Bloodless Coup

Well, you know, it's just a Democratic witch hunt.

Riiiiight. I forgot the talking about how if you claim an investigation is illegitimate you can't be expected to appear before it.

You know with that rule in place it really is a miraculous thing that we have record-breaking numbers of people in prison at the moment. Don't they know about the investigator is of a different political party rule?

The lawyer in me imagines telling a client who doesn't have the weight of a presidential campaign and a cowed media on his side: "Don't try this at home." Un-f*&king-believable. I'd really like to see someone at the debates ask Palin what about the composition or approach of the investigators, or what about the nature of the investigation itself, transformed a welcome opportunity to get the unimpeachable (ahem!) truth out into the open into a political witch hunt. As far as I know, not a single individual has been added or subtracted to the group with whom Palin and all her employees were going to cooperate.

I just hope they go ahead and release their report in October. Based on the information already out there, it sounds like they have enough. And if she wants to be obstructionist, fine, she just doesn't get to tell her side of the story. Lots of defendants don't take the stand.

Not that you'd be interested in her side of the story, but Palin says they're cooperating and willing to continue cooperating with the board that oversees hiring and firing of employees. I can't understand why anyone wouldn't want to testify in front of a political sideshow. I'm sure they wouldn't end up like Libby and get sentenced to years in prison because one reporter contradicts their statements. Surely not. And I'm just as sure that one of the three people Obama had vetting his VPs, former head of Fannie Mae, is heading to Washington right now so Democrats can rake him over the coals and get the truth, because they're not about political cronyism. And Gorelick is in line right behind him.

"I can't understand why anyone wouldn't want to testify in front of a political sideshow."

First, as noted again and again, legislatures checking the executive is how American government is supposed to work. Want a model? Look to the United States Constitution. It was designed to ensure precisely this sort of oversight. So are you not a patriot? Why do you hate Constitutional government?

Second, you're not answering the same question Palin's not answering: she didn't contest the nature or personnel on the inquiry before, and as far as I know, nothing's changed, except now cockiness can sink not only her but the GOP's presidential hopes as well.

Third, on what basis does the First Dude get to resist a legislative subpoena? On what assertion of privilege? He's a private citizen of the state of Alaska, who is flouting an order issued by that state's legislative body. Again: sheer lawlessness.

And as for Libby, take it up with a jury of his and your peers. Historically, juries decide who to trust. They can choose one witness on one side over 20 on the other. Indeed, innumerable destitute alleged non-violent drug offenders march tons of other destitute witnesses into court to match up with one or two official witnesses. I don't hear you citing that disproportion as evidence of injustice in the criminal system.

But then they deserve it, right?

Also, while I don't know the nuances, as a general rule I don't think a board that exists to evaluate hiring and firing decisions of public employees is either tasked with, or equipped for, the investigation of allegations of serial abuses of power that happen to feature, inter alia, termination of public employees. Perhaps you think Clinton should have been investigated by the Employment Commission? Not that that investigation was "a political sideshow" or anything.

Moon,
Did somebody spit in your coffee? Really, I'm half tempted to agree with you, because testifying in front of the Alaska legislature is bound to be necessary practice for testifying in front of the Democrat Congress, and it will give her good practice collecting her notes for when the Democrat Congress subpoenas millions of documents, as well as Karl Rove. Let them go ahead, because their payback for the Clinton investigations is going to get them just where it got the Republicans, back in the minority position.

The fannie mae scandal of 2008 is going to rock Democrat ambitions as bad as the Abramoff scandal hit Republicans, because their going to come off as contemptful, arrogant and venal in lecturing McCain who co-authored a bill to stop this very thing from happening. But you don't see Democrats investigating themselves, and you won't see it.

As far as the Palin thing specifically, it was supremely poor judgment for the trooper to taser a ten year old, and that his excuse is it lasted less than a second, makes him look so much worse. When this comes out, people are going to respect Palin for doing what she does, being responsible enough to fix the problem. If the Democrats want to make it an issue, it's their funeral.

Again Morris talks around an issue instead of defending blatantly improper actions. Moon's right - this is "sheer lawlessness". How that is remotely conservative is beyond me - as is how it's deemed acceptable in a constitutional republic.

The fannie mae scandal of 2008 is going to rock Democrat ambitions as bad as the Abramoff scandal hit Republicans, because their going to come off as contemptful, arrogant and venal in lecturing McCain who co-authored a bill to stop this very thing from happening.

Nope.

That story will have no traction, Moon, mostly because it has become clear in recent days that McCain doesn't even understand the scandal. How could he possibly have been prepared to 'solve' it singlehandedly?

If there's a partisan story that emerges out of the smoking wreckage of the last few weeks, it will probably be the SEC's bizarre decision to lift leverage limits on the big 5 investment banks in 2004.

But really, Obama only has to point at Phil Gramm and talk about deregulation to get all the traction on this story he needs. It will likely be someone's funeral, but I suggest you learn a little bit more about what actually happened before you try to push this in support of McCain.

And forget Palin -- nobody serious is ever going to respect her again. Her political future in America will be effectively over in 3, maybe 4 weeks max -- if it isn't over already. I presume you've seen recent polls and all.

Sorry, there was supposed to be one more link in that last. Polls for Palin.

"But really, Obama only has to point at Phil Gramm and talk about deregulation to get all the traction on this story he needs."

Unless, of course, McCain points out how Democrats like Schumer were pushing for deregulation in 2006:

"With the benefit of hindsight, the Sarbanes-Oxley Act of 2002, which imposed a new regulatory framework on all public companies doing business in the U.S., also needs to be re-examined. Since its passage, auditing expenses for companies doing business in the U.S. have grown far beyond anything Congress had anticipated. Of course, we must not in any way diminish our ability to detect corporate fraud and protect investors. But there appears to be a worrisome trend of corporate leaders focusing inordinate time on compliance minutiae rather than innovative strategies for growth, for fear of facing personal financial penalties from overzealous regulators."

Of course, I'd make the point that anybody who takes Schumer seriously is "nobody serious," to use your term. This started with Carter, continued with Janet Reno, Bush tried to put the brakes on in 2003, and

"The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets.

"The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems.

"I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole."

While I'd have to disagree with you, that McCain doesn't understand the problem, I would agree strongly that he doesn't understand it the way Obama does as he lectures the American people about what's best for them. CBS Business News sums up the situation in 2005:

"At a hearing in October by a House panel, after Fannie Mae's accounting woes came to light, Democratic lawmakers still staunchly defended the two companies against Republican attempts at tighter government regulation and turned their criticism against Falcon, who testified."

People know, you lose.

Er, that comment three spots above was directed at Morris, not Moon. That's what I get for posting when I'm not feeling well, I guess.

SOx doesn't have anything to do with the present crisis. Nothing at all. But thanks for playing.

FNMA internal compensation scandals don't have anything to do with the present crisis. Nothing at all. But thanks for playing.

McCain's attempt to pin the blame for the present crisis on FNMA and Freddie is complete evidence that he doesn't understand it and is just flailing around for some way to tag Democrats. They were latecoming, minor participants in the markets for securitized subprime mortgages, which securities are now at the root of the credit crunch.

There are several roots to the present crisis. Lenders with joke credit standards, ratings agencies that looked the other way, firms and investment companies that took on too much leverage, too many people trusting too many flawed quantitative models... lots of causes, but none of them a secret Democratic plot to deregulate the economy in the face of vigorous Republican resistance.

But thanks for playing.

As best I can tell (from newspapers/blogs), there isn't any one party, one piece of legislation, or any single cause of this mess. Sure, we've generally deregulated everything (and both parties participated in that: Reagan, Bush I, Clinton, Bush II), but this mess has more to do (I think) with banks (of all kinds) playing with complicated and risky financial vehicles built on real estate prices that became a bubble. Once the bubble burst, everything came down. It just took longer for this to hit than housing prices to fall, and while everyone can clearly understand the value of houses falling, seeing through this opaque mess is more difficult. Which makes it much harder for everybody to explain this to the man on the street.

That being said, I think the underlying cause isn't too complicated: the standard (now, clearly, risky) practices of 2002 - 2006 (which made people/firms tons of money) became commonplace, and everyone ignored the underlying risks as they hadn't manifested themselves (think: Californians who know that a major earthquake is coming, but don't really do anything about it - you just get used to the risk, and soon just ignore it). And don't forget the "herd" mentality here: if any single financial institution stopped doing any risky practice, the business would move to another firm (who would get richer, while the prudent firm would get poorer). This is sort-of a "tragedy of the commons" situation (everyone sees a problem but no one has a personal incentive to do anything about it, and any individual action to prevent the problem makes that actor personally poorer).

I'm much more worried about the "lets move quickly and not talk much about it" attempts to fix this than sorting out blame. Blame can wait until the crisis (is it a crisis?) has passed; fixes, however, aren't really fixes if we make things worse. For example: a ban on short-selling? If you think a company is mismanaged and/or idiotic, you can't take your own money to bet that it's stock will fall? You can only (legally) bet that a company's stock will go up? That doesn't seem very rational.

Baltar, the problem is that time really is of the essence. SecTreas probably has until 4 pm Friday to get this TARP thing figured out and approved before everything really goes down the shitter. We genuinely don't have tons of time for reasoned debate and/or partisan grandstandery.

The short-ban thing is stupid and, at first brush, indefensible. I have a theory about why they did it, but I'm reserving it until I dig around some more.

I'm willing to agree that there is time pressure. But you have to agree that doing the wrong thing (within the time frame) is worse than doing nothing. The wrong thing may extend the "time until catastrophe" (or whatever we're calling it), but it will make the catastrophe worse.

The crux of the criticism that resonates with me is the issue of the government buys bad debt. I thought the basic problem was that the markets couldn't figure out what debt was bad and what was OK. They couldn't untangle the various complicated financial vehicles, so the market was pretending that EVERYTHING was bad debt (thus, no lending, since one one had collateral). So how does the government figure out what is bad debt (and what its worth) if the markets can?

Best solution I heard was for the government to buy an equity stake (10%? 20%? No one knows that) in the failing banks. Banks get money to survive (and time to untangle the bad debt from the good) and the government isn't forced to make (likely bad) decisions on which debt to buy and which not to. And in the end, if the banks survive, the government can sell off their equity and make money.

What's wrong with that?

"I thought the basic problem was that the markets couldn't figure out what debt was bad and what was OK."

In some way this is the crux of the issue. When the Carter administration started this mess, it was with good intentions, providing affordable housing and preventing racist lending practices. But in forbidding redlining, they put the force of law behind the idea that lenders must ignore the distinctions between people from poor neighborhoods with riskier credit and people from rich neighborhoods with secure credit.

By 1997, Janet Reno had built up steam aggressively prosecuting this sort of thing:

"The third form of discrimination--'disparate effect'--never has been charged but shows just how far the Justice Department is willing to go to ensure that minorities have an equal chance of getting credit. Disparate effect is defined as an instance in which a bank's criteria are, on their face, neutral, but somehow have discriminatory results."

In the example cited by the article, Albank in the early 1990's "began to experience rising delinquencies and losses in the Connecticut portfolio." They were aware that because of insurance and defense cutbacks, this area was suffering economically. They revised their mortgage criteria to reduce their exposure, exactly what the free market compels them to do, and stopped making loans to urban areas with the highest number of delinquencies.

"But the [Janet Reno] Justice Department said there was 'no sound business justification' for Albank to exclude the seven Connecticut cities and southern Westchester County, and said the bank's geographic restrictions had 'both the purpose and effect of denying residents of identifiable African American and Hispanic communities an equal opportunity to obtain mortgage financing.' The Justice Department did not say Albank meant to discriminate, but when it comes to a charge of disparate treatment, 'whether the bank intended to discriminate or not is irrelevant,' Handly said.

"Ganje, the Albany attorney, added that even if Albank had accepted applications from those neighborhoods, it may have had to approve a certain percentage of them to avoid being labeled discriminatory."

So, despite the fact that "every local minority that asked Albank for a mortgage in 1992 got one," Albank and others like them were in the crosshairs of the Clinton Justice Department because they would not take economic risks. They were forced to settle, because in the words of Albank's attorney: "The truth is, no matter what the merits of the complaint, once you've been targeted by the Justice Department for a fair lending case, it's never worthwhile to fight," he said. "The cards are stacked against you."

This atmostphere of intimidation by the Janet Reno Justice Department forced lending institutions to make loans without regard to whether they were risky or secure, for fear of prosecution and a forced settlement, such as in this case "calling for it to make $55 million worth of low-interest loans to people in the Connecticut and Westchester County neighborhoods it was accused of slighting." This atmosphere discouraged evaluating loans based on risk, and its remedy was risky loans.

1997 was also the year that Reno's former second in command, Gorelick, found her way into the Fannie Mae corporgovernment, in which she ascended quickly to its top reaches. So Janet Reno was using a classic battle tactic of charging, while Gorelick was waiting in ambush, profiting off every single risky loan and settlement that ended up going her direction. There was no incentive to refuse a risky loan, there was punishment for it. And when the Bush administration in 2003 and McCain in 2005 tried to get a handle on it, they were lectured by Democrats, just as they are today.

Oh my God, Morris, you went there -- to the whole far-right "poor black people broke America!" line of argument.

I don't even know where to start, except to say that anti-redlining measures are not even close to being the root of the problem or even a major contributor to it, and as far as I'm concerned anyone who resorts to that line of argument forfeits his right to be taken seriously on the topic ever again.

Baltar, I have an answer for you, but it'll have to wait until tonight. Busy day ahead.

Morris, you have got to be kidding me. As with jacflash, I haven't heard a single word by anyone that loans to low-income or minority families are responsible in any way (small, medium, or large) for the problem.

If you have evidence that a disproportionate amount of bad loans are to minority and/or poor households, please provide it. I don't believe that evidence exists: as noted if we knew which loans were bad, we would be most of the way to solving the problem. Other than that, I would argue that you are very, very close to a blatantly racist argument. That's beneath you.

Wow Mo, I don't know what to say - who knew poor black people had such influence over the US economy! I'll third the critique of you post - that is NOT what's caused the current crisis. Not remotely.

I'll also throw in a governmental politics observation that your notion of a Reno-Gorelick tag-team cabal is highly amusing, given that they were far from the best of buds.

Here here! Kudos for finding a way, however, bizarre, to lay this all at the doorstep of the last two democratic administrations. It's like watching a numerologist turn some bureaucrat's shoe size into a detailed argument for why Hiroshima was the work of the Freemasons.

I'm confused as to how this is confusing. Lots of risky loans leads to more loans, the secure ones and the risky ones added. More home loans leads to less housing supply. Less housing supply leads to higher prices for available housing. Higher prices leads to rising adjustable rate mortgage rates. Higher adjustable rate mortgage rates leads to increasing number of defaults. Increasing number of defaults leads to worthless equity. Worthless equity leads to $700 billion to one trillion dollar clean up, broken down that's about $3,000 for every American to pay in taxes. But, yeah, I believe economic laws eventually trump affirmative action policies, and this crisis proves you're smart and I'm just a racist.

You forgot your own step zero, "all the risky loans were made to poor black people because the Democrats forced the banks to make 'em".

That's the part that shows your ignorance.

Not to mention the part where underregulated Plutocrats (individuals and institutional collectives) try to play alchemist by bundling a bunch of bad debt together into impenetrable instruments and passing them around like a hot potato until someone gets caught when the music stops. For the party that so loathes redistributionist policies, perhaps you can explain to me why my income should go to rich folks to protect their golden parachutes and forgive them their mistakes. I'd much rather allocate my own tax dollars, given a choice, to the working people who got screwed out of what little they were able to buy for themselves by deceptive claims and exploitative practices.

Seriously. The GOP's the populist party, right? And this is what they call a "clean" bill? The only thing "clean" about it is the getaway.

Anyway, I'm sure you'll be thrilled with the transparent "bail out" the Bush administration is going to ram down the country's throat as a parting gift. Best not let the robber baron's go broke, but, hm, the homeowners, well they should have known better.

I'm sure Morris will be thrilled with it, actually. Note how McCain is already maneuvering to blame Obama for it. Not that he has any better ideas or anything, of course.

Filed under "small favors," the voters aren't buying it according to CNN: "By a 2-to-1 ratio, Americans blame Republicans over Democrats for the financial crisis that has swept across the country the past few weeks, a new national poll suggests."

Hallelujah, my faith in American democracy is (marginally) restored.

"That's the part that shows your ignorance."

Jacflash, you're talking race, I'm talking economics. These were high risk loans, right? The Clinton Justice Department used the racial issue to force banks to make these loans. I'm completely willing to believe they did it out of corruptness, using race as a way to fill their own coffers. But it's not about why they did it, that's your focus, it's about what they did, punishing banks for not taking out risky loans. I can give a loan to a homeless guy because I believe everyone should have a right to money, but it doesn't make it a secure investment.

It may well be fascination with race by your party is what's keeping them from investigating something that potentially costs more than the Iraq war, because good intentions can't be shown to have bad results. Or it may be they made a lot of money, and they want to pass the check to us, with ten million dollar tips for executives. I know what they used as a justification, and that is race, but I don't know if that's their calculation.

"For the party that so loathes redistributionist policies, perhaps you can explain to me why my income should go to rich folks to protect their golden parachutes and forgive them their mistakes. I'd much rather allocate my own tax dollars, given a choice, to the working people who got screwed out of what little they were able to buy for themselves by deceptive claims and exploitative practices."

Your party asked for millions of Bush administration documents investigating everything Rove touched, and they aren't calling for investigations of Fannie and Freddie? They stalled Bush's oversight legislation and McCain's bill, and now you want to put Barney Frank and Chris Dodd in charge? And speaking of deceptive claims, maybe we can let Obama call for subsidies for people who can't pay their mortgages, because it's not like that screws working people who pay their bills, right?

And I haven't heard a poll like that since, what's the name? Oh yeah, Pravda! People are stupid, so they need the government to watch out for them, so they can get stupider and it won't hurt anyone, right? Lord knows your good intentions overcame economics with the mortgage crisis, right? I'm sure it'll work next time. It's due.

Morris, I'm talking the actual details of the present crisis, not race. Those loans aren't the root of the present crisis, and I defy you to produce data suggesting otherwise. Until you do, I'm labeling you ignorant.

And the Dems aren't "my party", but thanks for playing. The GOP was my party until they got all Bible-nutty and devoid of substance. I'm a party of one these days.

Just for you, Morris.

I'm going to limit myself to rebutting your response on reverse socialism, buying out rich folks too stupid to take care of their own money. Oh wait, you didn't respond. (And now, "Carter, and Clinton, and black people, oh my!" doesn't count.)

Jacflash,
If you've been reading my posts for the last several months, you know I don't like McCain. I was a Fred Thompson man, a Duncan Hunter man, but never a McCain man. McCain believes in man made climate change and a host of other things I don't. So, on those issues, he's the same as Obama, just as his manager (but not McCain himself) appears to be on this issue. McCain wants to surround himself with Democrat advisors like Cuomo.

But on some issues like this one in which he co-authored a bill to bring oversight to the Fannie-Freddie-gate scandal three years ago, his instincts are right, just like gun control and missile defense, because we don't want to wait to be hit by a nuke like we waited to be hit by an airplane. So I completely agree that my candidate would not surround himself with the people McCain surrounds himself with. However, we're not electing speechwriters like Axelrod, who I might vote for.

We're electing the candidates when they're off script, and I don't want someone in office who thinks that people in government are on a sacred mission to save the world, and so they should take private property through taxes because we're just $50 billion dollars a year away from ending world hunger, so give it to the UN because Barack's the first President who wants to end world hunger, and there's no way that aid workers are going to steal and sexually abuse citizens of the world on his watch, like they did in the recent past in Africa and with Oil for Food. That is the kind of narcissistic arrogance of which only an Obama Nation is capable, and I'm not a resident.

Sooooo Mo - since we are electing the candidates who are "off script", you think we are electing people who exist in the recesses of your mind, not those here on planet Earth? Gotcha. Your off-topic ramblings (like that last paragraph that's both insulting and deeply silly) suddenly make much more sense. Well, they don't make sense - but at least we know the assumptions you are coming from (some not tethered to real-world candidates it would appear).

But once again in going off topic you make threads such as this (or what it's morphed into) kind of pointless. Jacflash might've made an incorrect assumption about your candidate - but his point is that you have the causal mechanism of this crisis wrong. That's the substance that's come under discussion here (for some reason - it was meant to be a thread on the outrageous arrogance of the McCain/Palin team thinking that the law and transperancy in government are beneath them) - not some flight of fancy about the UN.

". . . I don't want someone in office who thinks that people in government are on a sacred mission to save the world . . ."

Unless by "world" you mean most of the Middle East, potentially Georgia, eh? You're literally incoherent, and, as Armand wrote, just offensive. And, while upward redistribution does seem to exemplify the ultimate goal of trickle down economics -- Trust us, just give it here, and it'll come back to you twofold, really -- you're still not explaining to my why every asshole who took known bad debt and called it good doesn't deserve to lose his shirt for his sins. Meritocracy my ass, Morris -- you're a feudalist.

And if we must talk about Fannie and Freddie, perhaps we can add William Timmons to the conversation?

I think if I pull the lever for Obama, I think I'm voting for someone who thinks that bibles and guns are what happens when people turn bitter. That was off script. Why do you think he didn't debate McCain in town hall meetings? He's afraid to go off script. Why do you think it took him a week to come up with anything to say about Fannie and Freddie-gate besides blatant lies about McCain supporting deregulation when in fact he co-authored a bill that would have brought more regulation? Because he's not smart enough to articulate his ideas, he has to wait for Axelrod or whoever else may be behind the curtain to play Gepetto.

Of course since he lied to scare seniors about McCain putting their money in the stock market, lied about McCain being best buddies with Rush and lied about what Rush said, it seems the one thing that may come natural is to lie, and to deny. That isn't the Tony Rezko he knew, that isn't the Father Phleger he knew, that isn't the Reverend Jeremiah Wright in a million dollar house he knew. So, yeah, I think we get the truth when the candidates go off script.

And I have addressed the causal mechanism, I don't know if I have to cite Kos or Huffington for you to believe it, but my explanation stands. If you think it's wrong, present something more complex than "it's those rich white people on wall street" and I might think about it. But no one here has given a better explanation as to what it was that caused the loss of equity, and I don't think the Democrat Congress is calling for an investigation to find out; they want three thousand bucks from every American and no oversight, and they'll get back to us when that isn't enough. Bush in trying to protect the institution of the government from further public confidence erosion is going along with them.

Where are the investigations? How many hearings did we have to hear about Iraq? They're asking for roughly the same amount of money, but if this were investigated (and reported), it would lead to an Abramoff type scandal for Democrats, people would become turned off from government, and opportunists would come in promising to serve certain populations because people will lose faith in the ideal of a government that serves the country.

Because this type of thing happening, we have a guy who's been in the senate for three years getting half the public's support to be President. The media created a hero out of a guy who can't present to us one close friend or working associate who doesn't hate American. We are on the threshold of a despotism, of a government run by people who think the most patriotic thing a person can do is to trust them with more taxes or to be a social worker, a cog in a beaurocracy, and if you ask people about Obama's Audacity, his vision for America, they say that Obama's book talks about how teachers should be able to retire and make a hundred thousand dollars. How visionary, how bold.

Moon,
I love how you like to make it seem like I'm saying something I'm not, even when I'm guessing you're smart enough to know I'm not, that makes it make sense how you support Obama and supported the guy who isn't sure how to define the word "is". There are certain things individual people cannot do, that's why we have a military, foreign policy, etc. I think you know this, but you're acting ignorant, so I'll meet you where you are if it pleases you. These things are what government is supposed to do.

But it's a far stretch from saying we're safer in a world full of democracies and it's our foreign policy to make us safer, to go to the point where a person says it's government's job to make sure every retired teacher makes a hundred thousand dollars a year, as Obama says in his book. I missed the chapter where he talks about professions that don't deserve to make a hundred thousand, I'm sure he'd list soldiers, but who else should not make a hundred grand, or is it that he wants to devalue our currency such that there's a hundred grand that's not the hundred grand Obama knows, which would fit.

He and Michelle talk about how they want people to become cogs in a beaurocracy drowning in so much paperwork created by other beaurocrats that they can't do their jobs. He wants them to serve government through beaurocratic civil service. So, he wants them to be his army, and he wants to pay them enough that they'll fight for Barack, because Barack got them a job and a raise. Is that in the Constitution, somewhere in the back mabye that I missed? I know some fine social workers, but to say that a nameless cog in the system is what people should strive for, that there's nothing more important a person can do than care for others in a maternalistic way, that is the nanny state. But is it patriotic?

What's the problem with being a patriot by being successful in business? Barack says that it's white men's greed running a world in need, that's his Audacity of Hope. We've heard this before, and you can call Godwin if you like, but this is how certain people born in Austria talked about the Jews running the world, how everyone was their victim. But since it's politically (if not biologically) correct to tear down the main component of our cultural system, nobody calls him a racist. You're too busy calling Hillary supporters racists, calling McCain supporters racists, calling anyone who points out the economic consequences of economics based on social policy a racist, like you and Jacflash called me a racist.

When did research become racist? According to the last Democratic "justice" department, you're absolutely right, because anything that demonstrates a disparate effect is racist, so knowledge is racist if it doesn't lead to the conclusions drawn by the white hating unifier Barack, if it doesn't say banks should base their loans on risk rather than race. You have turned Dr. King's judge people by the quality of their character and not by the color of their skin into judge people by the color of their skin and not the quality of their character, and you're calling me a racist. And according to your poll, you're getting away with it. But disparate effect is okay when it works in your favor.

Morris - Let me know when the shuttle lands b/c this ... I don't even know where to start. Wow. Just wow.

Obama is just a dumb puppet of David Axelrod? All his friends hate America? He is a white-hater?

O-M-G.

Good grief, Morris. Take a moment to wipe the spittle off your monitor.

"they want three thousand bucks from every American and no oversight"

Ahem, that's actually the Bush-Paulson, pass-it-right-now-or-you're-a-traitor plan. The Dems are trying to hold things off long enough to make sure that the government, nee the taxpayer, gets something for its $700B, which the Bush-Paulson crowd evidently is content to give away to the institutions that got us into this mess without asking for anything in return. The Dems are trying to ensure that the people who sailed us onto these rocks -- even most repubs are smarter than to blame on bad inner city mortgages -- don't walk away without paying any price whatsoever, and that the people victimized

I mean, are you seriously arguing that, because some poor folks got mortgages you don't think they should have gotten, that that excuses private investment houses from creating unhedged, smoke-and-mirror devices under which manifestly bad debt, when combined with more of the same, somehow becomes good debt? Is there a single economist with tenure, anywhere, who thinks it's all the poor folks and Clinton, and that the investors are all just suffering victims of a vast charade perpetrated by Democrats (presumably while they took time out from their constant, unenviable task of healing the economy from the damage done during the prior, "fiscally conservative" GOP administration). This is as ridiculous as proposing to fix the economy by eliminating earmarks, which is something like saying you could avoid foreclosure by probing your sofa for loose change.

Oh, and what was that you said about Timmons? How about Rick Davis; he's also buds with McCain, and a biiiig fan of Fannie and Freddie? Anything? No? Pity. When one lives in a Fannie Mae house, one would be wise not to have your heedless shills throwingt three-year-old votes. Ditto when you were investigated by the Reagan-era Congress for your ties to the last big fiscal scandal you might be careful claiming to have found religion on regulation (and in all sincerity, I'm not even sure what McCain's religion is, with regard to regulation right now, and I'm pretty sure he doesn't know either).

For the love of God, could someone please recruit an intellectually honest, non-tool conservative to join these discussions! It'd be a nice change of pace to debate these truly historical occurrences with someone possessed of more intellectual rigor than a Chatty Cathy doll. I tried, but probably in part because of the inanity of these threads, he indicated that he wasn't interested.

Another rat is swimming for his life. When are you going to jump in, Morris?

Moon,
So, you're seriously arguing that the fault lies not with a Clinton Justice Department that punished prudence and remedied with risk, it lies with the brokers who tried to get rid of these loans by selling them to other brokers? Excuse me, Karl Marx wants his manifesto back.

And I love how you jumped on people for months who talked about Obama's guilt by association, but you're completely willing to ignore that three major players in the Obama team ran Fannie Mae into the ground when they bought up all this worthless equity and collected millions in bonuses for their trouble, as you attack McCain for his advisors. I don't know why I have to repeat this so many times, McCain is not my man, but Obama's worse. McCain came up with a plan to combat this three years ago and Democrats didn't pass it, just as Bush did a couple years before. But what's Obama done?

The article your cite links to describes conflation as the problem; it's not really risky loans, because the banks making these loans are not the majority of the bad equity problem. But, if what Baltar says about banks not even being able to tell good paper from bad paper are true, we must assume this critique in misleading in that nobody knows where the bad loans ended up, so the bad loan made by a particular bank could be bought by independent mortgage companies or brokerages who could sell it to someone else. If the problem had not become systemic in this way, it wouldn't be as widespread as it is. But most people according to the poll don't bother to read the fine print, right?

It confounds me, this assumption that in one of the best educated countries in the world, we don't think our people are smart enough to understand the word adjustable, their weak and vulnerable to "predatory" bankers. I can't wait until they come out with the articles about genetic math problems being prevalent in those "victimized" by the evil "corporations" willing to lend them tens of thousands of dollars.

Armand,
Have you listened to Phleger, Wright, even his wife? When someone says we deserved 9/11, that our chickens came home to roost, how is that patriotic? What is it that drives Michelle if she'd never been proud of America, but she wanted Barack to run for President? And now Barack wants his supporters to get in our face? That rings of intimidation, hardly a democratic ideal. What does it possibly mean that white folks' greed runs a world in need, if not that whites are responsible through faulty character for the exploitation of everyone else?

Mo you said all of his friends hate America. That is 100% wrong. And if you want to say that you are more patriotic than Wright, who's a veteran, that's your business - but it hardly seems relevant given that Obama has clearly distanced himself from Wright's controversial comments. And the constant harping on one bit of wording by Michelle Obama is downright silly. In the first place much like Wright and that other guy she's not running for anything, and secondly I think it's reasonable to interpret her remarks on that one occasion as showing she had a new pride in America than saying she'd always hated America - b/c the latter is just pretty stupid. But in any event, what you said was that all his friends hate America - and that's stupid and insulting.

As to your final sentence, once again you are running with your interpretation - which is hardly the only possible interpretation.

And jacflash is probably best suited to respond to your other stuff - but you do realize the Clinton administration left office 8 years ago, right? Even if this ruling was key (something that looks far from true to me) to the crisis - ummm, don't the forces that've been running the government for the last 8 years have more than a little responsibility? This didn't happen in 2001 or 2002 or 2003 ... much less in the 90s.

Bro,
As you well know, beaurocracies don't change overnight. It took four years for the Clinton Justice Department to start punishing risk, and it took the Bush Justice Department three years to figure out how to change it, but I guess they shouldn't have been concerned about, ya know, other things in, say, 2001 or 2002. That's the predisposing condition, inflated home prices, adjustable rate mortgage rates going up.

Then you have skyrocketing oil prices the last two years, food inflation b/c of that, poor people can't afford to make payments on their homes because they're spending so much moor money on gas and eggs. That's why the article linked to by Moon is so laughable, it talks about a new wave of "responsible" loans to poor people because of the Clinton Justice Department, that could have nothing to do with the current crisis. Only in liberal America could somebody believe that a person's economic situation, how muh money they make, could have nothing to do with their economic situation, how much money they can pay back.

And still your San Francisco liberal apologists say, "it's Bush's fault, Karl Rove, Haliburton." They saw it in a Michael Moore movie, so it must be true. This is just one more example of how liberal fantasyland ignores economics, the importance of supply in oil and allowing the housing market to run based on risk and incentives. People on your side of these issues actually believe only supply side economists think that supply of oil relates to price, so it shouldn't surprise me that they think the non-racist Wright's "RICH WHITE PEOPLE!" on Wall Street are to blame for this crisis. And I'm sure someone who says God Damn America is patriotic, to liberals, because he's a veteran. Maybe he was just like the liberal veteran Jack Murtha, who falsely accused US Marines of murder on the House floor because he read about it in Time magazine.

So high fuel prices (partially the result of Bush's war), and high food prices (partially the result of ridiculous DC subsidies) play into this - fine - but the banks which actually carried out these policies aren't to blame, instead it's the fault of something General Reno did a decade ago and the Bush administration was too bound by "the bureaucracy" to fix her horrible acts? Riiiight. The Bush administration was more than happy to obliterate bureaucracies that displeased them in several cases - so are you arguing that in this one they were too incompetent to do it, or what?

And btw, who is this "San Francisco liberal apoligist"? It sounds much more like the ramblings of a wacky lackey of the Right to me.

Morris, in case you're wondering when bemused indignation, prompting me to engage what modest bits of sensical political discussion I could glean from your even-for-you extraordinary rantings the past two days, gave way to a tedium defying giving a shit about trying to peel you away from your ill-informed, economically, socially, and just generally empirically unsound blather, it was when you used the phrase "San Francisco liberal apologists."

Believe what you want. If you're lucky, for your own sake financially (if in no other regard), your voting inclination will not prevail.

God speed.

Armand,
If Citibank sends me a credit card with between 10% and 28% interest, and a ten thousand dollar credit limit, does that make them "predatory" and me a victim? No, it makes me put it in the shredder, because I make an informed rational choice that it's too much interest to pay, knowing that it could skyrocket up to 28%. The only point at which I become in liberal terminology their victim is when I make a choice to use the card. But if it's my choice, how am I their victim? This is obviously a case of insane "ramblings of a wacky lackey of the Right," yep.

Actually I was using the phrase to refer to your 8:52 post (obviously).

And when some banker bundles 15 of those confiscatory accounts together and sells opaque fractions of them off to other investors, without material details of each, that's not diversification or hedging, it's throwing money down a well. If investors hadn't bought up that debt in such dubious fashion, less of it would have been given out. And the principal reason such devices could even be created in defiance of all common sense was insufficient regulation.

Five years ago, perhaps, the bad debt could have been purged in a more modest adjustment. But somewhere along the line, people who ought to know better started believing their own bullshit about the deceptive devices they were peddling amongst each other.

But then, if poor people weren't so stupid, everything would have been fine.

Poor people didn't lever out LEH to 40:1. Poor people didn't give those shitpiles AAA credit ratings based on highly dubious risk modeling. Poor people didn't, for that matter, cause most of the defaults that are most of the problem here.

Middle class folks living at the ragged edge of their means did. My town here is full of them. This area wasn't anybody's idea of a redlined loan district. All those people making $80k a year and living in $450k houses and driving $45k cars and counting on the every-18-mos mortgage refi against 10-15% annual increases in the home appraisal to keep all the balls in the air are the biggest part of the trouble, along with the loan officers and mortgage companies that devised ever-more-dubious products to keep feeding the monster. Most of those folks, on all sides of those transactions, are white. Many are Republicans. And lots of 'em are screwed right now.

There are eight houses in my neighborhood for sale at the moment. There's never been more then one for sale at a time in the 10 years we've lived here. Those eight houses have been on the market since April, along with one other that sold in July. Every few weeks the prices come down another 10 grand or so, but nothing's moving

That's not Clinton's fault. That's not the fault of San Fransisco's liberals. That's the fault of the American people, folks, and to some extent the mortgage-market regulation (or lack thereof) that let those products happen.

It's also to some extent Alan Greenspan's fault, as he (with the absolute best of intentions) plowed so much money into the credit markets right after 9/11 that rates went right down to zero, meaning that any placement of money -- no matter the risk -- was likely to generate profits. Add that to the acquisitive cultural tendencies already in motion and boom, a BMW in every driveway -- at least until the credit pendulum swung.

I [heart] my cheap house and paid for car. By the way, jacflash, Patrick was still going strong at 265,000 when donated to an impoverished cook/college student. Didn't pass inspection due to rust holes, but ran strong.

Well Mo, from the Couric interview it appears Palin believes in PREDATOR lenders (and I'm guessing she doesn't mean that in the drone on movie-killing-machine sense) - just pointing it out.

Binky, Patrick's successor (the blue BMW) is up to about 165,000 miles now. I suspect he needs a head gasket but he's still reliable everyday transportation. He will likely be similarly donated next spring sometime.

Armand, there you go with your elitist schlock again. Grammar is just another way to keep good Americans down.

Binky, how big does a rust hole have to be to fail West Virginia inspection!?

"Ooooh, I'll try to find ya some and I'll bring 'em to ya."

Oh.

My.

God.

And who in the world decided it would behoove the McCain camp to project a "Great Depression" in the absence of immediate action? Is that how a President gets what he wants? Oh, wait, that's right, it's how Bush got what he wanted. I learned it from you, Dad.

Where to start?
Jacflash,
Patrick is the name of a starfish, not a car.
"Poor people didn't give those shitpiles AAA credit ratings based on highly dubious risk modeling."
Okay, so why don't we charge these guys with fraud if they committed a criminal act, and if they ran a business based on dubious risk modeling, let it fall down, unless that dubious risk modeling was adopted in reaction to legal mandates requiring dubious risks to be treated as secure loans for fear of disparate effect prosecution.

"Most of those folks, on all sides of those transactions, are white. Many are Republicans. And lots of 'em are screwed right now."

Why do you always look first at the color of skin, J? It is a mess, that's why this needs to be investigated. But let us not stop investigating at the threshold of Janet Reno. My fiance and I had to pay an extra hundred a month in insurance when our home value skyrocketed up, and those home values won't come down until we let people's mortgages foreclose. Only then will home supply adjust, followed by price, as it is on its way to doing. But if Democrats in Congress keep everyone with an ARM in their homes because they got screwed by "predatory" lendors, there is no market correction because supply never comes back up.

"That's the fault of the American people, folks, and to some extent the mortgage-market regulation (or lack thereof) that let those products happen."

McCain cosponsored a bill for more judicial oversight in 2005, it's in the record, but you still blame Republicans and support Obama. Intellectually honest, much?

"It's also to some extent Alan Greenspan's fault, as he (with the absolute best of intentions) plowed so much money into the credit markets right after 9/11 that rates went right down to zero, meaning that any placement of money -- no matter the risk -- was likely to generate profits."

So, I'm company X and I borrow at a one and a quarter percent interest rate after Greenspan lowered it. Do I throw my money anywhere, without regard to risk? Maybe if I'm an idiot. If I'm smart, I still find the investment most likely to yield the highest rate of return, or the one least likely to yield the lowest rate of return, if I'm thinking security. You're saying that people would invest willy nilly, which isn't true. They'd be more likely to borrow and invest, but they're still guided by market profits, and they'd still avoid risks. Worthless equity comes only when people cease to avoid risk, in this case under threat of a court settlement requiring them to take otherwise untenable risks.

Armand,
I can't help the hopelessly populist voices speaking to McCain, but they're no different than Obama's. He's the one who actually did something three years ago to reign in this process, unlike Obama who hired Raines and company to run his campaign.

"And the principal reason such devices could even be created in defiance of all common sense was insufficient regulation."
Moon,
I love ya. Were it not for you, I wouldn't come up with neat snippets from the Seattle Times from 2004, like "Raines believes he can show that regulators were aware of and approved of the company's accounting practices until the White House got involved." Bush administration: 1, bloated beaurocracies: 0.

Ummm, Mo, Raines does not run Obama's campaign. I'm not aware of him even being affiliated with Obama's campaign. Rick Davis on the other hand LITERALLY runs McCain's campaign. He is the campaign manager. Doesn't get more central to a campaign than that.

Okay, so why don't we charge these guys with fraud if they committed a criminal act, and if they ran a business based on dubious risk modeling, let it fall down, unless that dubious risk modeling was adopted in reaction to legal mandates requiring dubious risks to be treated as secure loans for fear of disparate effect prosecution.

The risk models were inside the securities firms, well after the mortgage transactions were completed and completely independent from the credit approval processes around the mortgages themselves (that's the part you claim is all Janet Reno's fault). You really don't understand any of this, do you?

You want to know why the risk models sucked? Here. Read. Learn.

I keep bringing up race because you keep making racist arguments. Knock it off and I'll stop bringing it up. Not even your president is spouting this shit.

And dude, stop being so quick to put everything in a box. Patrick can be a starfish, a racecar driver, a nice chef in Michigan, and yes, even a car.

Fist sized (to Moon).

Patrick was a car, a 1988 Honda Prelude Si, which was bought new by my dad (and named by him - my parents name all their cars) late in 1987 and passed from him to me to Binky over the next 12 years or so, accumulating some 260k+ miles and a number of moderately entertaining stories in the process.

edit: Patrick went with me to FL! -ed.

I just remember trying to fix the damn clutch cylinder with Baltar one fine September day in Speedway, Indiana.

Damn. You got me there... I have no memory of that. But, no matter. A great car.

You weren't there... that was when Baltar and I went to the first US Grand Prix in 2000. We lost the clutch hydraulics just as we were nearing the parking spot. Fun times.

AH, I must have let him borrow it, given that his little rocket was approaching 100,000 under threat of belching turbo parts into its Wankel.

By the way, back on the last subject (which was in itself major thread drift from the original)... I meant to comment that Ta-Nehisi Coates has been covering the racism and banking issue.

Raines, Morris? Really?

Like I've said a dozen times in this thread, you've got nothing.

And to Binky: Yeah, props to Coates, who is looking pretty impressive in his new gig at The Atlantic.