David Harsanyi, writing for the Denver Post:
As we move towards a bailout in Washington, most of you have probably heard the canard that this mess was brought about by lack of regulation. This argument will typically include at least one dropping of the tedious cliché “unfettered free market†(I wish they’d tell it to the over 75,000 pages federal regulation). When I ask these folks which specific de-regulation they’re talking about, rarely can they answer.
Republicans are being blamed by the public 2-1, that’s a political fact that John McCain must deal with, but here are the politicians who’ve gotten eight-digit contributions from the financial sector.
Hillary Clinton (D-NY) $31,040,714
Barack Obama (D) $27,942,613
John McCain (R) $26,593,411
John Kerry (D-Mass) $19,094,828
Christopher J. Dodd (D-Conn) $13,204,556
Charles E. Schumer (D-NY) $12,795,946
Harsanyi goes on to embed the “Burning down the House” video (on my suggestion: I have incredible pull with the mainstream press, provided I don’t charge for my services), which I believe everyone should watch and then forward along to those who may not be otherwise privy to it.
Because it isn’t just Fannie and Freddie and Lehman who are tied to Dems. We’re now finding out that WaMu, the latest big bank failure, contributed heavily to Schumer and (of course) Obama.
And even as the potential mortgage crisis deepens, Dems are looking to seed the bailout with largesse for their pet constituencies — then stand back and accuse the Republicans of obstructing progress. From the WSJ:
The House and Senate Democratic drafts contain an indefensible and well-hidden provision. It would mandate that at least 20% of any profit realized from the sale of each troubled asset purchased under the Paulson plan be deposited in either the Housing Trust Fund or the Capital Magnet Fund. Only after these funds get their cut of the profits are “all amounts remaining . . . paid into the Treasury for reduction of the public debt.”
Here’s the exact, amazing language from the Democratic proposal, breaking out how the money would be divided and dispensed:
“Deposits. Not less than 20% of any profit realized on the sale of each troubled asset purchased under this Act shall be deposited as provided in paragraph (2).
“Use of Deposits. 65% shall be deposited into the Housing Trust Fund established under section 1338 of the Federal Housing Enterprises Regulatory Reform Act . . . ; and 35% shall be deposited into the Capital Magnet Fund . . .
“Remainder Deposited in the Treasury. All amounts remaining after payments under paragraph (1) shall be paid into the General Fund of the Treasury for reduction of the public debt.”
What we have here essentially are a pair of government slush funds created in July as part of the Economic Recovery Act that pump tax dollars into the coffers of low-income housing advocacy groups, such as Acorn.
Acorn, one of America’s most militant left-wing “community activist groups,” is spending $16 million this year to register Democrats to vote in November. In the past several years, Acorn’s voter registration programs have come under investigation in Ohio, Colorado, Michigan, Missouri and Washington, while several of their employees have been convicted of voter fraud.
Along with other potential recipients of these funds, including the National Council of La Raza and the Urban League, Acorn has promoted laws like the Community Reinvestment Act, which laid the foundation for the house of cards built out of subprime loans. Thus, we’d be funneling more cash to the groups that helped create the lending mess in the first place.
This isn’t the first time this year that Democrats have tried to route money for fixing the housing crisis into the bank accounts of these community activist groups. The housing bill passed by Congress in July also included a tax on Fannie Mae and Freddie Mac to raise an estimated $600 million annually in grants for these lobbying groups. When Fannie and Freddie went under, the Democrats had to find a new way to fill the pipeline flowing tax dollars into the groups’ coffers.
This is a crude power grab in a time of economic crisis. Congress should insist that every penny recaptured from the sale of distressed assets be dedicated to retiring the hundreds of billions of dollars in public debt that will be incurred, or passed back to taxpayers who will ultimately underwrite the cost of the bailout.
The idea that special-interest groups on the left or right should get a royalty payment for monies that are repaid to the Treasury is a violation of the public trust. We’re told the White House and House Republicans are insisting that the Acorn fund be purged from the bailout bill. The Paulson plan is supposed to get us out of this problem, not start it over again.
Where Republicans appear to be looking (again: see 2003 and 2005) for solutions, the Dems are looking to reposition themselves for graft.
And yet the media, as Harsanyi points out in the Post, has managed to convince Americans at a 2-1 rate that Republicans are responsible for this mess.
I said it before but it bears repeating: we no longer live in a free society when, as a democratic republic, we are not being given access to the raw material we need to make informed judgments. Instead, we are a society being run by a giant propaganda arm of the Democratic party and its progressive base, one that, though we distrust, nevertheless continues to spin us in ways it finds “correct”.
(h/t Terry H and David Harsanyi)
****
update: More, from Dan.
Which is why many must turn to PJM (starring Jeff G!) and other “new” media sources for information. None to soon, either.
What I am wanting so bad my teeth hurt is for the Republican leadership to look the Democrats in the eye and say, “Very well. Pass. It. You have the majority. You have control. You keep telling us the American people want you in charge. Pass the damn thing.“
The holdup is Pelosi, Reid, & Company trying to get Republicans to cover their asses. That needs to not happen.
Regards,
Ric
methinks it’s time to write my congressperson and remind him/her just who it is they work for.
And dear John McCain – please point out these *earmarks*!!!
[…] G lays it down I said it before but it bears repeating: we no longer live in a free society when, as a democratic […]
The WaMu link I can’t make work.
In case you haven’t seen the summary video: http://www.youtube.com/watch?v=H5tZc8oH–o
After that video is sufficiently viral, do you think it will make the mainstream media’s ‘collective’ butt look partisan?
Ummmm…. JeffG
Gatewaypundit is running this video of House hearings in 2004 on Fannie Mae
Maxine Waters at .48 Mr. Chairman we do not have a crisis at Freddie Mac and particularly at Fannie Mae under the outstanding leadership of Franklin Rains
More jawdroppers throughout.
At 2.22, Dem. Lacy Clay declares “This hearing about the political lynching of Franklin Raines”
But was it a high tech lynching?
Does the difference between Senate Republicans (willing to go along with the Dems on Dodd’s bill) and House Republicans (unwilling to go along with the Dems on Dodd’s bill) merely boil down to their term of office and the fact that all the House Repubs face immediate re-election problems (where only a few of the Senators do) with the pubic hating the bill as it stood? Or are there more serious issues at hand here?
public.
[…] on the MSM and it’s not-so-secret propagandizing on the behalf of the Democratic Party, so I’ll let him finish this one up. Where Republicans appear to be looking (again: see 2003 and 2005) for solutions, the Dems are […]
Lynching? Racists!
Sdferr
The Senate, being a smaller body and each Senator has a longer term, gets to be more “clubbish” than the freewheeling House. But because the House was to be populated with citizen-politicians more immediately beholding to their constituents, all spending bills must orginate there. I think this is some of the natural friction between the chambers and one of the reasons Harry Reid came unglued and started lying about McCain… McCain found out that House Republicans were being totally shut out of the negotiations and he went to them, listened to their concerns, and brought them into the process.
cranky-d
Franklin Raines testifies on that vid that houses are “riskless”.
that clip should be in the next McCain ad
So the Senators feel more free to take a club to our heads, is that what you’re getting at there, Dar? :-)
Which is the point.
I know the WSJ isn’t the place to say it, but sitting there all “Oh why oh why?” when you damn well know why is unbecoming.
The world of “finance” can’t go on raking it in off taxpayers, which is how the vast majority of its money is made (the inevitable bailout in any “too big” case of “market” failure is its most-leveraged asset), without its — yes, its, dammit — “militant left-wing ‘community activist groups'” seeding the field.
Banks fund and lobby for laws to fund activists who agitate pliant — because likewise-funded — politicians to pass law X that leads to bubble Y contingent on bailout Z, again and again, world without end amen.
That’s the business model. There’s no “crude power grab in a time of economic crisis.” The potential severance of this perfected symbiosis is the crisis — the only real one. Keeping the circuit running is the bailout.
And it’s passing, with all this “crude” shit intact. The $26,593,411 Maverick will see to it.
It’s not like they don’t know.
TH4e only bad part from last night was that Mav didn’t work any of these facts, and especially the part about turning up the heat on Fannie/Freddie, into the discussion; to talk past the MSM, so to speak, and directly to the American people-a la Reagan…
I submit that this is not unrelated. Not at all.
Ace posted an interesting response from a reader who Got Religion about the seriousness of the failure of the credit market.
Like most people, I am not terribly enthused about the way Washington has gone into panic mode to hammer out a Something Anything cure that might well be worse than the disease (Smoot-Hawley tariff, anyone?).
They cite urgency, and as the guy at Ace’s says:
What I don’t understand is why we can’t all go into “Blizzard Mode.” Everyone just chills, literally, and makes like there’s a big week-long snowstorm that keeps us all home for the nonce.
Nobody expects anyone to show up for work. No one expects bills to get paid or meetings to be attended or deadlines to be met. The nervous little Chihuahuas on the floor of the NYSE (and the Asian and European markets) take a powder instead of reacting to the current situation by selling off all their stock and creating panic.
That would give Congress time to come to a better agreement instead of having to hurry hurry hurry so that there will be Good News or a reasonable simulacrum when the Asian markets open early Monday evening.
Caveat: I confess that I am an utter ignoramus when it comes to matters financial. Even when you explain it to me, I have no instincts or ability to understand how things all fit together, and what unravels when this or that thread gets pulled.
So please let me know why we can’t just take a snow day or days or week so that Washington doesn’t make things work.
Full LMC disclosure; I spent three years, 1995-1998, working on affordable housing. Part of my job was to contact local small businesses and members of the PTO have them agitate for the 1995 CRA expansion and the enactment in 1994 of HOEPA. The idea was that increased home ownership (in economically “stressed” areas) would help small business by increasing the market for services, increasing the take in local property tax (fewer potholes! I swear I actually said that) and turning an eyesore of an apartment complex into condos would reduce the number of transient students in the school distric, making your schools better. All bullshit, of course. The CRA expansion gutted HOEPA by giving low interest rates to people with bad credit. And when the low-income housing group I worked for rehabbed the apartments into condos, most were eventually bought by “investors” and managed by the low-income housing group as section eight housing.
The fun part was that the group I worked for was allowed to originate mortgages, and certain “investors” would buy those mortgages, only to eventually foreclose and end up owning the unit, which they then transferred to our management and we either sold it (origination fee!) or turned into section eight.
It sounds like a racket and it was, there were a million different programs that a low-income first time homebuyer could use to reduce the interest rate of their mortgage, I actually used one to buy my first house, (one of the many reason’s I left that job was that I still qualified for such a loan three years after I started) but it required a down payment, credit check and a job. There were programs to help you get all three, but the group I worked for, didn’t originate those loans. They were “discriminatory”.
I would use the same “American dream of owning your own home” line at my meetings they they are pushing now. The whole idea was that the government would bail out the organizations holding these mortgages from the very get-go. It was the will of certain groups for the government to guarantee every mortgage in the US. It actually one of my organizations goals.
End of rant. End of confession.
Just a clarification, in 1994 I wasn’t paid really, I was more of a…cough…community activist.
dicentra
No one expects bills to get paid or meetings to be attended or deadlines to be met
A skipped meeting isn’t much, nor maybe a bill a few days late, but if trust is lost that the meeting will never be held or the bill never paid, then the extension of credit (trust) goes out the window. It has a snowball effect (destruction of trust causes runs on banks, who then collapse). Many many small/medium businesses pay their workers on credit (based on accounts receivable). How long is a worker who has his own obligations going to go without a paycheck? And the small business guy, how long is he going to keep his doors open if he can’t get a line of credit based on his receivables, and does he trust HE is going to get paid when his customers can’t buy on credit?
It’s LIQUIDITY that’s the issue.
Which is why I’ve been secretly rooting for the failure of the rescue plan and a crash of all crashes. Real terror, genuine fear might just be the thing to re-animate the sleeping animal spirits to slap down their various bloodsucking arthropods (until they feel free to sink back to sleep and the bloodsuckers rise from the ponds again to rebuild their little empires).
@16
I was, of course, trying to be funny. However, I will inject that while the houses in question are not worth what was paid for them, they are probably not worthless either, especially since the Fed can hold the paper for years if required. The value will return as people start buying again. If they can buy the paper cheap enough, say 25 cents on the dollar (I am assuming the houses are only worth half of what was paid, and that half the mortgages will go into default), they can make money.
Last week I was more in the tank for the plan, but now I am less sure if it’s a good idea.
If it is true that credit is frozen all over, small businesses that depend on that credit will fail, and they won’t be coming back any time soon, if ever.
I should’ve refreshed before writing I guess.
LMC
The idea of helping low-income, or first time buyers, is not bad in and of itself, it is where it ignores their credit history.
Until my daughter got her RN she was a low-paid paramedic. But her credit score was over 720. She and her fiance just closed on their new home a few weeks ago with a very small down because they were first time buyers. But their income level and credit score demonstrated they could both service the loan and be trusted to make the payments on time.
Too much of the CRA was fraud waiting to happen because so many people gamed it as you outlined.
I haven’t yet been able to find out what percentage of foreclosures are people who had bought 2, 3, 4 or more homes on speculation (Interest only! No Down! No Income Verification!) thinking to flip them for a profit and just walked away.
“As we move towards a bailout in Washington, most of you have probably heard the canard that this mess was brought about by lack of regulation.”
There is never just one reason something like this occurs, except perhaps ‘human nature’.
A BIG contributor to the mindset of the Avaricious Swine who ran this pig into the ground would be ‘Voodoo Economics’. You know
‘let business do whatever the fuck it wants,’cause it’ll do the
RIGHT THING!!???!!!!.
Greed is good. (Gordon Geckso-world renowned humanist and benefactor.)
I was trying to tell people about alla this several years ago, but they really weren’t listening. Plus, RINOS excepted, the Democrats are the party of “The Military Industrial Complex,” to boot.
Google: ‘Warren Bonesteel CAIR, Democrats and Terrorism.’ and “Warren Bonesteel The Tides Foundation.” and more recently: ‘Advocates Call Iraq Marine’s Court Martial and Conviction Into Question.’
Follow the money. Do the research. This is a much bigger problem than you might think.
How long is a worker who has his own obligations going to go without a paycheck?
That’s what I mean. We take a week wherein no one has obligations. All debts are suspended, all non-vital businesses (not grocery or pharmacy or gas) close their doors, if they need to.
In other words, we all agree to freeze the liquid so that it’s not required to flow. We all hunker down for a week or a few days, then we start things up again.
Are people and businesses really in such straits that they can’t live a week without a paycheck? Even if the rent and the utilities and such aren’t due? They could still go to the store and use credit cards, or live off what’s in the pantry. We could close schools, too, so that people don’t have to drive their kids hither and yon.
As for the trust factor, if everyone understands that we’re all having a snow day or week until things get sorted out, it’s hard to lose trust in a particular individual or business when we’re all agreed on what’s happening.
Fair enough regarding the influence of contributions. What I don’t get, in reading this in conjunction with your prior post, is why it should be believed that the big swinging dicks of finance are heavily contributing to someone who is going to hasten the country’s descent into socialism. I’m friends with some of them, and I would not describe them as naive or low-information constituents. Are you thinking it’ll end up like Bacardi and Castro? I don’t see it.
Cleo lives in Biden’s alternate America.
yeah, a real surprise.
dicentra
the problem is you won’t get everyone to agree. There will be those (kinda like Raines) that believe the law/rule doesn’t apply to them.
“Greed is good. ”
Just ask ACORN
is why it should be believed that the big swinging dicks of finance are heavily contributing to someone who is going to hasten the country’s descent into socialism.
Not all people who engage in capitalism are capitalists. If they can buy the good graces of someone who will, by legislative legerdemain, hamstring their business competition and guarantee their “profit”, then they’re on board.
And for some, it’s called paying off the guy with the power to destroy you … “Nice business you got here, shame something should happen to it.”
“And yet the media, as Harsanyi points out in the Post, has managed to convince Americans at a 2-1 rate that Republicans are responsible for this mess.”
‘All perception is selective’. The mean old media have finally worm-turned on y’all because they are not immune to the same ‘conservative fatigue’ the rest of us have been enduring for 8 years. You can predict their need for fresh eyes on the body politic.
http://www.cbsnews.com/blogs/2008/09/26/politics/horserace/entry4482028.shtml
Words of wisdom, after the horse has left the barn…….from SEC Chairman Chris Cox;
“The last six months have made it abundantly clear that voluntary regulation does not work.”
That’s what I mean. We take a week wherein no one has obligations. All debts are suspended, all non-vital businesses (not grocery or pharmacy or gas) close their doors, if they need to.
In other words, we all agree to freeze the liquid so that it’s not required to flow. We all hunker down for a week or a few days, then we start things up again.
Sorry to be blunt, but that is pure magical thinking. Groceries and drugs and gas essential and therefore exempt. What about refrigerator repairmen? Milk doesn’t keep long at room temperature. Auto parts? Gasoline is not much good when your radiator hose splits… Ad infinitum.
“Real terror, genuine fear might just be the thing to re-animate the sleeping animal spirits to slap down their various bloodsucking arthropods”
That reminds me of a quote I used a few days ago.
“Let all the poisons that lurk in the mud, hatch out.”
From “I, Claudius” when Claudius decides he will let Nero be the next Emperor in hope of crashing the whole system to bring back his beloved Roman Republic. Didn’t work too well.
“You can predict their need for fresh eyes on the body politic.
– They may need it, but with O!, and his Socialism buddies, new is not what they’ll get. What they’ll get is old time Chicago precinct politics, and an even more faux based economy, where money is printed and handed out “compassionately”, and sometime in the future we’ll be right back at the same pop stand listening to the Dems argue for 1.8 trillion to bail out the “free luncher’s”.
– Maybe the only way to teach that Socialism is a complete dead end is to let everyone live in dirt holes for awhile.
This just in…
If your business is “under capitalized” to an extent that on a regular basis you have to borrow funds in order to meet payroll, your model of operating is an epic failure. You deserve to go out of business, Hell -you ARE out of business NOW, you just don’t know it.
More importantly, you can’t turn back the clock. Even if this sham of a “bailout” passes, those loans these businesses were counting on to fund payroll won’t be available. The lending models have already changed- you’re fucked.
Additionally, the other canard being passed around the net is the Phill Gramm connection to securitization of the mortgage market- This is total bullshit- a big fucking lie.
Home mortgages have been securitized and sold like bonds since the 70’s. Progressives are taking the spike in sub-prime mortgage lending from 1997 through 2006 and correlating that with the Gramm-Leach-Bliley Act 1995, despite no factual basis to support this as causative. If anything the facts show that the GLBA strengthened the CRA ( but that is another story).
The point to remember is that securitization of mortgages has been around for a very long time.
“Maybe the only way to teach that Socialism is a complete dead end is to let everyone live in dirt holes for awhile.”
Ironic that socialism is being invoked by the Capitalists who choked on their own vomit.
As a practical matter (“dirt holes”) I’m advising y’all to get a stash of junk silver for purchases during the new Dark Ages precipitated by the ‘trickle-downers’.
Coffee, salt and sugar should be purchased and stored for trading purposes.
#33 Comment by Darleen on 9/27 @ 2:11 pm #
What gets me is how someone can be that stupid without it being deliberate.
big business backed by government guarantee is, well, you figure it out. Or just read your Bellamy.
“Ironic that socialism is being invoked by the Capitalists who choked on their own vomit.”
– Complete and utter bullshit. Both sides of the aisle, ever since the Carter admin, has steadily increased the “compassionate society” nonsense, and its hand maiden, financial graft.
– There is absolutely no aspect of social give-away programs that is “capitalistic” semi-dork.
– Capitalism generates revenues and wealth. Socialism is a black hole that sucks up wealth, and replaces it with nothing of value.
– That wasn’t even a “nice try” you Marxist asshole.
38.
Yes, Cleo, which is why McCain pushed for oversight of Fannie and Freddie and the Democrats wouldn’t have it. Barney Frank thought it would work as long has he was awash in campaign cash from them. Same for Dodd and Obama.
The housing bill passed by Congress in July also included a tax on Fannie Mae and Freddie Mac to raise an estimated $600 million annually in grants for these lobbying groups. When Fannie and Freddie went under, the Democrats had to find a new way to fill the pipeline flowing tax dollars into the groups’ coffers.,
This can’t be stressed enough. The Fannie Foundation filled leftist organizations accounts with tax dollar and the members of those foundations and boards filled the Democrats campaign coffers in turn. Laundering tax dollars essentially.
They’re using a crisis to keep thier laundering operation of American tax dollars in tact.
All those white Republicans, fresh out of business school with shaky student loan payment histories, listening to Rush Limbaugh all day instead of working, donating to their houses of worship instead of paying their debts. These lily white, low income scum, buying fixer-uppers with no money down hoping to house flip their way out of having to take real manufacturing Redwing boot jobs, I place the blame on their lazy, white suburban upbringings.
‘Voodoo Economics’. You know ‘let business do whatever the fuck it wants,’ cause it’ll do the RIGHT THING!!???!!!!.
You’re almost there, Cleo. The voodoo part is right, and the blind trust that certain entities will always do the right thing given the chance is correct, too, but your aim is off 180°, as usual.
And my response grew too long for here (surprise!), so I posted it on my own site. See you there, cleo, if you dare!
Sorry to be blunt, but that is pure magical thinking.
I know, I know. It would have to be a Presidential mandate and stuff, and like I said, I’m no genius when it comes to economics.
But the fact that I understand them better than Obama should give everyone pause.
Significant pause.
If your business is “under capitalized†to an extent that on a regular basis you have to borrow funds in order to meet payroll, your model of operating is an epic failure.
Most small businesses are leveraged, whether it be payroll, or inventory carrying costs, What specific expense you assign the ‘borrowed’ funds to is really immaterial. Cash flow is what matters, and often this is purposely kept at the razors edge, especially in high volume, low margin business like food, drugs, and gasoline. In these businesses super lean and just-in-time is often the only way you ever turn a profit. Hiccups in cash flow are routinely countered with short term paper. Take away that paper and the whole high wire act comes crashing down. Fast.
Sure, call those businesses dead men walking, just don’t cry a river when you stop by for your Xanax and the doors are locked and the lights are out.
“Capitalism generates revenues and wealth.”
It was the Capitalists who saw the golden goose and decided to stuff it by selling, then re-selling bundled loans which they sold again, and again. It was complexity personified, but not because it needed to be; it was just easier to hide the character of these loans in order to heap more wealth upon the offending co’s.
And you call me an asshole……..try to get a grip on yerself.
Dicentra, it wouldn’t require a government mandate, it would take a magic wand.
Comment by Semanticleo on 9/27 @ 2:01 pm #
Do you speak English?
– No thor-boy, as usual you have things upside down. If your local gas station offered you 10 years of free gas, I’m just absolutely sure you’d turn them down, in the interests of the greater good, of course.
– Bullshit. You don’t blame people (I’ll skip your choice of racist epithets) who are given a chance at the brass ring, you nlame the people that had an agenda to buy fucking votes, and game a Ponzi scheme to garner campaign money all these years.
– That little bit of dirty business lies right at the feet of the “caring” party.
– Instead of playing CYA, you should be concerned about just how much of the truth will come out with this explosion of system. I don’t think your party would survive such an expose’.
– Above everything else, I personally hope that everyone finally see’s that there is no free lunch.
“I place the blame on their lazy, white suburban upbringings”
That’s becaause you’re an ignorant asshole, tore.
One who’s not good enough to lick the sand from my sons’s combat boots.
geoffb, all I can suggest in this instance is that you re-call (or read) any biography of Ben Franklin (as an exemplar only) and think of the contrast between his freedom of action and yours.
I’m not calling for any poisons at all, though no doubt there may be some we’ll be quickly rid of, if that is what you take my suggested animal spirits to be.
On the contrary, I’m thinking of free men acting cooperatively together, on their own and their neighbors behalf, to take back their lives from a full century and more of the encrustations and encroachments of excessive government and intrusion into their private affairs.
Comment by Semanticleo on 9/27 @ 2:57 pm #
Do you know….anything, asshole?
Do you know what scares me?
Creatures like seman and tore actually take a reactionary leftist like Obama seriously as a candidate and are going to vote for him.
The depths of ignorance on the left are astonishing.
– N.O’Brain….
– They’re too heavily invested. They can’t go back on it now. They choose to drink the Koolaide, and they’ll go to their graves with an impossible position.
– Willful ignorance is an ugly thing.
Dicentra, it wouldn’t require a government mandate, it would take a magic wand.
Oh, I’ve got one of those. Maple and mahogany, made by Alivan’s and still in fine condition.
So, what’s the correct spell? PETRIFICUS TOTALUS!
Dicentra:
The problem with the moratorium on bills and work is in the exceptions. It’s the Sabbath extended. Emergency personnel don’t get a sabbath, and they would be forced by their oath to work through the moratorium with no compensation.
And I don’t know how kindly swiss bankers and chilean grape farmers would take to the idea of “The check’s totally in the mail, dude, or if not, it will be sometime soon. If you need me, I’ll be playing World of Warcraft due to a hiccup in the system that exempts me from work. Pres. says so.”
Did it work?
Oh, and feets, I had to borrow back the < that I gave you. Bad close tag and all.
Folks, remember that “Semanticleo” has, on this very site, argued in favor of involuntary servitude. Given that, its contempt for the free market should be a given.
Thomas D,
It’s simple – higher prices for goods and services is long over due.
The reality I am addressing is that if your clients won’t pay enough to fund your business at margin that don’t require timely loans- even though they would presumably be willing to stand in the pouring rain to come collect their scripts- than you were never really doing business, you were just passing out credits and rearranging chairs.
The world of free credit is over. Raise you fucking prices, it’s time to do business.
“The last six months have made it abundantly clear that voluntary regulation does not work.â€Â
Because nobody understood that before now. No, seriously.
Cleo, there’s a useful fiction out there that the government and the free market are natural enemies  matter and anti-matter, oil and water, cobras and mongooses.
Supposedly, the government keeps the markets in check the way control rods at a nuclear power plant keep the fission from getting out of control and Destroying Us All.
That’s what I believed up until very recently. Most people believe it. That’s why we put up with the layers upon layers of regulation: we believe that we’re being protected from Something Worse.
But like Darleen said (“paying off the guy with the power to destroy you”), the government and businesses are often colluding to the benefit of the colluders but not the average citizen.
Microsoft and Wal-Mart used to have few or no lobbyists in Washington. But then the Justice Department went after Microsoft and the labor unions went after Wal-Mart. Now they have plenty of lobbyists because they figure that if the gubmint is going to mess with them, they’d better make sure they mess with them in a way that benefits them.
The ultimate collusion between the government and business is called “Corporatism.” It’s where the government says “you can do what you want and keep your assets as long as you support our political goals.”
Who invented corporatism? Why, I believe it was Benito Mussolini.
Again, the GOP is losing the battle because they’re not hitting back. This Rains thing should be on every station, in every state and at the end, it should say “FRANKLIN RAINS- Advisor to Barak Obama”.
But they won’t. The GOP are a bunch of wimps. I had to spend 8 years listening to the lies of the democratic party because the Bush administration was either to spineless to fight back OR they thought not responding to accusations of nazism and Hitler was “taking the high road.”
Dicentra, I think the closest thing to what you are describing may be the bank holiday ordered by Roosevelt soon after his inauguration. So in a way, it is not too far fetched, but scary too.
“It was the Capitalists who saw the golden goose and decided to stuff it by selling, then re-selling bundled loans which they sold again, and again.”
Sure, that’s what capitalists do. That’s what capitalists are supposed to do. This particular fuck-up is a symptom of government overreach. Plain and simple.
The FHLMC and FHLMC securities are not funded or protected by the US Government. FHLMC securities carry no government guarantee of being repaid. This is explicitly stated in the law that authorizes GSEs, on the securities themselves, and in public communications issued by the FHLMC. But that didn’t stop the government from passing laws that virtually forced banks to issue non-conforming loans to people who couldn’t pay them back now, did it? Usually Capitalists don’t need a law passed to get to a market, most of the time it’s reversed. Simply put, if a rapacious capitalist isn’t selling you something it’s because it’s a bad deal for the rapacious capitalist.
Trying to turn R’s into D’s in an internet forum when the Congressional record is on-line is a silly thing to do. You’ll have better luck at the barbershop.
There’s not a capitalist in the world that who believes business (or anyone else for that matter) should be left to do “whatever the fuck it wants.” And Gordon Gecko is a fictional character made up by a socialist film director. To call this mindset a strawman would be an insult to actual strawmen. It’s more like a cartoon of a strawman.
Don’t get me wrong. I understand your need for a villian; it stems from your unconsidered, mistaken premise that every social outcome has to be intended by someone.
Ford’s Iron Law of Government Intervention:
“Every time any government interferes with a market, it fucks it up.”
securitization of mortgages has been around for a very long time
Are we talking about PMI here? That magical first 20% ass pounding? We restored our house and had it revalued to get that monkey off.
But that comes with a cost too…. self worth, pride, consequences
“…every social outcome has to be intended by someone.”
“Truthers” have the same mindset.
It was the Capitalists who saw the golden goose and decided to stuff it by selling, then re-selling bundled loans which they sold again, and again
Actually fueled by INTERNATIONAL funds and economies that no longer wanted to buy US Bonds because Greenspan had slashed the interest rates. So they looked for something a little more profitable and supposedly just as secure. (There was an awesome episode of This American Life about all this in the spring. Worth a listen)
Ass shot here though… It was obvious even 2 years ago that things were a bubble. Prices had peaked, my shoeshine boy was giving real estate tips, 90% of the basic cable shows were about flipping… the tipping point really seems to have been when oil started to rise and everything else followed.
Dicentra 68:
That’s the problem with the narrative of magic regulation. Government oversight has always been a means of keeping competition one-sided. To borrow Ric’s Rule #2, it’s just a facade change on the market. Instead of constraining the market and keeping individuals honest, government oversight just makes it easier to conceal dishonesty. Either you can grease the palm of the inspector (FAA inspections of Southwest and American Airlines for instance) or if you happen to get an inspector who is principled, you grease the palm of his boss, etc. etc. If you have to, go all the way to the guys writing the rules. The chances are negligible of finding a legislator who is smart and/or honest enough to see through a well-presented (read spun) argument accompanied by a hefty campaign contribution.
As you progress up the ladder of palms, the option is only available to organizations large enough to marshal the capital needed, so it’s necessarily exclusionary to small businesses and most startups. The next step after large interests easing regulations on themselves is the realization that the greasy palms of corrupted regulators can now be turned to punish the competitors.
As Jeff implies above, the result is fascism, but the initial step on that road is the idea that regulation is a means of reaching competitive fairness. The road points to fairness at first, but veers sharply when it encounters the obstacle of human nature, and that hill ain’t moving.
In the current case of bank failures, we have regulators who looked the other way through legislation. It’s unfair to deny people home ownership. Next step, regulate banks so that they have to evaluate every home owner equally. Punish banks who don’t loan to high risk debtors. Banks see this and say, “What’s the easiest way to turn a profit?” Simply manipulate Fannie and Freddie into insuring the debt through greasy legislative palms. The shell game that followed, the buying and selling of fraudulent dividends, Thor’s $700 trillion, was the destructive frequency of the initial fraud harmonizing with itself and shaking the whole machine to pieces.
So string up the financiers by their toes, but don’t exempt the idiots who thought that it would be a good idea to put that big red self-destruct button on the dashboard in the first place.
>If your business is “under capitalized†to an extent that on a regular basis you have to borrow funds in order to meet payroll, your model of operating is an epic failure. You deserve to go out of business, Hell -you ARE out of business NOW, you just don’t know it.
Well, we might as well all get our guns ready.
Every business is leveraged to some extent. Every bank leverages cash 12X. The problem is the 30,40X garbage that wall street pulled off.
I work in mechanical maintenance. We have put on hold a number of jobs until next week to see if the organizations still exist. Literally.
Cash is king, unless you can’t withdraw it from the bank.
If the democrats in congress think they can avoid being hung from lamp posts by blaming the republicans, good luck.
Derek
The senior members of the Democratic caucus are no different than priests or pastors who fuck a choir boy or the deacon’s wife on Saturday night and then preach against the sins of the flesh come Sunday morning.
Have you ever forced yourself to listen to Harry Reid justify himself or his party? On anything?
I listened to Limbaugh relate the backgrounder to the “working meeting” at which the Republican senators were basically invited to bask in Barak Obama’s greatness, and oh, by the way, vote on the socialization of the U.S. Economy with us, so we can blame you for the unavoidable failure to come.
And they don’t see any problem operating that way. They are insane.
Think back to another Reid/Limbaugh episode- the letter, written on the stationery of the Senate Majority. Leader, to Clear Channel, in which almost every sitting Democrat senator threatened Clear Channel’s license for hosting Limbaugh’s show.
Limbaugh turned the event into a charity auction for the original, and ended up making millions for charity. What did Reid do?
He stood in the well of the Senate and took credit for a joint effort.
No shame. Shit, no guile. None needed. He’s insane, and so is Pelosi, and Frank, and Kennedy, and Waters.and we trained them to govern this way.
This latest episode? You’ve walked in on a man fucking your kid, and he tells you to get down and luck him clean. And you do, because it’s how things are done.
And he hope’s you’ve brought your check book, because this time it’s really going to cost you.
NO BAILOUT.
There is no credit problem. There is no liquidity problem.
There is no value in our society. No worth. And we have elected the worst among us to preside over the collapse.
TTBO. Too little, too late.
PHILLIES CLINCH NL EAST TITLE!!!!!!!!!!!!!!!
WOOOO-HOOOOOOOOOOO!!!!!!
Add the current banking boondoggle to the ticking timebomb of entitlement spending. Thank god we’ve got two pandering populists running. No way either one will tell 94 million constituents that medicaid and social security are going to kill the country with good intentions.
That’s real good, O’Brain. Real good.
I’m happy for ya.
dicentra
There was a commercial out where everyone is buying their stuff by swiping a card; then some luddite shows up with cash and mucks up the whole process. In that commercial things go right back to humming like a clock once the offender clears the scene but in real life people go elsewhere.
If your lemonade stand is closed for a day I’ll go elsewhere, if your lemonade stand is closed for two, I may never go back. Close it for a week and you’ll lose nearly everyone of your once loyal customers to the place around the corner and some will never return.
We are in an international economy and some US businesses would never recover from a shutdown. Others may survive, but emerge out of the wreckage a shell. Folks would get laid off and the ripple effect of that would get rolling and no one knows where it would end up.
this sounds productive;
<blockquote…House Republicans, who had not been meaningfully involved in the process until Thursday, when they announced they would not vote for the compromise bill first proposed by Treasury Secretary Henry Paulson, sent a high-ranking member of their leadership, Minority Whip Roy Blunt, R-Mo., who arrived to the negotiations carrying a tall cup of coffee….
House Ways and Means chairman Charlie Rangel, D-N.Y., currently the subject of an Ethics Committee investigation into whether he skirted taxes, made a surprise showing, joining Blunt, House Financial Services Committee chairman Barney Frank, D-Mass., Senate Banking Committee chairman Chris Dodd, D-Conn., and the ranking Republican on the Senate Budget Committee, Judd Gregg, R-N.H.
Republicans, who had wanted a five-person meeting with Blunt, Frank, Gregg, Dodd and Paulson, also saw the table fill with other Democrats inserting themselves into the process, including House Caucus chair Rahm Emanuel, D-Ill., Sen. Chuck Schumer, D-N.Y., Sen. Kent Conrad, D-N.D., Sen. Max Baucus, D-Mont., and Sen. Jack Reed, D-R.I.…
all the usual suspects who got us into this mess.
The Democrats could have passed their turd of a bill, and yet the pussies wouldn’t dare knowing Dodd’s bill was suicide.
Comforting.
I’ve tried to think of ways to clearly explain all this in simple terms.
I think this example is helpful.
Your Credit Card Statement.
The monthly bill lays out the APR, the total balance due, and the minimum amount due.
In most cases the minimum due amount is approximately 3% of the balance(sometimes less), even though the interest rate can be 7x larger.
People understand that by paying only the minimum that they are extending the term of the loan significantly, but what many don’t understand is how a “Bank” makes money when people only pay the minimum. The answer is securitization.
The banks could charge such a low amount in minimums due because they were also selling your debt (along with your history of payments on that debt) to other investors in the form of securities. Each year that this debt rolled over they would make a killing on the interest from these securities on top of the 3-5% that you repaid on the loan.
Fannie and Freddie adopted this model in sub-prime mortgage loans after it had been established as a valid structural financing method with car loans, credit cards and prime-loan mortgages.
According to the bookkeeping that I’ve seen, Frannie had 2.5% capitalization of all debts.
The policy at FM/FM was to continue only paying the minimums due, with no room for devaluation of any assets (mortgages, home prices e.g.) As soon as the housing prices began to fall, and refinancing mortgage loans became a non-starter due to the upside down note, FM/FM could no longer meet the minimum requirements and went bust.
The failure of this model means that all the securities that under-pin your credit cards, future car loans, student loans, mortgages, etc. are no longer a viable investment for the near future. Regardless of whether the Congress and President pass this 700(b) package- these loan models are gone.
The question we should be asking is, if this is the reality facing the US, what would be the best use of tax payers money right now?
I think the answer is to double-down on our commitments towards commercial banks, reassure the public that the FDIC guarantees are sound- even if they aren’t- and then offer Wall Street Insurance at discounted rates through the mechanism of a reverse auction.
If Monday’s Headlines read;
We’re All Investment Bankers Now…
It would be a mistake on a number of levels- although it would be cool to put Owner of J.P. Morgan 2008 on the resume.
/i>
Bah!
Victor
According to the bookkeeping that I’ve seen, Frannie had 2.5% capitalization of all debts.
The video I linked at #8 above and which JeffG now has as his next post has Frank Raines at 7:4t saying
whoops… 7:45
#58 Sdferr,
What I mean is calling for a cleansing by fire is dangerous. Once started fires burn where they will.
Add the current banking boondoggle to the ticking timebomb of entitlement spending. Thank god we’ve got two pandering populists running. No way either one will tell 94 million constituents that medicaid and social security are going to kill the country with good intentions.
No fucking shit. Just wait until Social Security taxes no longer cover payments and we open up that bullshit lockbox and find nothing but moldy IOUs to mail to oldsters. We are so fucked it’s not even funny.
Danger is a good, not an evil.
Speaking of danger, as I recall the Chinese character for “crisis” is a combination of those for “danger” and “opportunity.” Does anyone doubt which aspect the Democratic Party is focusing on in this crisis?
No, it isn’t.
fuck Chinese characters anyway
No, it isn’t.
Then ignore my nonsense.
I thought it made a lot of sense.
I understand that you believe that the fear of a collapse could motivate the public to take back the freedoms that have been lost over the years.
My point is the enemy we face here does not fear a collapse and thinks they will rise like a phoenix from the ashes of the destruction of our free market system.
In the economic realm the progressives resemble the Iranian mullahs who think ending the whole world will gain them paradise. Economic suicide bombers.
You can’t rule the wreckage if you are hanging from a lamp post.
They don’t think things through.
Not so much an abstract fear, I think, geoffb, as an actualized crash.
Think of the handy-dandy extreme example, 9/11/2001. Plenty of people had been warning for years of the threat of “asymmetrical warfare”, widely broadcast these warnings and ginned up a certain abstract fear in the halls of government and in the population at large. We saw the 1993 bombing of WTC. We saw the Kohbar Towers, the Cole, the African embassies.
I had it, that abstract fear of the unknown terror attack, though I couldn’t say where it would come from or what it would look like. And along come the airplane murderers and their murderous deed. This, this was very different from those other weak or faraway attacks.
Everything was said to have changed (and did, I think, for about a year and a half). What made that change, why did it seem to so concentrate the consensus of opinion to immediately go after those al Qaeda killers, even to accept Pres. Bush’s vow at the time (since abandoned, I believe) to treat nations who harbored terrorists as we would treat the terrorists themselves?
Something like that, is what I think.
Big business likes big government, hence the corporate media attacks on anyone who threatens the sweetheart arrangement. The original Progressive Party grew out of the Republican Party, then FDR wooed them into the Democratic tent with the corporatist New Deal.
See: http://www.youtube.com/watch?v=8L7txbm8S5Q
The only option I see, Jeff, is a march through the Left, training their guns on some more productive targets, and away from those truly seeking progress.
Perhaps it is merely that people tend to think more clearly, more broadly, more like their lives count on it when under the influence of a massive shot of adrenaline. It may be we are simply built that way in order that we can stay alive for another day to get our genes into the future somehow.
Or maybe something else can better account for the phenomenon, I don’t know. But that the phenomenon is there, of that I have no doubt.
N. O’Brain is emblematic of the problem. Typical (boring) “do you speak English” riposte followed by a “woot! sports!” diversion. And throughout, the culture of blame springs back into action to add useless weight to an already unbearable situation. America appears to be populated with dullards who only understand existential pain when their electricity is out.
…And I would argue that we have multiple means from which to get data and information and thereby form an opinion. I maintain we as a society are too lazy and distracted to do it.
I don’t think Bush is too blame for this, it goes way back..but I think most people blame Republicans because the President is a Republican. It is not fair, but I think it is that simple. In fact I don’t think most people even understand what the whole thing is about.
It’s that very culture of blame which will subvert any bailout. What a country.
Sderr,
This may be a difference in our basic natures.
I have friends who love the rush of adrenaline. Seeking it in things like roller coasters. I however hate it. I will and have faced danger but I do not seek it out. It holds no charm for me and is only an thing that must be overcome on occasion.
“They don’t think things through.”
Agreed. That is why we always see the overreaching and striking too soon.
Thank goodness the left is so much “smarter” than their enemies. But even an idiot can wreck things. Building takes the smarts.
Case in point.
“But even an idiot can wreck things. Building takes the smarts.”
Yep.
Any idiot can throw a molotov cocktail, or break a window at Starbucks.
Ask the same turd to make sewage flow downhill, and it’s a whole other ballgame.
My rant up there was meant to illustrate that the political class has long since ceased to operate in a cause/effect universe, because all the evidence points to the fact that there is NOTHING that is in their power – good, bad, accidental, motivated by Satanic orders from a Demon spawned out of Barney Frank’s ass, something found on a fortune cookie in the house cafeteria – there is NOTHING that falls beyond the realm of allowable or ignorable if they stay on script.
The Left has killed this country. When we wake up Monday with the bailout in place, the bastards will have put a few more yards of shag carpet in their cave.
They’ve fucking won.
cynn
do you have a real point, or is pissing in the punch bowl your posture for this evening?
Let me ask you… would you want a surgeon who mangled his operation on you to operate again?
“The last six months have made it abundantly clear that voluntary regulation does not work.â€Â
A rudimentary grasp of English would make it abundantly clear that voluntary regulation is an oxymoron.
I understand that you believe that the fear of a collapse could motivate the public to take back the freedoms that have been lost over the years.
Unfortunately, history shows that the chaos of economic (political, civic) collapse tends to motivate people to look for a strong leader to Show The Way And Restore Order.
It’s how the Taliban got into power, how Napoleon “cured” the Terror, and how we got the New Deal.
Darleen: the only punchbowl around is full of righty justification. I can piss in it or not; no difference.
Darleen: the only punchbowl around is full of righty justification. I can piss in it or not; no difference.
oops, sorry for the double.
We’re stocking up on ammo. Full-metal election!
Any Dumblicans thinks they can blame it on Democrats have got another buck-shot dream coming.
Personally, I’m sharpening the edge of my shovel, not that flashing the camouflage handle on my 10-inch butterfly-blade Swiss Army knife won’t scatter a hundred Redumblicans, but, you know, sanitary conditions might call for emergency measures.
I don’t know about no shovels. People will surprise you what they will do to take care of their families is all I think.
Happyfeet,
Could you please shoot me an email?
Thanks!
BRD
Lots of of people write about this subject but you wrote down really true words!