Originally Posted By Darkbeer Note, the author, Kevin Hassett, is director of economic-policy studies at the American Enterprise Institute. He is also an adviser to Senator McCain. <a href="http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSKSoiNbnQY0" target="_blank">http://www.bloomberg.com/apps/...oiNbnQY0</a> >>The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.'' What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets. If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed. But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter. That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.'' << >>Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess. <<
Originally Posted By alexbook So Chris Cox didn't have anything to do with it? Then why does McCain want him fired?
Originally Posted By Kar2oonMan Pretty much any WE post by Darkbeer is going to laud everything the GOP does and barf all over the Democrats. It fools no one, sways no one, but he keeps at it for reasons known only to himself.
Originally Posted By alexbook If we're cutting and pasting, let me paste something from Alan Abelson's column in Barron's (not exactly a liberal mouthpiece) on the Freddie/Fannie rescue: >>The worst credit crunch and housing collapse since the Depression have sprung in no small measure from an unprecedented regulatory negligence encompassing a number of governmental and quasi-governmental satrapies, from the Federal Reserve on down. Yet there's not an iota of interest by Paulson and his fellow pooh-bahs in compiling a scroll of shame that might apportion the blame, clearly illuminate the sources of our present discomfort and, just possibly (and here we confess to being naive) act as a deterrent to future delinquents.<< <a href="http://online.barrons.com/article/SB122125851023830067.html" target="_blank">http://online.barrons.com/arti...067.html</a> Republicans have made a fetish of deregulation, and it's coming back to bite us all.
Originally Posted By utahjosh <Pretty much any WE post by Darkbeer is going to laud everything the GOP does and barf all over the Democrats. It fools no one, sways no one, but he keeps at it for reasons known only to himself.> Couldn't the same be said about a lot of the anti-Republican posts on here? We already know that Darkbeer's posts are going to be positive toward the GOP anyway, 2oony. Your post is more redundant than his.
Originally Posted By Sport Goofy << In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed. >> This is an outright false statement. In order to operate as GSEs, Fannie and Freddie were required to have strict requirements on the mortgages that they purchased. They were not in the market for the unconventional loans, liar loans, and other crap being packaged by the investment banks and mortgage brokers. Fannie and Freddie were ultimately done in by the decline in housing prices that brought down the entire mortgage industry -- but precipitated by the unconventional loans being packaged up and sold by the investment banks. If the investment banks had been under any type of regulation, Fannie and Freddie would have done just fine continuing to sell conventional mortgages with lending standards. The GSEs couldn't survive amidst the onslaught of foreclosures and rapidly declining home prices that affected the value of all mortgages, even though it was the unconventional ones that caused the system to unwravel.
Originally Posted By Kar2oonMan >>We already know that Darkbeer's posts are going to be positive toward the GOP anyway, 2oony. Your post is more redundant than his.<< That's true. I should leave him to this stuff. It is pointless and unworthy of attention.
Originally Posted By DAR When you walk into the Magic Kingdom, you know that you're going to Cinderella or Sleeping Beauty's Castle. It's kind of the same thing with a DarkBeer post, you know what you're getting.
Originally Posted By Kar2oonMan I know. It's like asking Baghdad Bob to be at least a little bit fair. LOL
Originally Posted By gadzuux It's knee-jerk defensiveness. Stuff is hitting the fan, so try and indemnify the republicans from any accountability. We see it all the time. The question is why? Is their loyalty to their party greater than to themselves? It certainly seems so. Rather than try to "blame the democrats" wouldn't it be better to focus on the people most responsible? Crazy notion, huh. The extra irony is that conservatives have been deriding democrats as "socialists" for years now. Yet it's the GOP that's emerging with these 'socialistic' solutions to the problems of their own creation.
Originally Posted By Sport Goofy Even George Will, the ultra-conservative columnist, described the administration's rescue plan as Socialist. It was fun watching him on This Week -- he didn't have a positive thing to say about any of it and you could tell it was killing him to not be able to back the GOP administration on this. At least he's honest and doesn't just support the part line for the sake of supporting hollow rhetoric.
Originally Posted By gadzuux CNN poll: GOP takes brunt of blame for economy; Obama gains <a href="http://www.cnn.com/2008/POLITICS/09/22/cnn.poll/index.html" target="_blank">http://www.cnn.com/2008/POLITI...dex.html</a> WASHINGTON (CNN) -- By a two-to-one 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. That may be a contributing factor to an apparent increase for Sen. Barack Obama over Sen. John McCain in the race for the White House. In a CNN/Opinion Research Corporation survey out Monday afternoon, 47 percent of registered voters questioned say Republicans are more responsible for the problems currently facing financial institutions and the stock market, with 24 percent saying Democrats are more responsible. One in five of those polled blame both parties equally, and 8 percent say neither party is to blame. The poll also indicates that more Americans think Obama, the Democratic presidential nominee, would do a better job handling an economic crisis than McCain, the Republican presidential nominee. Forty-nine percent of those questioned say Obama, D-Illinois, would display good judgment in an economic crisis, six points higher than McCain, R-Arizona. And Obama has a 10-point lead over McCain when it comes to who would better handle the economy overall. These numbers seem to be affecting the battle for the presidency. Fifty-one percent of registered voters are backing Obama, five points ahead of McCain, who is at 46 percent. McCain and Obama were tied at 48 percent apiece in the previous CNN/Opinion Research Corporation survey conducted September 5-7.
Originally Posted By ecdc I was just about to post that, gad It looks like most Americans disagree that Democrats were responsible.
Originally Posted By Mr X ***I know. It's like asking Baghdad Bob to be at least a little bit fair.*** Tucker Bounds is not on trial here!
