AMERICAN CONSERVATISM IN 2008 AND BEYOND

It is obvious to all but dedicated left wingers that the evidence clearly shows that the major cause of this downturn was the regulations put in during the Clinton era and supervised by the far left Voting fixer--ACORN- that forced the lenders to give mortgages to the dregs of the earth--those that did not have even a 5% down payment. It is documented that these indigents often times were not required to verify their income because of the immense pressure that was brought by government regulators and left wing groups like ACORN.

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@genoves,

genoves is so fuk'g stupid, I'm not even sure why I bothered to "peak" at his last post. He thinks those people who shouldn't have qualified for a loan are at the bottom of this crisis. Any bank stupid enough to loan money to anybody without the means to pay it back are the real stupid ones; just like genoves.

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It is obvious to all but dedicated left wingers that the evidence clearly shows that the major cause of this downturn was the regulations put in during the Clinton era and supervised by the far left Voting fixer--ACORN- that forced the lenders to give mortgages to the dregs of the earth--those that did not have even a 5% down payment. It is documented that these indigents often times were not required to verify their income because of the immense pressure that was brought by government regulators and left wing groups like ACORN.

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Ican wrote:

http://www.citizenjoe.org/node/125
...
What's the fuss?
In 2003, both Fannie Mae and Freddie Mac found themselves in hot water when the feds accused them of improper accounting - in the $9 billion range. This led to the resignation of both the chief executive of Fannie Mae, Franklin Raines, and chief financial officer of Freddie Mac, Timothy Howard.

As if that financial hanky-panky wasn't enough to worry lawmakers, some economists warn that Fannie and Freddie deserve special attention because of the shaky ground they sit on. Here's the idea: those economists say Frannie and Freddie do as well as they do because, although they're not government agencies, the market treats them like they're part of the government. Everyone knows that if Frannie and Freddie crumble, the feds will bail them out. That makes it safer to dole out riskier mortgages - but it also creates a mini housing bubble of sorts. In other words, the feds will probably rescue Fannie and Freddie if they crash, but knowing that the feds will do so increases the chances of creating a market bubble that will make them crash. (See this Washington Post article for more on their unique status and risk.)

To make sure Freddie and Fannie didn't go the way of Savings & Loans (the 80's Enron, which got bailed out by the feds), lawmakers are pushing a plan to give regulators more power to keep the GSEs on financial firm ground
...

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-1 Reply report Sun 1 Mar, 2009 04:57 pm Foxfyre wrote: 1 Reply report Sun 1 Mar, 2009 09:06 am Re: mysteryman (Post 3586697)
Actually he was. Everything was rocking along pretty well except for the artificially created housing bubble.

The U.S. economy would have gone through the inevitable cyclical recession as it always does and which it is necessary for it to do--there is always need for occasional market corrections, etc. as it is unrealistic to think that everything will just keep going up up up day by day with no retreats ever. That is, the economy would have done that IF the Administration and Congress had done their jobs and not forced the economy into false assumptions.

The extension of credit is not rocket science and certain principles apply whether it is a small amount or huge amounts; small scale or large scale. When Congress started tinkering with those principles, it was inevitable that the housing market would fail which started the dominoes falling.

The auto industry for instance would still have been precarious and sooner or later would have had to address the problems its own entitlement program had created, but if credit had not been cut off and the housing market collapse, the auto makers would have continued to sell cars and would have bought time to figure out some way to deal with their problems. The stock market cannot continue indefinitely with artificial values, but it too would have corrected itself much less disastrously if the housing bubble bursting had not created a disastrous free fall.

Had our government done its job with the housing market, we would likely be in a mild but not debilitating recession at the present time if we were in a recession at all.

The frightening thing is that the government is now attempting to do all the wrong things to repair the damage and, so far as I know, has not yet addressed the core of the problem that started it.

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@genoves,

Honestly, I have read thru this entire thread and many news and op/ed pieces since this financial crisis started. Given all this info I would be amazed that anyone with 2 brain cells to rub together would not at least say "you know, maybe there is something to this government meddling that just might have something to do with causing our current crisis". Certainly all on this thread would seem to have the requisite cerebral capacity, but yet we have posters here who will not even allow the slightest hint of this by way of their posts. Why?

We then hear greed as cause. Really? Government employee's or leader's efforts to blame age old human frailties for their failed policies merely suggest future "regulations" requiring that they study past failed policies but political obfuscations and media myths and truth denials have shown us that this, also, is a pipe dream. Greed has always been a given and since it cannot be eliminated must be wisely anticipated. The Founders dealt with it with simple regulations and the encouragement of competition. Recently, the best Republicans could do was to delay passage of Democratic social diktats to allow more time for public consumption and digestion. The only hope this country has for its continued productivity is in its citizens understanding exactly what more government control over the economy and their lives will actually mean in the future. This is the Republican challenge. If Americans fully understand and accept this move to socialism there's not much more MAC's can do. If the country decides to go the way of France we MAC's can only blame Republicans and their lost 8 tenths of a decade known as the Bush administration. For liberals thinking this is some kind of vindication of their proposed policies I would merely suggest they reexamine MAC's postings here as a corrective antidote.

Given, as above, that liberals are not stupid and all the evidence so posted above, the question remains as to why liberals would participate in the continued fantasy of the desirability of bigger and more intrusive government. They must then be perceived as rational agents with a personal stake in such an outcome of ever increasing power of government over the people it is supposed to protect. Are they politicians? Patronage employees? Who are these well informed clear eyed entities? They want to take all the power away from the individual citizen and concentrate it in their own hands--this they cannot deny without forfeiture of the results of heir reasoning. Is there a name for this concentration of power away from the many to the hands of the few?

JM

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@JamesMorrison,

JamesMorrison wrote:

....
Given, as above, that liberals are not stupid and all the evidence so posted above, the question remains as to why liberals would participate in the continued fantasy of the desirability of bigger and more intrusive government. They must then be perceived as rational agents with a personal stake in such an outcome of ever increasing power of government over the people it is supposed to protect. Are they politicians? Patronage employees? Who are these well informed clear eyed entities? They want to take all the power away from the individual citizen and concentrate it in their own hands--this they cannot deny without forfeiture of the results of heir reasoning. Is there a name for this concentration of power away from the many to the hands of the few?

JM

There are several names that have been used in this area, but possibly the best is authoritarianism. Human history is filled with the stories of rule by various elites, whether identified by rank in a tribal or religious heirarchy, birth or class, or a member of some self-appointed "vanguard of the people" as in the failed doctrine of Marxism. Plato examined this problem and proposed the "development" of a cadre of philosopher kings who could rule an ideal world. However even he couldn't find a way to reliably devvelop such people or even limit the effects of human nature among his philosophical associates and pupils.

Despite this Platonism is alive an well, even among many who profess skepticism about Plato's concepts. Indeed it is a central element of Liberal (in the American political sense of the word) political thinking, which typically looks for rational, government imposed or operated "solutions" to social, economic, and political issues - as opposed to the chaos of individual choice or the free marketplace of choices and ideas. Increasingly in American political discorse the notion of "solutions" to social or economic problems is itself implicitly restricted to government activity -- the absence of a specific government activity or regulation is taken to mean no solution at all, thereby excluding any possibility of individual activity or free choice providing a solution from the dialogue.

This presents a fundamental problem for MACs or conservatives of any stripe, in that they find themselves always arguing the negative or always favoring the same prescription of individual responsibility and free choice, while liberals get to entertain themselves and others with the "rational" details of this or that "plan". I believe this has a lot to do with the popular illusion (widespread in our media) that liberals are smarter or more sophisticated than conservatives. Indeed they are often filled with sophistry, but that is a very different thing.

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@JamesMorrison,

jm, this whole idea of greed by private companies, I have never been able to fathom how ignorant liberals seem to be in regard to human nature. As if they are not greedy? Fat chance. A certain amount of greed comes with human nature. Self interest or responsibility for self, is a good thing. If taken to the extreme without regard to fellow human beings, perhaps thats greed. But what is more greedy than demanding from others what you do not personally care to work for, which is a part of socialism.

And here is the really important point to remember. Competition keeps greed to an acceptable level. If business becomes too greedy, you can simply not buy from that business, go buy it somewhere else, or do without it altogether, or find an alternative product, there are lots of possibilities. At least there is a check and balance on greed. Not so with bigger government, as there is no alternative, you are forced to be subject to their greed for more power and money.

How many peoples lives, how much work, how many life's savings, how many people will have to be abused and ruined before we see the error of bigger and bigger government?

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@georgeob1,

georgeob, I don't think that's the issue at all; it's that MACs do not have a consistent message to rely on. If they want true conservative ideals, why don't they live them? I used to be a republican, because I also believe in self-sufficiency and less government intrusion. Show me any MAC president who has followed those conservative policies of strick constructionism, right to privacy, and federalism.

Most conservatives only cry about taxation and transferring of wealth from the rich to the poor. Class warfare doesn't even come close to what the conservatives should be "fighting" for.

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@okie,

Going back to Williams' essay, he explained it as well as I have ever seen it explained. The myriad processes--even tens of thousands of processes or many more than that--that go into putting a can of tuna on the shelf in the grocery store so that we can have tuna are each based on somebody maximizing his/her profits for his/her own advantage. Not one of those processes would be voluntarily accomplished if there was not an advantage to be gained or if there was no profit involved. But in the capitalistic world based on supply and demand, people all along the way make their own selfish contributions that result in a can of tuna made available to us to buy. It is not altruism that produces a can of tuna but rather people looking to their own interests.

Nobody, certainly nobody in government, can possibly think of much less understand all those processes and how they are interrelated or work together. Government interference with any part of the whole will likely have far reaching effects generally not in a good way.

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@Foxfyre,

One mans self interest trades something to somebody else for their self interest, and both profit, both end up better off. Any transaction in a free market requires at leat two willing participants, and to be willing, they each need to believe they end up better off, or with profit. Foxfyre, this is all so basic, and so logical, and in agreement with human nature, it is hard for me to believe we even have to discuss this. I think our educational system has utterly failed a generation.

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@cicerone imposter,

I hate to disappoint you, but the right to privacy is not in the constitution or bill of rights, ci.

But in regard to whether any Republican has adhered to self sufficiency or less government, good grief, please identify a Democrat that has even given lip service, let alone actually believing them and doing it? Republicans do actually give some lip service, but end up promising more stuff just to get elected, because Democrats are out-promising them virtually everything. And I remember Reagan actually began to try to eliminate some government, but was beat down by the Democrats, so spending continued unabated.

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@okie,

Because it is so pertinent, let's post it one more time (emphasis mine):

Quote:

Economic Miracle

The idea that even the brightest person or group of bright people, much less the U.S. Congress, can wisely manage an economy has to be the height of arrogance and conceit. Why? It is impossible for anyone to possess the knowledge that would be necessary for such an undertaking. At the risk of boring you, let's go through a small example that proves such knowledge is impossible.

Imagine you are trying to understand a system consisting of six elements. That means there would be 30, or n(n-1), possible relationships between these elements. Now suppose each element can be characterized by being either on or off. That means the number of possible relationships among those elements grows to the number 2 raised to the 30th power; that's well over a billion possible relationships among those six elements.

Our economic system consists of billions of different elements that include members of our population, businesses, schools, parcels of land and homes. A list of possible relationships defies imagination and even more so if we include international relationships. Miraculously, there is a tendency for all of these relationships to operate smoothly without congressional meddling. Let's think about it.

The average well-stocked supermarket carries over 60,000 different items. Because those items are so routinely available to us, the fact that it is a near miracle goes unnoticed and unappreciated. Take just one of those items -- canned tuna. Pretend that Congress appoints you tuna czar; that's not totally out of the picture in light of the fact that Congress has recently proposed a car czar for our auto industry. My question to you as tuna czar is: Can you identify and tell us how to organize all of the inputs necessary to get tuna out of the sea and into a supermarket? The most obvious inputs are fishermen, ships, nets, canning factories and trucks. But how do you organize the inputs necessary to build a ship, to provide the fuel, and what about the compass? The trucks need tires, seats and windshields. It is not a stretch of the imagination to suggest that millions of inputs and people cooperate with one another to get canned tuna to your supermarket.

But what is the driving force that explains how millions of people manage to cooperate to get 60,000 different items to your supermarket? Most of them don't give a hoot about you and me, some of them might hate Americans, but they serve us well and they do so voluntarily. The bottom line motivation for the cooperation is people are in it for themselves; they want more profits, wages, interest and rent, or to use today's silly talk -- people are greedy.

Adam Smith, the father of economics, captured the essence of this wonderful human cooperation when he said, "He (the businessman) generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. ... He intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain." Adam Smith continues, "He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. ... By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it." And later he adds, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."

If you have doubts about Adam Smith's prediction, ask yourself which areas of our lives are we the most satisfied and those with most complaints. Would they be profit motivated arenas such supermarkets, video or clothing stores, or be nonprofit motivated government-operated arenas such as public schools, postal delivery or motor vehicle registration? By the way, how many of you would be in favor of Congress running our supermarkets?

Walter E. Williams is a professor of economics at George Mason University.
http://www.gmu.edu/departments/economics/wew/articles/09/EconomicMiracle.htm

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@Foxfyre,

Foxfyre, this is the same conservative Walter Williams, a black man, that has the audacity to sit in for the hated Rush Limbaugh on numerous occasions. I have very much enjoyed his common sense and plain spoken facts in regard to the economy.

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@cicerone imposter,

cicerone imposter wrote:

genoves is so fuk'g stupid, I'm not even sure why I bothered to "peak" at his last post. He thinks those people who shouldn't have qualified for a loan are at the bottom of this crisis. Any bank stupid enough to loan money to anybody without the means to pay it back are the real stupid ones; just like genoves.

The banks were not stupid if they knew they could package these loans and sell them, and nor was it stupidity if they had to do it, as stipulated by your most favorite people, the federal government, Barney Frank, and company.

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@okie,

Yes it was stupid; you just don't understand how commercial transactions work in a capitalistic society. When you loan money to people who are unable to pay it back can't be too bright, or has any sense of business.

The problem has been that people like you ran our banks thinking they could continue to repackage subprime mortgage instruments to keep increasing profit when the original instruments were based on giving loans to people who couldn't afford the payments.

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@okie,

Nowhere is there evidence of banks being forced to make loans to people that couldn't repay.

Repeating that stupid thing over and over doesn't make it true okie. It only shows you are not interested in the truth of the situation. Fannie and Freddie bought loans from banks. They didn't package them for investors. Mortgage companies were the primary reason for the bad loan in that the majority of sub prime loans were NOT written by banks and were NOT purchased by Fannie or Freddie.

The problem lies in mortgage companies not caring because they sold the loans as fast as they were made and there was no oversight of the loans unlike banks.

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I guess the difference between Republicans and Dems in this thread is that the Dems have presented a causal chain showing exactly how the financial crisis happened. The Republicans have blamed the Government but presented no causal chain whatsoever. None of you has shown how the government 'forced' trading houses and AIG to purchase mortgages from anyone; none of you has shown how the market got infected by securities which normally it has nothing to do with.

No, just a bunch of blathering about Fannie mae and loans to minorities. That's where you'd rather focus your attention. Because, as I said earlier, it raises uncomfortable questions when you examine the truth of the situation.

Okie wins the award so far, with his dual comments of 'competition keeps greed in check (snort)' and 'everybody's greedy, including liberals, so what are they complaining about?'

When will any of you have the guts to confront this problem head on?

Cycloptichorn

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@cicerone imposter,

cicerone imposter wrote:

Yes it was stupid; you just don't understand how commercial transactions work in a capitalistic society. When you loan money to people who are unable to pay it back can't be too bright, or has any sense of business.

The problem has been that people like you ran our banks thinking they could continue to repackage subprime mortgage instruments to keep increasing profit when the original instruments were based on giving loans to people who couldn't afford the payments.

The stupidity is on the part of the federal government that mandated it, enabled it, or encouraged it.

If I could make loans to anybody and everybody without regard to them having to pay me back, because I could immediately sell the loan or package of loans for a profit right after making it, why not? If somebody had a carlot full of cars, and a loan company agreed to buy any loan they extended to any car buyer, regardless of whether they had a job or how much money they put down on the car, and the loan company became totally responsible for the loans, I don't know about you, ci, but I think that somebody would tend to take the loan company at its word and would sell cars like they've never sold them before. Call it stupidity on the part of the car dealer, but in my opinion it is a bigger case of stupidity on the part of the loan company.

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@okie,

okie wrote:

cicerone imposter wrote:

Yes it was stupid; you just don't understand how commercial transactions work in a capitalistic society. When you loan money to people who are unable to pay it back can't be too bright, or has any sense of business.

The problem has been that people like you ran our banks thinking they could continue to repackage subprime mortgage instruments to keep increasing profit when the original instruments were based on giving loans to people who couldn't afford the payments.

The stupidity is on the part of the federal government that mandated it, enabled it, or encouraged it.

The government did not mandate, enable, or encourage the repackaging of shitty securities as good ones, and the investment in these securities by trading houses and banks. Not at all.

Quote:

If I could make loans to anybody and everybody without regard to them having to pay me back, because I could immediately sell the loan or package of loans for a profit right after making it, why not?

Because it's a bad business model. You make cash right up until the point the pyramid starts to collapse. That's exactly what you have seen happen.

Quote:

If somebody had a carlot full of cars, and a loan company agreed to buy any loan they extended to any car buyer, regardless of whether they had a job or how much money they put down on the car, and the loan company became totally responsible for the loans, I don't know about you, ci, but I think that somebody would tend to take the loan company at its word and would sell cars like they've never sold them before. Call it stupidity on the part of the car dealer, but in my opinion it is a bigger case of stupidity on the part of the loan company.

Who is who in this example, exactly?

Cycloptichorn

1 Reply

AMERICAN CONSERVATISM IN 2008 AND BEYOND

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