Two weeks into Occupy Wall Street protests, movement is at a crossroads

I cited you a book and chapter from the 1990s where Krugman himself refutes your interpretation of what he said in the blog post you quoted.

He describes the Savings and Loans crisis, explains what caused it and what would have prevented it, and states that he thinks S&L is a model for the banking system as a whole. I encourage you to go to a library and read the chapter. (I'd copy&paste it for you, but I'm too lazy to copy&paste from a paper book.)

He denies absolutely that misguided attempts by government to steer mortgage lending to low ingome folks and to limit the customary down payment requirements tracitionally imposed by banks had anything at all to do with the Mortgage bubble and the subsequent collapse (primarily resulting from the large scale default on sub prime mortgages).

He resolutely denies that the profligate giveaway spending of the current administration can jeapordize our financial future and demands even more.

Instead he lays it all at the feet of evil members of another class.

Do the passages you are referring to contain anything that would refute my claim that the economic consensus underestimated the systemic risk (i.e. the very degree of need to regulate the market) broadly?

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He denies absolutely that misguided attempts by government to steer mortgage lending to low ingome folks and to limit the customary down payment requirements tracitionally imposed by banks had anything at all to do with the Mortgage bubble and the subsequent collapse (primarily resulting from the large scale default on sub prime mortgages).

You're goddamn right I do, because that's the exact truth, as I've pointed out to you many, many times. You've never provided a single shred of evidence to show that what you claim is true, with data showing that these programs were responsible for the collapse in any way.

And you cannot do so, because the plain fact of the matter is that the vast majority of sub-prime mortgages went to people in the upper and middle classes. Most of these sub-prime mortgages were sold by independent mortgage companies who were not governed by the CRA.

I believe that many accuse others of envy because they can't truly understand what motivates others, if it isn't the same thing that motivates themselves.

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He resolutely denies that the profligate giveaway spending of the current administration can jeapordize our financial future and demands even more.

In truth, my longstanding position on the matter has been that in order to get our financial books in order, we must both cut spending AND raise taxes. I've been saying so for years - you and I have had several conversations about exactly this - so I'm confused as to what you think you gain by misrepresenting what you know to be my actual position.

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Instead he lays it all at the feet of evil members of another class.

You use the word evil here in the same way that you often call Obama 'our sainted leader;' as an exaggeration designed to make your opponents argument look silly. However, It's not a substitute for actually making someone's argument look silly.

Cycloptichorn

Looks like they used Brookfield Properties to facilitate things for them.

And neither have you offered any supporting evidence for your rather obviously false contentions.

Now what does this rather strange and ill-defined phrase really mean? The fact is the CRA applied to all lenders and direct ed them to provide specified fractions of their loans in all zip codes to people reporting incomes below the mean. Moreover HUD guidelines to Fannie and Freddy specified minimum fractions of their loans to subprime borrowers. This is all a matter of public record.

There appears to be a direct correlation between the quality of subprime loans and the degree of regulatory oversight. Nondepository mortgage providers such as mortgage lenders and brokers are regulated by 50 different state banking supervisors instead of a federal body responsible for comprehensive oversight. Comptroller of the Currency John Dugan reported that these companies “originated the overwhelming preponderance of toxic subprime mortgages” and these loans “account for a disproportionate percentage of defaults and foreclosures nationwide, with glaring examples in the metropolitan areas hardest hit by the foreclosure crisis.”[12]

SEC. 803. For the purpose of this title--

(1) the term "appropriate Federal financial supervisory agency" means--

(A) the Comptroller of the Currency with respect to national banks and Federal savings associations (the deposits of which are insured by the Federal Deposit Insurance Corporation);

(B) the Board of Governors of the Federal Reserve System with respect to State chartered banks which are members of the Federal Reserve System, bank holding companies, and savings and loan holding companies;

(C) the Federal Deposit Insurance Corporation with respect to State chartered banks and savings banks which are not members of the Federal Reserve System and the deposits of which are insured by the Corporation, and State savings associations (the deposits of which are insured by the Federal Deposit Insurance Corporation).

(2) the term "regulated financial institution" means an insured depository institution (as defined in section 3 of the Federal Deposit Insurance Act);

CRA Analysis

The Federal Reserve Board researched whether the CRA played a substantial role in the subprime loan crisis. Its staff analysis of 2006 Home Mortgage Disclosure Act (HMDA) data and other sources concludes that the CRA did not contribute to or cause this crisis.

According to the analysis:

No major changes have been made to the CRA or its enforcement since 1995. The subprime crisis was triggered by poorly performing mortgage loans originated between 2004 and 2007. This chronological gap weakens the contention that the CRA is a major cause of the crisis.
Contrary to the widely held perception that most higher-priced loans were made to lower-income groups targeted by the CRA, 55 percent of higher-priced loan originations went to middle- and upper-income borrowers or borrowers in middle- and upper-income neighborhoods in 2005 and 2006.[14]
Only 6 percent of higher-priced loan originations made by banking institutions and their affiliates in 2005 and 2006 went to lower-income borrowers or borrowers in lower-income neighborhoods within CRA assessment areas (Table 2).[15] This was calculated by taking the number of higher-priced lower-income loans made by banks and affiliates in their assessment areas and dividing it by the total number of higher-priced loans made by these institutions. If the proportion were high, it would suggest that banks were trying to originate a large percentage of higher-priced lower-income loans in areas that would earn them CRA credit. The result suggests that banks were not trying to target these areas.


Mortgage purchase data counter the notion that the CRA indirectly created an incentive for independent mortgage companies to make higher-priced lower-income loans. In 2006, banking institutions bought only about 9 percent of independent mortgage companies’ loans; 15 percent of those loans were higher-priced loans to lower-income borrowers or neighborhoods.[16]
The CRA does not appear to have an impact on delinquencies. The Board report compared 90-day-plus delinquency rates of subprime and Alt-A loans in ZIP codes just above and below the CRA eligibility threshold.[17] If the rates were different between these types of ZIP codes, the data would suggest that the CRA might have an effect on delinquency rates. The rates were almost identical (Table 3).



Delinquency rates were high across all neighborhoods, not just those that were lower income (Table 4). While 90-day-plus delinquency rates of lower-income neighborhoods were the highest, these ZIP codes accounted for a relatively small share of all households—about one-fifth.[18] So, the incidence of foreclosure may be quite high in lower-income areas but not be a major contributor to the national foreclosure crisis.[19]

I don't presume to know your motives. However what you have written about them looks a lot like class envy to me.

You have also asserted that the magnitude of public debt doesn't matter. Even the tax proposals you and your, now badly deflated, "leader" wouldn't significantly dent our current deficits much less reduce our massive public debt and entitlement guarantees. You simply aren't being serious here.

Anti-Keynesians assured us that budget deficits would send interest rates soaring; Keynesian analysis said they’d stay low as long as the economy remained far from full employment. Guess who was right?

Also, there are some features of the approach that can be tested separately. Keynesianism isn’t just about sticky prices, but it does generally assume sticky prices — and there is overwhelming evidence, from a variety of sources, that prices are indeed sticky.

Also also: there’s plenty of evidence that monetary policy can move output and employment — and it’s very hard to devise a model in which that is true that doesn’t also say that fiscal policy can be effective, especially when you’re up against the zero lower bound.

Second, while we don’t have a lot of postwar experience with fiscal stimulus, we do have a lot of experience with anti-stimulus, that is, austerity — and that turns out to be reliably contractionary. Again, it’s hard to think of a model in which austerity is contractionary but stimulus isn’t expansionary.

This is a lie.

On a flight back from San Diego, where I've spent the last 4 days. They actually have their own little Occupy San Diego show going on here. I'm not good at judging crowd sizes, but I don't think there are more than a couple of hundred protesters involved. They've established a camp in some park and, from what I could tell, they conducted marches two or three times a day.

The entire length of their march is about a city block long, and it's past your window before you know it. Consists of mostly people in their 20s and 30s, dressed in hippy garb, and carying signs and beating drums.

No one in the city is talking about it, not even the cab drivers.

Sunday or Monday night a man jumped from a building and landed quite near one of the rallies. Don't know if he came down in the midst of the protestors, but it put an end to the show which then converted to a candle light vigil for the unfortunate fellow.

Looks like Wall Street got the cops and the mayor of New York to get rid of the protesters. I wondered how long it would take the powers that be to exert themselves. When the powers that be found out they werent going to give up the powers took action.

Facing Eviction, Protesters Begin Park Cleanup
By ANEMONA HARTOCOLLIS
October 13, 2011, 2:30 pm

Robert Stolarik for The New York TimesOccupy Wall Street protesters at Zuccotti Park swept and scrubbed on Thursday afternoon, hoping to stave off even temporary eviction.

By cleaning up Zuccotti Park on their own, they were trying to persuade the park’s owner, Brookfield Properties, to back down from its plan to send in cleanup crews Friday morning and begin to enforce new rules on the use of the park that would end the Occupy Wall Street protest, at least in its current form.

But as the day wore on, it seemed that the protesters’ efforts to placate Brookfield might, in the end, not matter, and all sides were girding for a Friday showdown. The police said they were ready to step in if the company asked for help in removing protesters or enforcing the new rules, while protesters planned to form a human chain around the park and, using Facebook and Twitter, called on sympathizers to join them.

Some protesters saw the cleanup as tantamount to an eviction notice, and they vowed to stand their ground, even if it meant being arrested. “This is a public park privately held — I don’t even understand what that means,” Travis Nogle, a 32-year-old protester and “earthship builder” from San Francisco said as he changed his shoes and prepared to pitch in with the cleanup. “We have a constitutional right to protest.”

Zuccotti Park, a plaza that takes up an entire downtown block, is owned and maintained by Brookfield but open to the public. While the police have confronted and arrested demonstrators during marches in the streets and on the Brooklyn Bridge, they have largely left the Zuccotti Park protests untouched, allowing the people there to camp out around the clock while ringing the park with barricades and dozens of officers.

But in a letter to the police commissioner, Raymond W. Kelly, this week, the company’s chief executive, Richard B. Clark, said that sleeping protesters were blocking walkways “at all hours of the day and night.” The letter said that there had been neighborhood complaints of “lewdness, groping, drinking and drug use” and that the company had not been able to perform its daily maintenance.

“We fully support the rights of free speech and assembly,” he wrote, “but the matter in which the protesters are occupying the park violates the law, violates the rules of the park, deprives the community of its rights of quiet enjoyment to the park, and creates health and public safety issues that need to be addressed immediately.”

The company circulated a notice in the park Thursday explaining its plan: it would clean a third of the park at a time, allowing protesters to return to each section once the job was done. More important, however, was the company’s vow to enforce new rules that it imposed after the protest began about a month ago, which seem aimed at the very essence of the occupation: no camping, no tents, no tarps, no sleeping bags, no lying on the ground or on benches, and no storage of personal property on the ground or walkways “which unreasonably interferes with the use of such areas by others,” the company said in its notice.

While demonstrators tried to tidy up the park Thursday — at one point a power washer was obtained, but there was no water available to pump through it — Scott M. Stringer, the Manhattan borough president, called on City Hall officials to try to reach a deal with the protesters. And the New York Civil Liberties Union issued a statement, saying: “The city must not use the cleanup as a pretext for mass arrests. To do so would be a violation of the spirit of the First Amendment and the spirit of dissent.”
Mayor Michael R. Bloomberg received a decidedly mixed reception when he went to Zuccotti Park Wednesday night to announce the cleanup.

Thirteen City Council members wrote in a letter to Mayor Michael R. Bloomberg that they supported a cleanup, but added, “The new rules you are enforcing, however — in particular the prohibition on sleeping bags and gear — is an eviction notice and potentially an unconstitutional closing of a forum to silence free speech.”
Ozier Muhammad/The New York TimesA sign in Zuccotti Park sets out the rules. Click to enlarge.

But Brookfield, in a statement, seemed intent on carrying out its plans: “As sections of the park are cleaned, they will re-open to the public. All are welcome to enjoy the park for its intended purpose as an open neighborhood plaza, in compliance with posted rules.”

City Hall issued its own statement Thursday afternoon, standing behind Brookfield’s decision to clean its own park and demand that protesters abide by their rules. “We will continue to defend and guarantee their free speech rights, but those rights do not include the ability to infringe on the rights of others, which is why the rules governing the park will be enforced,” said Marc La Vorgna, a spokesman for Mr. Bloomberg.

Some protesters have pointed out that the mayor’s longtime girlfriend, Diana L. Taylor, is on the board of directors of Brookfield.

According to Jerold S. Kayden, a lawyer and professor of urban planning and design at Harvard University and an expert on private parkland, New York City gives the owners of public spaces like Zuccotti Park the right to impose “reasonable” rules of conduct. While many private parks and plazas have nighttime curfews, Zuccotti and others — created under an earlier zoning law — are generally required to be open to the public at all times. “I would suspect that the city might view rules against sleeping overnight and permanent occupation to be reasonable,” he said. “But reasonableness is in the eye of the beholder.”

Still, the Occupy Wall Street demonstrators held out hope they could forestall the Brookfield cleanup by taking care of their own sanitation. The cleanup efforts were slow at first, with only a handful helping in the morning.

“Every action you see here is autonomous,” said Fred Pantozzi, a protester filling plastic bags with trash.

“Autonomous enough for people not to be doing it,” added another protester, Henry Perkins, a 21-year-old student at the University of Alabama.

Gradually, however, more people heeded the call. Volunteers taped off sections of the park, hauled off debris and scrubbed walkways clean.
Some said that if the police took away their sleeping bags they would sleep in the park sitting up.

A girl in a purple plaid jacket and short skirt said this was not a good idea. “If we stay up all night without sleeping bags we’re going to get sick and we’re going to look crazy on TV,” she said. “Activist burnout is a real thing. If you can take one night to sleep at a friend’s house and rest up.”

Mr. Perkins was putting abandoned clothing into clear plastic bags. He said he had not had a shower in five days, but somehow managed to keep fairly clean. He hoped the protesters would not be evicted. “My autonomous plan is to wake up before they get here and to be out of the way,” he said. “I will move quadrant by quadrant. I hope they don’t kick us out.”

NY Times wrote:

Facing Eviction, Protesters Begin Park Cleanup
By ANEMONA HARTOCOLLIS
October 13, 2011, 2:30 pm

Zuccotti Park, a plaza that takes up an entire downtown block, is owned and maintained by Brookfield but open to the public.

source

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October 14, 2011 6:46 AM
NYC "Occupy" showdown averted; Cleanup put off

NEW YORK - The cleanup of a plaza in lower Manhattan where protesters have been camped out for a month was postponed early Friday, averting a possible showdown between police and protesters who had vowed to resist being forced out.

The announcement sent cheers up from a crowd that had feared the effort was merely a pretext to evict them.

Deputy Mayor Cas Holloway said the owners of the private park, Brookfield Office Properties, had put off the cleaning, scheduled for 7 a.m. More than hour beforehand, supporters of the protesters had started streaming into the park, creating a crowd of several hundred chanting people.