If we have to bite the bullet and accept the reality of a bailout, legislators could at least have the respect to make it palatable.
What on earth is wrong with the brains of our esteemed Senators? What perversity of mind gives them the idea that after the people of America successfully browbeat their terrified colleagues in the House into rejecting the $700 billion bailout out of fear for their jobs, we would suddenly embrace what is essentially the same damned bill with huge load of pork added to it?…
Article comments
26 - DaveNalle
Handy. Lenders were denied access to federal backing like FHA if they refused to give out loans to unqualified applicants. And thsse are not people getting "legitimate loans" they are people who could not qualify for loans on the basis of income or credit history being given no fault loans with no downpayment at the order of the government.
Your attempt to misrepresent and minimize the irresponsibility of this sort of program insults all of our intelligences.
Dave
27 - Matthew
"No fault loans with no down payment at the order of the government"????????
No Dave!!!
I gave you a pass in my comment up above, but not this time.
YOU HAVE JUMPED THE SHARK!!!!
28 - Cindy D
Thank God! For a minute I thought they were talking about exempting those arrows with the all wood shafts that don't have laminations.
EXEMPTION FOR CERTAIN WOODEN ARROW SHAFTS.--Subparagraph (A) shall not apply to any shaft consisting of all natural wood with no laminations or artificial means of enhancing the spine of such shaft (whether sold separately or incorporated as a part of a finished or unfinished product) of a type used in the manufacture of any arrow which after its assembly (i) measures 5/16 of an inch or less in diameter and (ii) is not suitable for use with a bow described in paragraph (1)(A). The amendments made by this section shall apply to shafts first sold after the date of enactment of this Act.
29 - Cindy D
Finally I can write a dystopian novel without actually having to think of any fictional ideas!
From the Sarah Palin election to the bailout, I don't think even Jack London's Iron Heel could compete.
30 - Cindy D
Brilliant reporting by CNN:
The two candidates were nearly even in total number of words spoken. The normally voluble Biden restrained his tendency to ramble by uttering just 5,492 words during the 90-minute debate, versus 5,235 for Palin, Payack said.
In last week's debate between Sen. Barack Obama and Sen. John McCain, Obama spoke 8,068 words during the 90-minute event, while McCain spoke 7,150, Payack said.
This will make a great chapter.
31 - Clavos
Always have thought CNN is vapid and sophomoric...
32 - bliffle
Thanks to Mathew who gave this citation from WSJ which debunks the idea of the borrowers causing the problem:
Capitalism sure is fragile if subprime borrowers can ruin it.
...for all their failings, Fannie and Freddie didn't originate any of the bad loans -- that disastrous piece of work was done by purely private, largely unregulated companies, which did it for the usual bubble-logic reason: to make a quick buck.
33 - bliffle
Cindy commented:
"..I don't think even Jack London's Iron Heel could compete."
Good book, and I think it's out of copyright and available free from Project Gutenberg in glorious ASCII text. For free! That's where I got it a few years ago.
34 - handyguy
The question is how many loans lenders were 'obligated' by law to make, and how many more they just happened to find very profitable, as long as the bubble lasted. The proportion of the latter to the former is probably very large indeed.
Doesn't the CRA date from 1977? Weren't most of the questionable loans from the period that ended last year -- a period of high home prices combined with low interest rates? Blaming the crisis on a law you can conveniently label socialist is unfortunately too convenient to be accurate.
[This is just too similar to your oft oft oft repeated claims that Freddie, Fannie and the Democrats did it all, and the angelic Republicans tried and tried to stop those awful Dems...although the GOP did control both houses of Congress and the White House during the period in question.]
Insult your intelligence indeed! Just try dealing in facts rather than ideological caricature, on one issue, once? Are you even capable of it, even interested in it?
I thought not.
35 - DaveNalle
"No fault loans with no down payment at the order of the government"????????
No Dave!!!
I gave you a pass in my comment up above, but not this time.
I don't need a 'pass' from you, Matthew for just stating the facts.
I suggest you read Ross Kaminsky's excellent article on the subject.
Even Bill Clinton has openly admitted the culpability of congressional Democrats in protecting Fannie Mae and Freddie Mac from regulation and reform.
It was Fannie Mae which issued the Flex 97 and Flex 100 loans which required 3% and 0% down respectively. Look up some of the other pertinent acts like the Housing Opportunity and Responsibility Act of 1997 or the various HOPE acts. It's not just the 1978 CRA act, but a whole series of acts stemming from it which built up the whole system of promoting ridiculous forms of loans with no serious consideration of qualifications.
Sure, there were Republicans involved, but Fannie Mae was basically run by and for powerful congressional democrats and Republicans generally turned a blind eye to it. It fed them massive campaign donations, provided sinecure jobs for their friends and allies, and in return they protected it.
Seriously, look at the transcripts from the 2003 hearings on oversight of Fannie Mae. It's obscene and ridiculous.
This is for you too, Handy. The biggest blame for Republicans is that they allowed the demos to keep running Fannie Mae the way they did. It's a common practice in Washington to let the opposition party keep some perks to buy off some cooperation and Fannie Mae was one of those. Even if the Democrats were out of power, they kept control over Fannie Mae and milked it for all they were worth. Republicans should have put their foot down, but that would have violated the quid pro quo system they use in DC, so nothing serious was done about it.
Dave
36 - DaveNalle
And let me add that contrary to what Handy suggests, the CRA does have enforcement elements. Under changes implemented by the Clinton administration in 1995 if banks didn't get a good rating under the CRA the FDIC would bar them from expanding or merging with other banks, basically strangling them to death for not giving out enough non-qualifying, no-money-down loans.
Dave
37 - bliffle
Dave has gone completely around the bend on this stuff. His partisan rationalizations are so intricate and frail that they defy credulity, except for Dave and his fellow True Believers.
His mad reasoning is revealed by use of the classic liars gambit "my fault was that I trusted him too much", or "my fault was that I loved her too much"...
38 - DaveNalle
Bliffle, you make so little sense that I really have no idea what you're talking about here.
Maybe my mistake is that I just can't believe you partisan lunatics don't see how obvious the mountain of corruption is here. It's like you're looking at a painting with a giant rip down the middle and you're complaining about the quality of the brushstrokes.
The evidence of the way that the democrats have nurtured disaster in the housing industry, profited from it, and protected it against any oversight is so absolutely overwhelming that your ability to ignore it verges on some sort of insanity.
I guess I should rein my frustration in and start over again. Maybe an article that takes it by baby steps is what you need. Clearly links to the overwhelming evidence are wasted on you.
Dave
39 - bliffle
Dave is simply unable to accept the truth of the failure of his pet ideas, though that failure is evident to most.
Friedman Free Market Fundamentalism is bankrupt.
It stands revealed as just another excuse for brutal exercise of power. The Fundamentalists themselves tore the mask away the moment they had to, to invoke Market Socialism to save themselves.
Save yourself, Dave. Abandon Potemkin Capitalism.
40 - Matthew
Dave,
I went to the Ross Kaminsky blog and read many of his articles. Just like you, he prefers to use economics simply as a vehicle to further his right wing political agenda. There was no mention of deregulation, Phil Gramm, John McCains WSJ interview in March 2008 etc. Another convenient omission was the number of Fannie Mae lobbyist in the McCain campaign.
On a humorous side note, Mr Kaminsky was also still desperately trying to link Iraq with the September 11 attacks, as recently as July 2005.
Call me an elitist, but I will stick with the Business Week and Wall Street Journal articles.
Too much is at stake!!!
41 - handyguy
By the way, Fannie Mae did not/does not "issue" loans. It bought them from lenders and guaranteed them, serving as an insurer of sorts.
Excellent article in today's NY Times that helps explain some of this stuff, from the point of view of deposed Fannie CEO Mudd.
It points out that as long as the loans were 'plain vanilla,' Fannie's guarantees actually worked the way they were supposed to...expanding the universe of home owners while still managing risk.
But all the complicated new mortgage products [weird mathematical formulas, derivatives, balloons and the rest], plus entities like Goldman Sachs buying up mortgages in competition with Fannie, motivated Fannie to take on more and more risk - but without being able to measure or control it as they did before.
It worked, for a while. Then those chickens came home to roost.
42 - DaveNalle
Friedman Free Market Fundamentalism is bankrupt.
It stands revealed as just another excuse for brutal exercise of power. The Fundamentalists themselves tore the mask away the moment they had to, to invoke Market Socialism to save themselves.
Bliffle, you might have an argument, had the free market actually been operating here. The problem is not the free market, it is the socialization of markets which began with the creation of institutions like Fannie Mae and Freddie Mac and which they perpetuated and ultimately pursued into corruption and despotism as is always the outcome of socialism.
Socialism always turns into oligarchy and oligarchy becomes plutocracy when there is money as well. By introducing socialism into the marketplace with Fannie and Freddie FDR opened the door to the inevitable corruption of the financial sector.
Had free markets been in operation then they would never have been willing to take the risks they did, or would have had to live with the consequences if they did.
Dave
43 - handyguy
Maybe Dave really does believe what he just wrote. It's just extreme enough to be sincere. But it is unproven, unprovable ideologically-based nonsense.
44 - DaveNalle
Handy, while the viability of a truly free market as an alternative to what we're experiencing here is indeed unproven, the theory would certainly appear to be sound.
But what is NOT unproven is that socializing risk, excessive government control on the economic sector, imposing unrealistic lending criteria for political correctness, and using our financial institutions to underwrite political corruption do NOT work.
This bailout just allows us to whitewash over the root problems and put new institutions in the position which Fannie and Freddie were in. If it's not followed by an investigation which includes holding political figures accountable and some sort of fundamental changes in policy it's all worthless.
Dave
45 - Matthew
One more thing I will add.
The "McCain tried to warn us in 2005" is bunk!!!!
It was actually Chuck Hagels bill. McCain didnt jump on board until a year later in May 2006 when the bubble was beginning to pop, and the political winds were changing.
46 - from the Past
Nalle trying to spin his way out of Reality and the irresponsibility of his partisan allies deregulating everything to complete Hell...
mwahahahhAHAHHHAhaahAHAHHAhahaaa...
good to see that even after a long interval, some hypocrisies never change....
it took all of 10 seconds to find...well done indeed
47 - Christopher Rose
The Texas Sidewinder can't help its nature, nor you apparently old bud.
48 - from the Past
had to pop in at lunch, to prove a point to a friend, point made...cameo finished, Christopher
i'll not darken your *door* unless i need to show someone proof of something idiotic again
hope all is going well for you, EO and the rest, i'd like to say i miss this place..and in some ways i do...
but i'm very happy to be rid of it, all things considered...
good luck
49 - Pablo
It is a cold day in hell when I agree with Nalle about anything. This is one of them.
50 - DaveNalle
The "McCain tried to warn us in 2005" is bunk!!!!
It was actually Chuck Hagels bill. McCain didnt jump on board until a year later in May 2006 when the bubble was beginning to pop, and the political winds were changing.
The bill was written by Hagel and John Sunnunu. McCain came on board a few months later when the bill was in danger of failing, becoming a cosponsor and making his much quoted and prophetic speech predicting the current disaster on May 25th of 2006. The bill ultimately failed because democrats held it up in committee on procedural grounds until the session expired.
Now what was your point again? That McCain was only 2 years ahead of the rest of the Senate in being concerned about this issue?
Dave
51 - DaveNalle
It is a cold day in hell when I agree with Nalle about anything. This is one of them.
Sadly, all too late to do anything about it now.
Dave
52 - bliffle
Dave is grasping at straws as the mock capitalism he's been championing, implemented by crooks that he's been vociferously alibiing for, is crashing down around his head.
Instead of standing up like a MAN and taking responsibility for the crap he's advocated for the USA and the results that has caused, he whines and blames it on a 1933 FNMA institution!
Come on Dave! 'Fess up. It's a Frankenstein!
And stop whining that it's not 'pure' free markets, and trying to convince us that we need more of the same.
53 - Baronius
Matthew, that WSJ citation of yours is an opinion piece written by Thomas Frank, author of What's the Matter with Kansas and The Wrecking Crew: How Conservatives Rule. He is an outspoken critic of the Republican Party.
Then there's the BusinessWeek article. It really doesn't stand up to scrutiny. The CRA was passed in 1977 if I recall correctly, but has been modified repeatedly. It was strengthened in the Clinton years, and compounded by similar legislation during this administration. The CRA isn't the only problem, but it is part of a system which encourages risky loans.