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Thursday, September 25, 2008
Victor Davis Hanson :: Townhall.com Columnist
Dr. Frankenstein's Wall Street
by Victor Davis Hanson
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Will the Dems' health care Christmas Present to America be an improvement or detriment to our health care system?


When the mortgage bubble burst, Americans were “shocked” at how many Wall Street buccaneers had been gambling in a vast pyramid scheme with someone else’s money. Paper fortunes were made buying and selling questionable sub-prime mortgages on the silly assumption that such gargantuan inside profiting would always expand — even as the number of homebuyers able to buy overpriced properties was shrinking.

Now after the recent crash in sub-prime mortgages and the stock of several investment firms, a trillion dollars in “assets” could be nearly worthless. An already indebted American government must restore some sort of trust to banks and markets by either printing money or borrowing hundreds of billions of dollars from foreign creditors to guarantee loans.

All that remains of this Ponzi scheme is the election-year blame game. Republicans charge that important financial firewalls were dismantled by the Clinton administration while insider liberal senators got shady campaign donations in exchange for aiding Wall Street. Democrats counter that the laissez-faire capitalism espoused by Republicans for two decades encouraged financial piracy while tax policy favored the rich speculator over the middle-class wage earner.

But no one dares to ask what really drove the wheeler-dealer portfolio managers. Who re-elected these shady politicians of both parties? Who fostered the cash-in culture in which both Wall Street profit mongering and Washington lobbying are nourished and thrive? We citizens did — red-state conservatives and blue-state liberals, Republicans and Democrats, alike. We may be victims of Wall Street greed — but not quite innocent victims.

Let me explain. The profiteering was not just the result of a few thousand scoundrels on Wall Street or in Washington, as greedy and as bonus-hungry as many of them no doubt were. Look at the housing market as a sort of musical chairs in which everyone profited as long he grabbed a seat when the music stopped. Then those left standing — with high-priced loans and negative equity when the crash came — defaulted and stuck taxpayers with debt in the billions of dollars. But until then, most owners who had sold homes cashed out beyond their wildest dreams.

Thousands of dollars in past profits are still in sellers’ bank accounts or were spent on their own consumption. If the shaky buyer at the bottom of the pyramid should not have borrowed to buy an overpriced house, then the luckier seller higher up hardly worried that the cash-strapped fool was paying him way too much with unsecured borrowed money.

We created the cultural climate for this shared madness. Television shows advised how to “flip” a house after putting in cosmetic improvements. Real-estate seminars and popular videos convinced us that homes were not places to live in and raise a family but rather no different from piles of chips on a Vegas table.

We created the phony populist creed that everyone deserved to own a house. So lawmakers got the message to relax lending standards in service to “fairness.” But Americans forgot that historically nearly four in 10 of us aren’t ever ready, or able, to sacrifice for a down payment, monthly mortgage bills, home maintenance and yearly taxes — and so should stick to renting.

The problem went way beyond real-estate fantasies. Five-percent interest as a return on our money was once considered pretty good — especially inasmuch as a factory or farm on the other side of the banking equation could not really stay in business paying 10 percent in interest to banks for its necessary borrowing.

But soon retirement-account holders and institutional investors began to expect as a given 7, 10 — and even 20 — percent “return” on their portfolios. Wage earners and professionals alike compared the glossy brochures that appeared in the mail, and then jumped to this 401(k) investment or that mutual fund to “maximize” retirement portfolio earnings.

How Wall Street managers, eager for more multimillion-dollar bonuses, planned to deliver on their promised sky-high returns no one asked. But it often proved to be more by hook-and-crook shell games than by financing new productive businesses or by extending credit for the production of real goods in vital plants.

In a larger sense, this zeal for quick profits and easy money reflected an oblivious too-good-to-be-true culture in which we drove larger cars but demanded more oil drilling from everyone except ourselves. We expected both expanded government entitlements and lower taxes.

Our government borrowed ever more money from foreign creditors, because it was a collective reflection of our own profligate financial habits. Of course, we should reform Wall Street and Washington — and punish severely the crooks in both places. But Americans should remember that Frankenstein was not the name of the monster but of its creator.

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About The Author
Victor Davis Hanson is a classicist and historian at the Hoover Institution, Stanford University, and a recipient of the 2007 National Humanities Medal.

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I have a solution for all citizens
We do not pay these peoples wages any longer.
No more tax money to Washington DC.

Cut them off, none of them can be trusted a day longer.
No more taxes, its time for a real tea party and is what it is going to take to stop all the crime in DC and Wall Street.

Markets avoid equilibrium, they do not seek equilibrium.

There is only profit and loss, make the people who deserve to lose, lose.

Tea party time



Talent scout ...there are a few...
in Congress who are fighting the good fight. Say not all :)

No "We" Did Not
Sorry Charlie,

But some of us did not vote for a Dem or a Rep. We voted for a libertarian who had no realistic chance of winning. "Those who will rob Peter to pay Paul can always count on the support of Paul." Those supportive of Austrian economics and sound money were laughed at. Unfortunately, Hayek fans hardly have the energy to enjoy the last laugh given the sorry, predictable state of affairs.

You are right Ron
There are some good men left in DC.
Some i truly admire, Ron Paul for his money sense, Tancredo for his immigration sense.

And some others too.
I am serious about no taxes.

When this government illegally handed control over the nations money supply to a private bank, and then took us off the gold standard, we were headed for this day.

We the taxpayer is now the gold for the bankers and the politicians as we have become the backers for their crimes against us all.

I hurt for America
buster writes:
Unfortunately, Hayek fans hardly have the energy to enjoy the last laugh given the sorry, predictable state of affairs.
=========

I sincerely hope no one is laughing, not in America anyway.
I know our enemies are laughing.

Better to stop this plan now than when it gets worse later.

Better to run off the road at 50 mph than 100 mph, and is where they will take us.

This system was born with its own seeds of destruction, fiat paper money.




Should We Stop Paying Our Mortgages?
I feel like a fool for paying my mortgage every month. I'm going to stop so I can cash in on the bailout.

Can the FBI investigate Barney Fwank and Chris Dodd in addition to Frannie and Freddie?

Prestodigitation
Sorry, kids; it's time to learn that there really is no Santa. So, why can we believe that an elite in Washington can play with paper and somehow create wealth?

Wealth is the result of production of real value by free people. Allowing the Sophist Tyrants to mug the producers does us all a disservice.

BS
Another pundit pushing the "greed" button. This fiasco is pure government medling by incompetents. It is Keating 3 all over again. Democraps accepted bribes from Fannie and Freddie and created this mess.


us and them.
Some posters did not seem to get the gist of VDH's piece.

Yes, politicians and Wall Street schemers are part of the problem, but this shell-game culture pervaded the entire nation, encompassing the citizens of our Beloved Republic.

VDH points out popular television shows such as "Flip This House", along with unrealistic expectations of profit among American investors, as proof that politicians and Wall Street schemers did not force us to imbibe this toxic concoction.

Too many of us gulped it down with gusto.

Well, the bloom is off the rose, and a lengthy hangover is in the offing.

We are probably in for a sustained number of years, if not decades, of anemic growth in our economy at best.

The president financed this unnecessary war, cutting taxes even as he radically increased government spending and deferred reckoning day onto the future, just as we financed our opulent lifestyle, deferring the day of reckoning onto the future.

As VDH correctly opines: "we created the cultural climate for this shared madness".

Live Long Enough.
I never thought I would live long enough to read Victor Davis Hanson writing like a sophomore. What is it but a re-cap any one of us could do?

But I guess that's OK, because so is every other pundit on this Website doing the same. And I don't need to look at the other side's Websites to know they are doing even worse.

Words like "greed," "crooks," -- oh, why repeat the dozen more?

Those are not bad words, or good words, they merely describe human nature. Personally, I find no wrong in human nature. What other nature would be better?

To a particular specific, what is wrong with "buying low, selling high?"

Yes, there is such a judgment as "good character," and "bad character." However, that is a "judgment," after all - somebody else's judgment.

Wealth, like matter itself, never disappears, it merely changes form.

Yesterday, on this Website, at another pundit's post-place, I mentioned the "grunts" motto for what USMC really means. It's a bit "dirty," and somewhat character-less, but true. Yet, we were still brothers.

"Character," however, is not living long enough to point out others "bad behavior," no, it's better than that. Up to today, Victor Davis was "better than that," I judge.

Cause and Effect
Blaming the house flippers for the problem isn't the problem. That is the result of the politician's efforts to place everyone in the US in their own highly mortgaged home -- including the illegals. Everyone is not entitled to own a home, get free health care, free food, free clothing, free access to all that I must pay for. That is a communist, Democrat, liberal, socialist dream that is coming true. In a land that is/was built on the concept that you get what you earn, it certainly has proved again that "free" doesn't work - neither here nor elsewhere in the world.

Deja Vu All Over Again
Until about 10-12 years ago, in order to qualify for a mortgage, you had to have a 20% down payment, good if not spotless credit, and a verifyable income high enough to repay the loan. Also, the lending institution that made the loan usually retained ownership of the instrument through its maturity. Recently, mortgages have been offered via brokers(a curiously appropriate term) who offered loand from the whistling past the graveyard school of finance. No down payment, no problem. No income? No problem, sign here and before the ink is dry, I'll sell the loan to someone else, close the office and move to the Caymans. This phenomenon, combined with the TV inspired flipping frenzy overheated demand for housing causing a frenetic sellers' market, characterized by astronomical increases in housing prices which naturally produced a boom in construction.
As always is the case, what goes up comes down eventually. Too many people were overextended and couldn't make payments when their ARM rates jumped. Many of these were speculative investments made recklessly. But the good news is that anyone who could qualify for a mortgage under traditional guidelines will be able to find real estate at a very good price. This is far from the first time housing prices have plummeted and this time like every other time in the past they will rebound.

The Culture was already in place
for this to happen. Nobody needed to create it.

"the world is in the gripe of the evil-one."

As this hurting world becomes more hardened toward the words of Scripture the people in it will need to be bailed out more and more of what only the Sovereign creator can save them from.

Sorry VDH
This is somewhat bogus. The root of this entire mess still grows in the fertile feces of liberal policies. The Clinton admin. put LEGAL pressure on the lending institutions: either administer a certain, ruinous, percentage of mortgages, to those we KNOW can not repay them, or face the ravages of the Justice Department and, at the least, restrictions on any growth of your business.
The feeding frenzy came in buying and selling this toxic paper, in order to meet the government requirements. In effect, we put a premium on the poison pill. Now that pill has been swallowed by too many and the entire system is infected.
Where we are does not change the fact of who put us on this track, and why. It also doesn't help that the economy has been bled dry for forty years, in the name of bringing the poor out of their condition, but the money has really been spent to build huge bureaucratic legacies, while throwing enough crumbs to the ignorant, to keep them inline, poor and wanting.
That was not good enough, so the next step was forcing the taxpayers to buy each of the poor their own house. Enjoying the payments on someone else's house? You better be, because it has only just begun.

Mr. Hanson
So how do we fix it?
How is a bailout going to work? Specifically.
I want details.

Barney the Demosaur.
"And just who was it that killed a Freddie and Fannie reform bill a few years ago? Why, that would be Democrats. And who was it that was saying everything was cool with Freddie and Fannie? Barney Frank; who is not, by the way, a Republican. And who has been pushing lenders to make loans to unqualified borrowers for two decades? Democrats again. Still, the message doesn't get out. Could that possibly be because of the media love affair with The Chosen One?" --Neal Boortz (09/24/08)

Jerabaub
"The president financed this unnecessary war, cutting taxes even as he radically increased government spending and deferred reckoning day onto the future"

First of all, the President doesn't finance anything--Congress controls the federal purse strings.

Secondly, after the Bush tax cut package--the "Jobs and Growth Act"--was enacted, total federal revenues grew by about $625 billion, or 35 percent, between fiscal year 2003 and fiscal year 2006.

While I can't disagree with the assertion that spending is out of control, the notion that the Iraq war is some massive budget buster is absurd. We have a $3.1 trillion federal budget, with the war costing $120 billion annually (roughly 3%), a pittance when compared with the massive $$ spent on so-called "entitlements."

Finally...
Maybe many will realize that this fraud we call government must be bled to death. No more taxes. No more withholdings. Demand cash, no checks, from your employer and convert it to gold or silver immediately. Get out of the banks yesterday or you'll wish you had tomorrow.

Keep your powder dry boys and girls it's gonna be a doozy.

Good luck!

I love the poll question: Should the Federal Reserve bail out the banking system? The Federal Reserve is the banking system, you dolts.

IT'S ALL OUR FAULT

.....THE BLAME GAME ....

.....To the extent that voters put Barney Frank MA, Chuck Schumer NY and Cris Dodd CT in Congress ...I agree with you ...I would never vote for any of those cretins ...

.....I've owned several houses, two right now that are paid off, never financed through Fannie or Freddie, never flipped a house ...so I accept no blame thank you .....COLOSSUS

Let's not forget
alot of this supposed crisis is based on faulty accounting, forced on the banking system by Sarbox legislation.
Just because a few of an institution's mortgages go belly up, they must devalue ALL of the mortgages in their portfolio, even though they are healthy, have on time payments and are in no risk of failure. Therefore, a large percentage of this crisis is on paper only. The lending institutions are healthy and liquid, yet because of an arbitrary government policy, they are in need of "bailout" from nothing.
We do not yet know how much of the crisis is based on this stupid legislation, yet, for some reason, this bailout must happen in 24 hours?
There is something we are not being told here folks........

Rock Strongo
OK, Congress appropriated the initial funding that Bush requested on Iraq.

Now, I am no expert on the cost of the Iraq war, but Joseph Stiglitz, Nobel Prize winner in Economics, maintains the ultimate cost of the Iraq war will be in excess of two trillion dollars, or about 3 times the package requested by the administration to bail out the ailing financial sector(and about which there so much controversy).

So the cost of this war will be far, far, greater than a mere pittance of 120 billion dollars.

Even if Stiglitz' projections are wrong, and the war ultimately costs only one trillion dollars, that ain't exactly chump change.

If the president's policies were so economically sound, why are we now confronted with this staggering deficit?

Yes, the Congress technically appropriates funding, but it is the President who submits funding requests to Congress to operate the various departments...anything from Dept. of Defense to Foodstamp program.

The President's budget includes the amounts of money the president thinks is necessary to operate these departments.

Congress can authorize what the president has requested, deny it, or change it.

So I think they share in the blame game.

Yes
Don't we just have to go back to the traditional conservative rules.
People that can't afford homes will again not be able to buy homes.
Why did housing prices go up so high?
Wages were not increasing at the same rate.
Is the whole situation a factor of the previous bubble. Many were getting rich and used their money to purchase real estate. When the previous stock bubble burst suddenly they were stuck with all this real estate that they could no longer afford or get rid of for the price they paid so they walked away and let the bank get stuck with the house. But the point is some bank somewhere still owns the house. I think the game was really "hot potatoe".
The price of homes was inflated and now the prices must come down to where the market can support them.
We know so many thirtysomethings that go out and get 2 new cars and have a mortgage while trying to start a family. A show for friends.
And like my husband says everyone wants a giant house.
Fortunately, we went with a small home that we could afford. Now if God continues to bless us with good health and income we will pay it off. I know I misspelled potato.

Dr. Frankenstein's Wall Street
Plenty of blame to go around but in order for this kind of stinking pile of manure to NOT repeat itself it has to be investigated impartially, get to the real root causes, identify criminal activity and its perpetrators, severely punish crime (none of this slap-on-the-hand justice of “white collar” crime which has cause more turmoil and damage than a division of serial killers), and, finally, re-engineer a sane, not overly complex, transparent financial system with checks and balances. Government, with their history of screwing up everything they touch needs to be scrutinized the most for all the collusion with financial types and their lukewarm to hands-off approach to regulation enforcement. What are the chances of this happening? ZERO!

Jerabaub
You make the mistake of believing in neutrality.
Stiglitz with his big prize has an opinion. He obviously doesn't believe in fighting terrorism.
Does he come up with a cost of not fighting terrorism?
Why don't the costs of entitlements bother you?

Jerabaub @ 9:49 AM
Jerabaub wrote, "The President's budget includes the amounts of money the president thinks is necessary to operate these departments.

"Congress can authorize what the president has requested, deny it, or change it."


O.K., so Congress has absolute control over what the budget will be, then sends it to the President for a rubber stamp. Why is the President at fault? He can't change the budget. All he can do is approve it or send it back to Congress. Remember Reagan's budget recommendations? The Democrats declared them DOA before Congress even got them.

There isn't "enough blame to go around". All the blame rests on the Democrats who for 30 years have insisted on wrecking the best economy in the world in order to destroy capitalism. They've finally succeeded.

Now Americans can elect Obama, nationalize major industries and establish a socialist economic system. I hope all you idiots who support the Democrats are happy.

Joycey
In my experience, I've found that the recipients of entitlements NEVER object to them. In fact, they only want more, more, more.

I blame Democrats
I pay my mortgage and live within my means.

Buster is right. Wanna know where this started and where it's headed? Read "The Road to Serfdom".

Joycey
I have not talked to Stiglitz about fighting terrorism.

Entitlements do bother me. I blame both Dems and Republicans there.

Some upstarts might argue what the Iraq invasion had to do with fighting terrorism anyway.

We removed a murderous but secular Sunni thug who despised Iran and also was an enemy of Al Qaida.

The Iraqis did freely elect a a Shia theocracy which, to be honest, also is an enemy of Al Qaida, but who, unlike Saddam, is very close to Iran.

At any rate, the Bush vision of a pluralistic democratic nationstate of Iraq, where Shia, Sunni, and Kurds live peacefully together is in tatters.

Shias in the south are more beholden to Iran than the Baghdad government.

And Kurds in the north don't even accept the legitimacy of the Baghdad government on matters within their provinces.

Sunni tribesmen are loyal to us as long as we keep paying them.

And even the Maliki government wants us out.

Such ingrates!



clarification
There is a common tendency here to blame minority loans for the crisis. And given that there was a push to make more minority loans, one can see some intuitive pull to the idea.

It should be noted though that the facts don't back this claim up. The issue is discussed http://www.prospect.org/cs/articles?article=did_liberals_c ause_the_subprime_crisis. It turns out that the lending organizations that were covered by the laws pushing minority loans were less likely, not more, to get stuck with the bad mortgages that are fueling the current crisis. It was precisely the independent mortgage companies that were least regulated that have produced the most bad loans in the mix.

And contrary to the people who want to blame Fannie Mae and Freddie Mac, the problem did not begin in their domain either. The problem is that the bundling of mortgages in the sub-prime mortgages had a ripple effect on the mortgages that were backed up by those groups. So while the levies they had in place turned out not to be sufficient, this was an issue of them not being capable of stopping the disaster that occurred in the less regulated market rather than something of their making.

DavidMac
Didn't those fiscally responsible Republicans control the House of Representatives during all of Bush 43's tenure, except for the last two years?

So let me get this straight.

We had a GOP House(which appropriates funding for the government)for six of eight years of the GOP Bush presidency, yet all the blame for the deficits and government spending rest with....those nasty ol' Democrats!

What am I missing here?

Look, I am no fan of the Democrats, but you guys are hysterical in your refusal to own up to your parties's responsibility...and not just party...the President's responsibility.

Both parties share the blame here.

Jerabaub @ 11:03
Certainly, the Bush administration has been extremely lax regarding law enforcement, but Bush and McCain were making noises about Fannie and Freddie years ago. The raison d'etre for Fannie & Freddie (buying shakey mortgages) was well-protected by the Democrats (who received campaign contributions), and Bush/McCain certainly didn't want to appear to be AGAINST housing loans to minorities.

The point I'm trying to make is that while you are correct that Bush is a 90-pound weakling getting sand kicked in his face by the muscle-bound Dems, the past 2 years of a Democrat congress has been nothing but malfeasance. The seeds of this go back to 1977, but the current "crisis" could have been mitigated by some oversight by Barney Frank and the rest of the Dems. They chose to ignore the bad loans because Fannie and Freddie's CEO's were giving them money.

Lenders were complying with the Clinton administration's coercion regarding home loans to minorities, and the lenders simply sold the bad mortgages to Fannie & Freddie.

So now the Dems blame Wall Street and the free market and the "greed" of CEO's and Obama says (in so many words) that America is ready for socialism.


Modmark
I could not access the article either. You might have to subscribe to the American Prospect in order to get the article.

I have some spyware and virus protection running on my computer so maybe that is why I have trouble accessing some sites.

You know more about the internet than me(for I am scarcely literate in that regard). Perhaps you can just access American Prospect's website.

Greed is good!
John Stossel said so in 1998. It's only out to lunch. Don't panic.
Doubtlessly, the pigs are already snorting in some other corner of the barnyard. Watch for the latest get-rich-quick scheme coming to your local cable in mere days!

Jerabaub
Why wasn't a simple GOP majority enough to get S190 out of committee?

the wrapping...
Ah, so! It wasn't the garbage that was the problem, it was the way it was wrapped! Now I understand high finance.

FANNIR/FREDDIE
.....These GSE's were Liberal/Democrat sponsored Affirmative Action Housing authorities to give housing to minorities who could not afford it ...

.....This is typical White Guilt feelgoodism ...

.....Frank, Dodd & Schumer should be strung up by their testicles in the public square .....COLOSSUS

Blame US??
This is one time I disagree with VDH somewhat. True, may people took advantage mortgages that they had no business getting. However, that only accounts for a small percentage of the morthgagtes in force. If 95% are being paid off on time, and there are maybe 2 to 3% that are in deflaut in any one time normally this leaves a small percentage as the real problem. As such I would think the market could absorb that level of loss without any real damage to the system.
However, Fannie Mae and Freddie Mac Barney Frank, Chris Dodd, etc and the insiders compounded the problem with a shell game using the bad paper to fund other ventures and wasting money for salaries, contributions, etc.
True, those districts they represent keep electing these clowns to congress, in part because most of this situation has not been known. We can count 2008 as the year the media died or was at lesat found to be dead.

Hopefully, when these things come to light most people will rethink their support of their represenative. As seen in some of the comments, there will be some who will never get it.

Shaun
You know more about that than me.

Apparently it was a bill authored by McCain and others to reform the federal government's involvement in lending.

It probably was a good bill, but even a GOP majority was not enough to get it out of committee, apparently.

davidmac @ 11:28
I was sitting down to compose my thoughts and discovered you had already expressed them. The problem is getting this light of truth out to a largely ignorant populace. And it is that critical area of his job that GW has fallen so woefully short in. Having Paulson and Bernake at the helm is miraculous and it is particularly depressing that we have Republicans who can't see that. This is one of the few times I strongly disagree with my fellow historian Knut Gingrich. If this legislation does not pass, we are in for the worst time economically since the depression. And what do you think our enemies are going to do? When the Soviet Union collapsed we celebrated their adoption of democracy. Think they will do the same for us? And let's not forget our misunderstood friends in the Middle East.

jerabaub
The Senate has a tool called the filibuster. The GOP Senators didn't have enough votes to break a threatened Democrat filibuster.

S190 went down on a straight party-line vote. GOP for, Dems against.

Who's to blame? Democrats.


Whaddaya mean ''we,'' Dr. Hanson?
--
Among much else, Dr. Hanson writes;

"Who re-elected these shady politicians of both parties?"



What kind of choices were we given?\

Christless (D) and Satanic (R)?

Dr. Hanson, I live in New Jersey. I haven't been represented in Washington City by *ANY* congressional candidate for whom I've ever cast a ballot.

Ditto for the festering aggregaton of thieves, incompetents, grafters and child-molesters in Trenton.

You want to sell your "collective guilt" games, go right ahead and try.

I ain't buying it.

Like any other sane individual, I refuse to accept responsibility for that over which I have had *NO* authority.




=====
"Believe what you like about 'wasting your vote', nothing will ever alter a fundamental assumption on the part of Democrats, Republicans - and the vast bureaucracy they've created together - that even the slightest manifestation of individuality (let alone individualism) is a threat that must be dealt with."

-- L. Neil Smith

All the many Socialistic/Communistic!
Yes, all you readers get a message from the Editor of Towhall that because of the numerous Socialistic/Communistic programs now in force it is that America is now in worst sinkhole over financially at the tune of 53+ trillion dollars, Yes? I guess all you got it!

Yes, I add Communistic, simple because they both emanated from the Governments. Yes, question to even Mr. Hanson: Did ever one of those many programs ever been submitted to a vote by the taxpayers. The answer is zero! Every single one imposed dictator style upon the Aerican people!

Yes, Krushchev said this while pounding his shoe on his desk at the UN in the 60's: "America will accept Communism and not even know it".

So, now this mess of all messes ever created by corrupt in love with Socialis/Communism Government and imposing ever more upon the American people including this bailout!

I rest may case, and will continue to claim Ron Paul as my heroQ!

Bush Sends FEMA to NY
Breaking news - Bush is sending FEMA to Wall Street. .......
http://thefiresidepost.com/2008/09/25/bush-sends-fema-to-wa ll-street/

Ohg Rea Tone
That is about as smart as the libs on TH, not at all.

Tea party anyone?
Call, fax or email your reps in D.C. people. No matter which side of the D.C. crowd you are on, they should be willing too take a "HEALTHY" pay cut to help out. How about paying them $1.00 a year in salary to help with out with it until this passes and it won't burden the taxpayer quite so bad. Fax, email or call the White house and your reps. in D.C. and bring this up.
Rather demand it! This is their doing, let them and the CEO’s bear part of the burden!
We could almost pay for it with their paychecks over the next few years.
Great things can start with a small idea!!!
Fax the White House at 1-202-456-2461, Pelosi 1-202-225-8259, Boehner 1-202-225-0704, Reid 1-202-224-7327"...
comments@whitehouse.gov

The $1.00 a year payroll idea is mine and no one, Dem Independent or Repub. should have a problem telling our civil employees to deal with it! Because I Guarantee you, none of them will go hungry or lose their homes!



Twisting the Blamegame
RE: Federal Housing Enterprise Regulatory Reform Act of 2005 –

"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 report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.”

"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."
--- Sen. John McCain (AZ)--May, 2006
NOTE: The Democratic members of Congress killed this bill. Now they want to politically benefit from this crisis. Go figure.
source: http://www.govtrack.us/congress/record.xpd... -


ModMark
I agree completely.

I once was a Republican, but the neocon hijacking of that party's foreign policy has alienated me.

And I never could abide the social engineering do-gooder schemes of liberal Democrats.

And Obama is liberal even by Democrat standards.

In fact, I think the neocon interventionism characterizing the GOP's foreign policy(its messianic crusade in establishing democracies throughout the world)is nothing more than leftist nanny-state do-gooderism of domestic matters applied internationally.

They(respective mentalities)are both meddlesome and arrogant.

Leave me out of it
In every bad situation, there is always someone like you, Victor, who writes an article blaming “us”. Well, speak for yourself. I think you probably do as I suspect articles such as yours come from your own sense of guilt, but don’t project it on me.

I live in Indianapolis, Indiana, recently voted one of the most affordable housing markets in the country. The reason it is affordable is because those outlandish spikes in home values never really hit here. Within a period of 15 years, I sold two homes, and I lost money on both of them. The first house sold in 1982 when mortgage rates were 18 percent, and Indiana had the highest unemployment rate in the nation. The second home was sold in 1997 after my husband died unexpectedly. I never defaulted on any payments, but I didn’t make any money either. And just for the record, my husband and I both worked two jobs for several years to save the money for the down payment on our house (which probably contributed to his death at age 44).

I have always driven an economy car (my current car is 10-years old) and I deplore government intrusion into my life. They can keep their perks, I would rather do without and have control of my life than take ANY government handouts, so you’re wrong about everyone wanting more from government and lower taxes at the same time. Some of us actually AREN’T hypocrites.

I don’t take responsibility for black Americans being kept as slaves, and I don’t take responsibility for the mess of the economy, the collapse of the housing industry, or the failure of investment banks.

DavidMac
Agree with your 11:28 post.

That is it for me today.

Bye all.

Bailout
What's the problem? Just take what they need out of the Social Security "trust fund"

Bailout Plan......
........Selecting who will operate and manage the distressed assets for the "taxpayers" is critical to its success. My proposal:
[1] Property management companies [plural] should be contracted to do the program;
[2] A selection committee of Donald Trump, Jack Welsh, Warren Buffet, Paulson and the next VP should be convened.
[3]Contracts should be incented to produce the greatest return for taxpayers;
[4]Additional incentives/rewards determined by competitive rankings of results among the firms;
[5]FEDERAL GOVERNMENT AGENCY ABOLUTELY DISQUALIFIED FROM MANAGING THIS PROGRAM!!!!!!!!
FWIW

GREED? YES, FOR VOTES
The fault lies with those who forced banks to lend to poor credit risks or face discrimination fines, and those who loosened up the Fannie Mae and Freddie Mac lending rules. And who were they? The Democrats. Don't blame people for taking advantage of loopholes, blame those who made the loopholes.

The whole story at:

http://colony14.net/id46.html

how conservatives have changed...
A number of TH readers seem to object to Hanson's apportionment of blame, evidently thinking that this mess is the rsult of just a few bad guys doing bad things. I can remember an older conservativsm, that of early Bill Buckley and the conservatives intellectuals of the 1950s (Kirk, Weaver, and earlier--the Southern Agrarians) who were all very critical of American desires for instant, easy money and quick fix solutions. Those days are long gone, and I'm sure that a lot of today's conservatives are absolutely horrified that the merry-go-round has come to a screeching halt.

The first thought: blame the poor and the blacks, but never, never, never the benevolent capitalists handsomely compensated as long as quarterly earnings kept climbing up that great Ponzi scheme. For too many of today's conservatives, the national motto is "I've got mine, now you get yours."

We were frugal
We are not part of that boomer generation spendthrifts. We bought our first house in Blacksburg, VA in 1974 after renting a house. I was 35 and had been a full professor since 1970. We rented after we were married in Pittsburgh. We had one small car until we bought a second (used) car. We saved and lived a frugal but satisfactory life. My wife did not have to work for us to live the way we chose to.
So if we move into hyperinflation we are ruined but then this country will explode.

WE ARE ALL MUSHROOMS

.....Congress keeps us in the dark and covers us with horsesh*t .....COLOSSUS

Americans Beware…

The FED (Democrats & Republicans) got us into this mess and now they want to get us out of it, but only if they can use it for “PORK’N”; hold on to your wallets. One TRILLON is only the beginning of what could be America’s final downfall. They are a bunch of hypocrites and traitors to the principles that makes America the greatest nation on earth. Many should go to jail or at least lose their job; still many more should resign; for they let this happen under their watch.

“WE THE PEOPLE” must take action and prevent this cure from becoming worse than the disease. For if we do nothing, we will have no one to blame but ourselves. Phone, fax, e-mail, write, and sound-off; let your elected officials at all levels of government know how you feel. Stand-up and fight for your liberty and freedom from a government of the few, at the expense of the many.

"We the People" ...
... elected the members of Congress who created Fannie and Freddy, and let them run wild. "We the People" elected the members of Congress who stopped exploration for oil and left this country at the mercy of our enemies.

"We the People" are given the power to make changes in our government by our Constitution as well as the power to term-limit Congress. It is called the vote.

"We the people" have ample evidence that the members of Congress are either corrupt or stupid for not recognizing the corruption and speaking out about it.

"We the People" must stop reelecting the same Senators and Representatives who have created this mess, and we need to be smart enough to realize that our guys are a part of this system.

"We the People" deserve this mess because we elected the politicians who created it, and the mess will continue until we elect different people. It is time for real change in the Congress. We need to change the people who represent us in Congress.

192 Economists Against Paulson's Plan!
To the Speaker of the House of Representatives and the President pro tempore of the Senate:

As economists, we want to express to Congress our great concern for the plan proposed by Treasury Secretary Paulson to deal with the financial crisis. We are well aware of the difficulty of the current financial situation and we agree with the need for bold action to ensure that the financial system continues to function. We see three fatal pitfalls in the currently proposed plan:

1) Its fairness. The plan is a subsidy to investors at taxpayers’ expense. Investors who took risks to earn profits must also bear the losses. Not every business failure carries systemic risk. The government can ensure a well-functioning financial industry, able to make new loans to creditworthy borrowers, without bailing out particular investors and institutions whose choices proved unwise.

2) Its ambiguity. Neither the mission of the new agency nor its oversight are clear. If taxpayers are to buy illiquid and opaque assets from troubled sellers, the terms, occasions, and methods of such purchases must be crystal clear ahead of time and carefully monitored afterwards.

3) Its long-term effects. If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America's dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.

For these reasons we ask Congress not to rush, to hold appropriate hearings, and to carefully consider the right course of action, and to wisely determine the future of the financial industry and the U.S. economy for years to come.

http://faculty.chicagogsb.edu/john.cochrane/research/Papers /mortgage_protest.htm

Neal Boortz summarizes the whole story:
"And just who was it that killed a Freddie and Fannie reform bill a few years ago? Why, that would be Democrats. And who was it that was saying everything was cool with Freddie and Fannie? Barney Frank; who is not, by the way, a Republican. And who has been pushing lenders to make loans to unqualified borrowers for two decades? Democrats again. Still, the message doesn't get out. Could that possibly be because of the media love affair with The Chosen One?" --Neal Boortz (09/24/08)


Down South - Nice pick-up
--
Though I don't hold much trust in the perspicacity (or, indeed, the intellectual honesty) of the academic professoriate, your recap of that recommendation -

(( held on the Website of John Cochrane at the University of Chicago ))

- is appreciated.

Not like the incontinent spincters in Congress are going to pause for ten seconds to consider it.




=====
"Term limits aren't enough. We need jail."

-- P.J. O'Rourke

If this was Russia...all...the
crooks of Wall Street would be sent to Siberia. But congress is to blame too...By the way send all the lobbyists to Siberia too. Lobby people (with their suitcases of money) are a curse to our nation And don't forget the White House....phooey!

Sammy usa

SJ Doc
Neither do I usually trust them.

But as they say, even a blind squirrel sometimes finds a chestnut

I’m not using the word ACORN anymore.
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