover their own health care. They've got regulations for just about everything, but when it comes to enforcement, they become suddenly blind with regards to their friends. Acorn. Barney Frank. Planned Parenthood. Charlie Rangel. All the regulation in the world isn't worth much if they are unwilling to enforce anyone who signs on to their bill of goods.
Despite how it seems, I'm not cutting anyone slack. I know that a lot of Republicans have been participating in this debacle. Bush kicked off this bailout mess, and he shouldn't have. And Obama and congress shouldn't have continued it. But the really big blunders in the past eight months, including a 700 billion dollar stimulus for almost no jobs except government jobs, cash for clunkers which will basically increase the price of used cars and all cars for years to come, discouraging business growth and recovery, all of those things have great big liberal fingerprints on them, and none of the ones in Washington are owning up to it. From Obama to Pelosi to Reid, they aren't responsible for anything. They think the entire mess started with George Bush and they are just innocent victims. Well they are not innocent and they are not victims. The tax payers are, and they still aren't doing anything that will improve the situation. It's time for Washington to get a few adults.
Between Bush and Obama, Clinton is starting to look like an angel.
Yeah. Well, except for the perjury. And the suborning perjury. And the tradition of destroying anyone who disagrees with them, a tradition that the Obama's fully embraced. And... well, never mind.
Dont have time to play right now, but, Gary, you forgot to mention Illegal Aliens, otherwise I think you hit all the talking points.
Well, time for a couple of things:
"You mentioned that they have not had any real power since 1994. The act was passed in 77."
Seriously, are you telling me that a 30-year old law had more effect on the collapse despite over a decade of Republican power to alter it? That the relaxation of banking regulations and the money-making schemes that popped up in response werent the problem, but the people who took advantage of them were?
" People were loaned money based on the fact that other people probably wouldn't loan them money. Because they had not demonstrated good skills. A lot of people who "qualified" didn't have skills or a decent job."
I can interpret this two ways:
1) They've been making bad loans all along, and 30 years worth of loans all managed to survive through the various recessions of the last three decades to collapse coincidentally not long after relaxation of regulations and the repeal of Glass-Steagal.
2) Poor people shouldnt get loans because they are poor. They are lazy and have no self-pride (especially the darker ones), and so cant be trusted to pay them back because unlike people who were born with money, they just dont understand the value of hard work, especially since the kind of jobs they always have are so easy (a child could do them, right?).
Well, that's it for me, I'm getting off the merry-go-round. Tell yourself you've won, and I'll get on with my life. I find myself missing crabby old Uncle Logician; at least he argued using his own ideas, not conservative think-tank created pablum.
Dave,
So sorry that you don't have time to play. It's always so much fun to work with people who have no idea how to construct or rebut logical arguments. Well, time for a couple of things...
"Seriously, are you telling me that a 30-year old law had more effect on the collapse despite over a decade of Republican power to alter it?"
Seriously, are you telling me that you have no idea of the difference between statements of fact and rhetoric? Here's at least one: Statements of fact can be used to establish or rebut arguments and have value doing so. Rhetoric, such as the statement that you made, does not.
And you also mis-stated my position. I do believe that the relaxation of regulation was a problem. The relaxation that was the problem, however, was the Dems relaxing the standards for who should get loans and how credit worthiness should be determined.
"I can interpret this two ways:"
I can interpret it one way: People who were not worthy of credit for home loans should not have gotten home loans. And guess what: History has proven me right! The people who got home loans who should not have defaulted by the hundreds of thousands. And the government used our money to help many of them out, and they are defaulting again. If you really have the urge to play Santa Claus, how about risking your own money and leaving the rest of us out of it. Oh yeah, that's right...liberals have a poor record when it comes to charity, and secular liberals even worse.
How about this: If you would really like to discuss points, why not try to discredit the points that I actually make? I mean I know that puts a lot of pressure on you. It's much easier to discredit me when you are supplying what you think I am saying, but it's so laughable.
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