Do you think the US will become socialist in the next 4 years? - Tilted Forum Project Discussion Community

ASU2003 · 01-02-2009, 06:39 PM

Or maybe the question should be, will we have to be? If this turns out to be the Great Depression V.2, where there are no new jobs, no new technology advances, and just the same 'efficient' companies operating with fewer and fewer consumers able to afford, need or desiring their products and services?

I'm not saying it would be a good thing or the right thing to do, but it does seem like the direction we are going in. And technology and the internet might be helping. Are more and more people living like me (really cheaply and frugally?), or am I just strange and weird? But I know that I am not really helping to get the economy moving again. Will the government have to tax me in order to provide basic services for everyone?

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Maybe it is just how I am living my life and thinking that everyone else is doing the same thing. There are many days where I don't spend any money and only have utility bills, some grocery items and taxes as my expenses. The utilities aren't private companies and have price controls/government oversight, farms are subsidized and taxes pay for government services. In my personal life, exercise is free with no re-occurring costs (after acquiring the proper equipment). The internet is free and I can get CNN, NPR, Fox News, Comedy Central shows for free (I am using a 4 year old computer that runs Linux Mint and didn't cost much). Digital over-the-air TV is free and the quality is perfect on my HDTV (I did have to buy the HDTV). Youtube, Hulu, Fox, NBC, even amateur adult videos are free (some have a few seconds of commercials). I use the public library to read books. And I listen to the radio to get my free music, my iPod has plenty of songs from the radio on it

(I did buy the iPod and gave Apple a one time fee, but I will be happy with it for years). I have purchased all of the HD DVDs that I need, and maybe in a few years when I get through them all I will rent some. Gas (petrol) and oil I still buy, but I am working on reducing that amount greatly in the next few months. Since I will be able to walk to work, it will go down a lot. And I am working on a way for the Sun to add some heat to my house, so I will use less natural gas too. I'm not in the market for a car anytime soon, and it looks like the government will own part of them anyway. Health insurance is taken out of my paycheck just like taxes. I wouldn't be able to tell the difference if the government run health care system got my money or a company did. I do have a cell phone with a capitalist type of corporation, and I have a monthly fee with that. It is the only monthly service fee I have.

Willravel · 01-02-2009, 06:50 PM

Become socialist? No. Become somewhat less free market, Reaganomics-esque capitalist? I hope so. If not, the recovery will take a lot longer.

pointbock69 · 01-02-2009, 10:32 PM

It's hard to say, I think if Obama was able to actually instate all of the policies that he would like to, we would definitely become more socialist, but it is not likely that ALL of his policies would pass and be put in place. It would take the US a lot longer than 4 years to become as Socialist as Canada. Canada ain't so bad, but I don't really want that here!

Speed_Gibson · 01-03-2009, 10:23 AM

I would say no that question, but Obama will likely carry on the Roosevelt/JFK torch as best he can.
I have very dim hopes for this country with this next president - definitely an inauguration I will be missing. But life does go on, and there will no doubt be will be some other Left/Right/Centrist president I am not happy with after him.

dksuddeth · 01-04-2009, 07:06 AM

The upcoming and inevitable federal government expansion will be HUGE compared to the last 70 years. It will not become socialist by any means. What you will see is an ever more powerful central government that becomes staffed with familial rulers. How that pre-determined heirarchy will run the economy is a surprise.

dc_dux · 01-04-2009, 10:02 AM

I dont expect a HUGE federal government expansion.

I do expect a significant overturning (over time) of many of the Bush regulatory "reforms"

ANd I do expect a significant short-term investment or infusing of federal spending to kick-start the economy. If it succeeds, it will stimulate HUGE new private investment, particularly in "green" initiatives.
-----Added 4/1/2009 at 01 : 05 : 33-----
And lastly, I think we will see a much more transparent government.

guyy · 01-12-2009, 01:08 AM

How would we know if it did?

ASU2003 · 01-12-2009, 05:28 AM

Quote:

Originally Posted by guyy

How would we know if it did?

-National, universal health care
-Government subsidies of business they want to see succeed
-Less focus on work and money, more on friends, family, vacation time
-Retirement will be provided, less risky way of investing than in the stock market
-Prices of certain necessities are controlled or subsidized to be an affordable price

I don't know, maybe it would be different, maybe there are other things. I was focusing more on the economic side of things.

roachboy · 01-12-2009, 05:34 AM

maybe the category "socialist" isn't useful in this context.

Baraka_Guru · 01-12-2009, 07:25 AM

Maybe it's not meant as "socialist" as a category so much as "socialist" as an adjective applied to policies not unlike what you find here in Canada--like the policies supported and put forth by, say, the NDP (a minority democratic socialist party within a parliamentary system).

roachboy · 01-12-2009, 07:45 AM

understood, but even if democratic socialist style policies are put into place, it hardly follows that the united states would "become socialist"....

Baraka_Guru · 01-12-2009, 08:45 AM

True, and—that said—I doubt it even could be done in only 4 years.

I think the U.S. could become more socialist in that time, and from what I've seen, that would probably be a good thing.

roachboy · 01-12-2009, 09:05 AM

well, if it did all of a sudden come to pass that the us was magically transformed, guyy's question is about right.

and universal health care seems to me a marker of civilization than of socialism.

the point's probably been beat to death now, so i'll stop.

carry on.

Dead_man · 01-12-2009, 11:52 AM

Quote:

Originally Posted by ASU2003

-National, universal health care
-Government subsidies of business they want to see succeed
-Less focus on work and money, more on friends, family, vacation time
-Retirement will be provided, less risky way of investing than in the stock market
-Prices of certain necessities are controlled or subsidized to be an affordable price

I don't know, maybe it would be different, maybe there are other things. I was focusing more on the economic side of things.

lol among that piece of brilliant propaganda entitled "here are all the good things" about Socialism ...
You also forgot:

Entrenched power in government with little hope to change it.
Increased Nepotism, a newer and more distinct line between poor and rich.
Permanent class of poor (well, increased government dependence anyway)
Increased Federal power, decreased State power (kill the Republic)
Governmental control of the private sector and the economy (yep, the same folks who couldn't run their own cafeteria want to drill your oil and reap the profits)

As much of a right-winger as I can be, I don't see us going 100% socialist. I see us getting feared to death with gullobal warming and being punished for being successful, or being guilted into giving up our prosperity. I see Obamessiah pulling a "great society" and it will be praised to high heaven even though it is why the real and actual great depression lasted longer.

roachboy · 01-12-2009, 12:10 PM

you know, one of the funniest---and most immediately disqualifying--of these limbaugh-level statements about what you imagine democratic socialism to be are the bits concerning nepotism, the meaning of which you don't seem to quite have nailed down, and the laughable charge that democratic socialism increases class divisions. since you speak from the outer reaches of talk radio conservatism, i wouldn't expect you to know about the massive transfers of wealth under the regimes dominated by your boys reagan and bush.

look it up.
i'll help you out later if you can't manage it.

it's a bit amazing that folk manage to keep this paleo-conservative worldview intact after it's been pulverized by the real world.

but it's not at all amazing that those who hold to this paleo-conservatism have no fucking idea what they're talking about when it comes to democratic socialism.

Willravel · 01-12-2009, 12:10 PM

Quote:

Originally Posted by Dead_man

Increased Nepotism, a newer and more distinct line between poor and rich.

Socialism, communism, and other similar methods of organizing government and economy are centered around the importance of equality. They evolved from the idea that a society can think and behave collectively, and that because there is a collective effort, there should be collective rewards. Moreover, it's a staple of socialism and communism to ensure that there are no destitute...

Quote:

Originally Posted by Dead_man

Permanent class of poor (well, increased government dependence anyway)

First, these are not the same thing. Increasing government dependence—like universal healthcare, a 100% public prison system, or public broadcasting—does not necessarily mean that the poor will be enabled. What does it mean? It means that people won't be left behind. Moreover, more social programs aimed at elevating people out of poverty, assuming at least some are succesful, will mean less poor. The conservative assumption that, with government assistance comes unhealthy dependence (and eventually lethargy) is unsupported. Do you know how many people on welfare have full time jobs? The answer might surprise you.

Baraka_Guru · 01-12-2009, 12:27 PM

The poor is a permanent class. The democratic socialists I know are far more concerned about this than the conservatives I know. (Unless you wish to count band-aid-solution vote-buying.)

Charlatan · 01-12-2009, 02:14 PM

It is always amazing to me how deeply ingrained the philosophies of neo-liberalism are. So much so that many aren't even aware they are espousing it.

Baraka_Guru · 01-12-2009, 03:16 PM

Charlatan, some things are doomed to die a slow death, and then we take a while (sometimes a long while) to recover from the hangover. Kind of like with Romanticism...and postmodernism.

roachboy · 01-12-2009, 03:49 PM

in the domestic ideological bubble particular to the states, neoliberalism still has no name.
when it's referenced, it isn't even described as an ideology--it's a type of capitalism.

ASU2003 · 01-12-2009, 05:48 PM

There were a few more things I forgot to add to the list

-Targeted taxes against 'bad' products or substances
-Limited executive pay (14x-25x lowest paid worker)
-Strict environmental laws/more mass transit
-More government run monopolies/services
-Government owning natural resources (or is this only in communism?)

I'm sure we will see a little bit more of a mixed-economy in the next decade, and that probably won't be a bad thing. I'm not exactly cheering for massive change, but certain action does need to be taken to fix some problems. If income taxes can be kept at current levels, I'm not going to be impacted very much either way. But with everything, you need to look at who benefits and who loses, and the people who would lose tend to be more vocal about it.

roachboy · 01-12-2009, 07:02 PM

in countries where democratic socialist parties are significant, the objectives are usually to set up mixed economies geared around goals like full employment and/or reducing to the greatest possible extent poverty. the state is what is typically is under capitalism--a mechanism for allocating resources (in a big-ish sense)--what the state ends up doing in a mixed economy is a function of the political goals that frame it.

in other words, the only political situation in which there would be arbitrary state functions is a neo-liberal dominated one, simply because the ideology a priori excludes thinking about the state as functional and so precludes developing goals for it--except of course for military procurement, repressive functions and other such things that benefit the particular interests of the neoliberals who happen to occupy power--but as we've all seen with the bush squad trying to cope with a significant financial crisis, because neoliberals are ideologically opposed to thinking about the state as part of a functional capitalist order, they have little idea what to do when they need to address problems that go beyond killing or controlling people (police functions)...

so the main political choice concerns the overall goals that shape system regulation. the state is a mechanism for adjusting the ways in which the capitalist systems operate in the direction of those goals.

i say it this way because it's not given in advance what such a system might look like, particularly in a context where a democratic-socialist style approach is unhinged from a strong trade union movement. i'm not sure that there is traditional democratic socialism without unions, frankly. that's one reason why i do not consider obama to be one. there are alot of others, but that's one.

the reason i did not really participate in the thread as it was framed up to now is simlpy that to wonder if the us will "become socialist" is a wholesale mis-statement of what democratic socialism was and is, has done and may do.

there are very specific historical reasons for this which go back to the splitting away of reformists and revolutionaries just before world war 1--the split ended up being pretty simple, but the jist of it is that the reformists (who became the german spd) iod not think revolution was coming any time soon, so the objective became to work to make the lives of working people materially better in the short run. if you think revolution is coming soon, there's no point in that--the revolution relies on contradictions within capitalism if you like and the outcome would eradicate the problems.

so democratic socialism in general produces a variant of capitalism, not something else, not something outside or beyond capitalism.

don't believe the american conservatives on this: they have no idea what they're talking about. they're mostly about scaring the shit out of their constituency. socialism is for them just another bogeyman. it only means "something scary" really. what they attribute to it is more about the collective psychology of american conservatism than about phenomena in the world beyond that.

flstf · 02-19-2009, 01:47 PM

I don't know if we will become more of a socialist country but there is something wrong with a system that rewards financially failed banks (and their officers) with billions/trillions in bailouts but will toss financially failed families out in the street. Governments should try to act with some sense of fairness.

roachboy · 02-19-2009, 01:57 PM

a little over a month later, what i'd say is that the us had bloody well better become more democratic socialist, and quickly, or the house of cards will implode.

Cynthetiq · 02-19-2009, 02:43 PM

I really wish I understood the -isms that everyone is tossing about and understand them from the exact point that is individually being responded. I don't think that Charlatan's neo-liberalism is the same as roachboy's...

maybe I'm just jaded.

roachboy · 02-19-2009, 03:26 PM

i think there's more or less the same, cyn.
monetarism, "the washington consensus," "free market fundamentalism" "cowboy capitalism"--all more or less the same things.

powerclown · 02-19-2009, 04:37 PM

Quote:

Originally Posted by ASU2003

Or maybe the question should be, will we have to be? If this turns out to be the Great Depression V.2, where there are no new jobs, no new technology advances, and just the same 'efficient' companies operating with fewer and fewer consumers able to afford, need or desiring their products and services?

How much more taxpayer money does the good President have to spend bailing out car companies, banks and insurance companies before its considered socialist? He's making Hugo Chavez look like Justice Clarence Thomas. This is a spending spree the likes of which an obsessive compulsive, manic depressive shopaholic might be proud. 3 million new jobs you say? How, when, where??

Baraka_Guru · 02-19-2009, 05:03 PM

Well, if American conservatives knew how to balance a budget, it wouldn't seem so bad at this point in time.

powerclown · 02-19-2009, 06:19 PM

Poppycock. It was Christopher Dodd and Bawney Fwank, both Dems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, who denied that there were any problems as the bubble was growing and growing, and who were still pushing for these agencies to go even further in promoting sub-prime mortgage loans almost up to the minute they failed. The Dems did this for a specific reason: to 'help' the lower classes by ensuring everyone was entitled to own their own home - qualified and capable or, not.

murp0434 · 02-19-2009, 07:54 PM

Quote:

Originally Posted by flstf

I don't know if we will become more of a socialist country but there is something wrong with a system that rewards financially failed banks (and their officers) with billions/trillions in bailouts but will toss financially failed families out in the street. Governments should try to act with some sense of fairness.

BINGO!!! That's the problem with the stimulus package, it doesn't address the root of the problems that we're having, it just basically gives a big middle finger to america saying, see, lobbying DOES work! Anybody at all who was asking for money got it in this amazing display of political pandering. I thought Obama was going to be better than this...I don't know why...but for the love of God just b/c Rick Wagoner and his band of hooligans show up in a jetstream and ask for a billion dollars doesn't mean you have to give it to them. Or the banks for that matter....jeez they already have all of your money in their hands and now they need more.....then they get the money and hoard all if it? no matter...hand them more! wait the big three need money? Give it to 'em? sex ed classes? bridge to nowhere? redecorate mayor Bob's Office in Gun Barrel city, tx? what the heck! It's only debt when your great-great-great grandchildren will still be paying it off! Don't worry about creating jobs, I'm sure the economy will be nice and stimulated by the time the work from all these CCC-style projects run out...

anyway anyone who disagrees about the pork-bus find out for yourself: ReadTheStimulus.org and have fun.

I'm still a supporter don't get be wrong but I've definitely lost a lot of faith...hopefully he knows more than I do is all I can say. sounds kinda funny coming from a democrat huh...

guyy · 02-19-2009, 08:24 PM

Only 1/3 of CRA loans were subprime, which is pretty good when you think about the people they were lending to. On top of that, investment banks and non-bank lenders had nothing to do with CRA -- and surprise, surprise, where do we see the most spectacular crashes? Lehman Bros., Bear Stearns, New Century... oh my.

According to the Bush's Federal Reserve, the vast majority of subprime loans in 2006 -- 84%! -- were made by Heroes of Finance in the private sector. You know that if you even visited an American home during the Glorious Eight. It wasn't Freddie Mac or Fannie Mae that were calling you at dinner time to get you to refinance with Nachtschwärmer Mortgage. No, it was Nachtschwärmer Mortgage with CDO backing by the wise old owls at Bear Stearns or AIG. In fact, the Bush crew kept Freddie Mac and Fannie Mae out of the mortgage market so as not to compete with our Heroes of Finance and their Very Excellent Work. Under Clinton, Fannie Mae and Freddie Mac had been the dominant players, with their hands on 82% of the nations mortgages, but the roles of public and private lenders were reversed during those Happy Days of the Bush reign. Why?

ASU2003 · 02-19-2009, 08:27 PM

Quote:

Originally Posted by powerclown

Poppycock. It was Christopher Dodd and Bawney Fwank, both Dems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, who denied that there were any problems as the bubble was growing and growing, and who were still pushing for these agencies to go even further in promoting sub-prime mortgage loans almost up to the minute they failed. The Dems did this for a specific reason: to 'help' the lower classes by ensuring everyone was entitled to own their own home - qualified and capable or, not.

I don't blame the 'poor' people for the housing mess. I lived in Phoenix during the start of the bubble, and the poor people or people who were buying houses bigger than they needed weren't as common as you might think.

A certain radio host never mentions there was a huge number of first time real estate investors that were getting these 0 down, interest only loans. They wanted to hold on to a house for a few months and then sell it to another people who wasn't going to live in the house, but for a higher price. There were also the real estate investment companies that bought 'ugly houses' and new developments. This increased the price for first time homebuyers that would then be considered 'poor'. This massive move to invest in real estate and get a quick (low tax) buck was what fueled the increase in house prices. Not that massive amounts of minimum wage workers were getting loans for $400,000 houses.

You also have people who can afford the payments, but don't see the point when the house they bought two years ago for $350,000 is now worth $200,000. Instead of selling it and still having to pay the bank back the rest over the next 30 years, they choose to walk away because they will lose less. And with unmarried partners, if only one of them is on the first house title/loan, the other one can still buy a house with no problem the next day.

YouTube - The People Problem... Not Housing Problem

powerclown · 02-20-2009, 09:52 AM

Quote:

Originally Posted by ASU2003

I don't blame the 'poor' people for the housing mess. I lived in Phoenix during the start of the bubble, and the poor people or people who were buying houses bigger than they needed weren't as common as you might think.

I first blame the mortgage companies for dangling the dream of home ownership based on a faulty arrangement. It was greed; the fundamental transaction was flawed. Then come the politicians for allowing (and encouraging) this lending behavior to continue. Next, the people who bought houses only to sell them for a profit. Finally we have Joe Homeowner who, while simply wanting a house to live in, made the decision to buy the Cadillac on a Toyota budget.

Quote:

Fannie Mae Eases Credit To Aid Mortgage Lending - New York Times

Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.

--

Quote:

New Agency Proposed to Oversee Freddie Mac and Fannie Mae - New York Times
New Agency Proposed to Oversee Freddie Mac and Fannie Mae
By STEPHEN LABATON
Published: September 11, 2003

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac -- which together have issued more than $1.5 trillion in outstanding debt -- is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

''There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,'' Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.

Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.

The administration's proposal, which was endorsed in large part today by Fannie Mae and Freddie Mac, would not repeal the significant government subsidies granted to the two companies. And it does not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enables them to issue debt at significantly lower rates than their competitors. Nor would it remove the companies' exemptions from taxes and antifraud provisions of federal securities laws.

The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session.

After the hearing, Representative Michael G. Oxley, chairman of the Financial Services Committee, and Senator Richard Shelby, chairman of the Senate Banking Committee, announced their intention to draft legislation based on the administration's proposal. Industry executives said Congress could complete action on legislation before leaving for recess in the fall.

''The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,'' Mr. Oxley said at the hearing. ''We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,'' the independent agency that now regulates the companies.

''These irregularities, which have been going on for several years, should have been detected earlier by the regulator,'' he added.
The Office of Federal Housing Enterprise Oversight, which is part of the Department of Housing and Urban Development, was created by Congress in 1992 after the bailout of the savings and loan industry and concerns about regulation of Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.

At the time, the companies and their allies beat back efforts for tougher oversight by the Treasury Department, the Federal Deposit Insurance Corporation or the Federal Reserve. Supporters of the companies said efforts to regulate the lenders tightly under those agencies might diminish their ability to finance loans for lower-income families. This year, however, the chances of passing legislation to tighten the oversight are better than in the past.

Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration's package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company's mission.

After those assurances, Franklin D. Raines, Fannie Mae's chief executive, endorsed the shift of regulatory oversight to the Treasury Department, as well as other elements of the plan.

''We welcome the administration's approach outlined today,'' Mr. Raines said. The company opposes some smaller elements of the package, like one that eliminates the authority of the president to appoint 5 of the company's 18 board members.

Company executives said that the company preferred having the president select some directors. The company is also likely to lobby against the efforts that give regulators too much authority to approve its products.

Freddie Mac, whose accounting is under investigation by the Securities and Exchange Commission and a United States attorney in Virginia, issued a statement calling the administration plan a ''responsible proposal.''

The stocks of Freddie Mac and Fannie Mae fell while the prices of their bonds generally rose. Shares of Freddie Mac fell $2.04, or 3.7 percent, to $53.40, while Fannie Mae was down $1.62, or 2.4 percent, to $66.74. The price of a Fannie Mae bond due in March 2013 rose to 97.337 from 96.525.Its yield fell to 4.726 percent from 4.835 percent on Tuesday.

Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.

''The regulator has not only been outmanned, it has been outlobbied,'' said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ''Being underfunded does not explain how a glowing report of Freddie's operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.''

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

Representative Melvin L. Watt, Democrat of North Carolina, agreed. ''I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said.

--

The Democrats supported lowering lending standards so more minorities could buy homes. Now, in 2009, which groups do you think are suffering the most from foreclosures?

guyy · 02-20-2009, 10:58 AM

The general thrust of Bush regulation of Freddie Mac and Fannie Mae was to shift lending to private companies, and the proposed oversight agency would have done exactly that. 84% of subprime mortgages were with private lenders, and as i pointed out above, that is where the problem was. The article you cite doesn't help your case at all.

ASU2003 · 02-20-2009, 06:18 PM

Quote:

The Democrats supported lowering lending standards so more minorities could buy homes. Now, in 2009, which groups do you think are suffering the most from foreclosures?

People who lose their jobs and didn't save are a large part of it. But there were lots of middle to upper income people who bought a second, third or forth house because they could with the new lending rules that they used in their favor. When the price of homes went up, they were making money, but when the prices went down, they stopped making payments and with the 80/20 lending, PMI insurance, interest only loans, these investors were able to walk away by foreclosing and leave the banks holding a depreciating asset. Why would they want to pay for a house they can't sell for a profit?

Both groups are to blame, and I would support increasing their taxes for the next 10 years.

flstf · 02-20-2009, 11:09 PM

Quote:

Originally Posted by powerclown

I first blame the mortgage companies for dangling the dream of home ownership based on a faulty arrangement. It was greed; the fundamental transaction was flawed. Then come the politicians for allowing (and encouraging) this lending behavior to continue. Next, the people who bought houses only to sell them for a profit. Finally we have Joe Homeowner who, while simply wanting a house to live in, made the decision to buy the Cadillac on a Toyota budget.

The Democrats supported lowering lending standards so more minorities could buy homes. Now, in 2009, which groups do you think are suffering the most from foreclosures?

I agree there were irresponsible lenders and borrowers. When prices fall and adjustable rates increase some will be unable to refinance and there will be foreclosures and mortgage holders will take a loss. Sure it's tough to take a 20-30% loss (many of us have lost that much recently in the market) but we should be able to take our lumps and move on.

But the terrible thing that has happened here is that these mortgages were bundled and leveraged to the point that the entire world's banking systems and economies are now failing all because of a real estate price correction. A correction that most halfway intelligent people knew was way over due. The people who are responsible for these derivatives, tranches, hedge funds or whatever they are called have done far worse than irresponsible borrowers. Instead of investors just taking a loss we must now go through world wide economic collapse.

So it looks like those responsible for this mess will be bailed out and there will be Socialism at the top but most of us will have to fend for ourselves.

dippin · 02-21-2009, 01:29 AM

Quote:

Originally Posted by powerclown

The Democrats supported lowering lending standards so more minorities could buy homes. Now, in 2009, which groups do you think are suffering the most from foreclosures?

This is grade A BS fed by republicans. First of all, the idea that it was the lowered lending standards of fannie mae and freddie mac that caused this mess is BS. While they were certainly a part of the mess, they carried less subprime and alt-A mortgages than most banks.

And as an aside, the idea that it was the CRA or similar measures that caused this mess is nothing more than unsubstantiated race baiting.

About half the sub-prime loans have been made by companies (independent mortgage companies and so on) that are not regulated by the CRA and had no dealings with freddie and fannie, and another 25 to 30% came from companies and banks only partially regulated by it.

Now, which groups are suffering the most from foreclosures? Well, I don't know. But Im thinking that the reason that Las Vegas, NV, Boca Raton, Orlando and Miami in FL, and Riverside county in CA are all in the top 10 in foreclosures is not because lenders were trying to offer easy loans to low income minorities. Nevada still tops the nation in foreclosures as a state...

Now, if one wanted to really understand this mess, they'd look at papers like
http://www.newyorkfed.org/research/s...orts/sr318.pdf

instead of easy partisan talking points.

flstf · 02-21-2009, 06:37 AM

Quote:

Originally Posted by dippin

Now, if one wanted to really understand this mess, they'd look at papers like
http://www.newyorkfed.org/research/s...orts/sr318.pdf

instead of easy partisan talking points.

I skimmed this document and halfway understand how bad loans were made. What I don't understand is how or why the institutions involved took these loans and bundled them into leveraged packages that totaly collapsed the world's banking systems because the inflated real estate market corrected. Why couldn't they just take the loss? Why were they leveraged so much that a reasonable drop in real estate prices caused most of the major banks to go belly up? And the most important question is why did our government regulators allow this to happen?

I realize that there is probably greed and political corruption involved but even the ruling classes should not want to kill the goose that lays the golden eggs.

ASU2003 · 02-21-2009, 07:16 AM

Quote:

Originally Posted by flstf

I skimmed this document and halfway understand how bad loans were made. What I don't understand is how or why the institutions involved took these loans and bundled them into leveraged packages that totaly collapsed the world's banking systems because the inflated real estate market corrected. Why couldn't they just take the loss? Why were they leveraged so much that a reasonable drop in real estate prices caused most of the major banks to go belly up? And the most important question is why did our government regulators allow this to happen?

I realize that there is probably greed and political corruption involved but even the ruling classes should not want to kill the goose that lays the golden eggs.

I don't think the banks expected it to crash. They probably thought that it might go down a little or not have any growth for a few years, but not crash. In the 60 minutes interview they looked at a Miami condo that sold for $2 million, and when the buyer walked away, the bank sold it for $935,000 or something. That is a 1 million dollar loss that the banks expected the insurance agency to cover. Then repeat this all over the country. But when the investors saw the mess that was coming, and realized that they were going to have to pay out a lot of money and weren't going to make any profits, they all sold. With their stock price really low, they couldn't survive and had to get bailout by the fed or sold to another company.

Here is last week's Frontline. It explains it pretty well.
FRONTLINE: inside the meltdown | PBS

flstf · 02-21-2009, 09:51 AM

Thanks ASU2003, I watched the Frontline link. It was interesting to see the conservatives torn between "moral hazzard" and "systemic collapse". Some of them transistioned from capitalists to socialists in a few short months when it comes to Wall Street.

I don't think things are as bad as your Florida example and the vast majority of homeowners are making their payments. It seems like these institutions have set themselves up and are so leveraged that they can't survive a small percentage of foreclosures.

01-02-2009, 06:39 PM	#1 (permalink)
ASU2003 immoral minority Location: Back in Ohio	Do you think the US will become socialist in the next 4 years? Or maybe the question should be, will we have to be? If this turns out to be the Great Depression V.2, where there are no new jobs, no new technology advances, and just the same 'efficient' companies operating with fewer and fewer consumers able to afford, need or desiring their products and services? I'm not saying it would be a good thing or the right thing to do, but it does seem like the direction we are going in. And technology and the internet might be helping. Are more and more people living like me (really cheaply and frugally?), or am I just strange and weird? But I know that I am not really helping to get the economy moving again. Will the government have to tax me in order to provide basic services for everyone? ---------------------------------------------------------------------------------------------------------------------------------- Maybe it is just how I am living my life and thinking that everyone else is doing the same thing. There are many days where I don't spend any money and only have utility bills, some grocery items and taxes as my expenses. The utilities aren't private companies and have price controls/government oversight, farms are subsidized and taxes pay for government services. In my personal life, exercise is free with no re-occurring costs (after acquiring the proper equipment). The internet is free and I can get CNN, NPR, Fox News, Comedy Central shows for free (I am using a 4 year old computer that runs Linux Mint and didn't cost much). Digital over-the-air TV is free and the quality is perfect on my HDTV (I did have to buy the HDTV). Youtube, Hulu, Fox, NBC, even amateur adult videos are free (some have a few seconds of commercials). I use the public library to read books. And I listen to the radio to get my free music, my iPod has plenty of songs from the radio on it (I did buy the iPod and gave Apple a one time fee, but I will be happy with it for years). I have purchased all of the HD DVDs that I need, and maybe in a few years when I get through them all I will rent some. Gas (petrol) and oil I still buy, but I am working on reducing that amount greatly in the next few months. Since I will be able to walk to work, it will go down a lot. And I am working on a way for the Sun to add some heat to my house, so I will use less natural gas too. I'm not in the market for a car anytime soon, and it looks like the government will own part of them anyway. Health insurance is taken out of my paycheck just like taxes. I wouldn't be able to tell the difference if the government run health care system got my money or a company did. I do have a cell phone with a capitalist type of corporation, and I have a monthly fee with that. It is the only monthly service fee I have.

01-03-2009, 10:23 AM	#4 (permalink)
Speed_Gibson Who knows what evil lurks in the hearts of men? Location: right here of course	I would say no that question, but Obama will likely carry on the Roosevelt/JFK torch as best he can. I have very dim hopes for this country with this next president - definitely an inauguration I will be missing. But life does go on, and there will no doubt be will be some other Left/Right/Centrist president I am not happy with after him. __________________ Started talking to yourself I see. Yes, it's the only way I can be certain of an intelligent conversation. Black Adder

01-04-2009, 07:06 AM	#5 (permalink)
dksuddeth Junkie Location: bedford, tx	The upcoming and inevitable federal government expansion will be HUGE compared to the last 70 years. It will not become socialist by any means. What you will see is an ever more powerful central government that becomes staffed with familial rulers. How that pre-determined heirarchy will run the economy is a surprise. __________________ "no amount of force can control a free man, a man whose mind is free. No, not the rack, not fission bombs, not anything. You cannot conquer a free man; the most you can do is kill him."

01-04-2009, 10:02 AM	#6 (permalink)
dc_dux Location: Washington DC	I dont expect a HUGE federal government expansion. I do expect a significant overturning (over time) of many of the Bush regulatory "reforms" ANd I do expect a significant short-term investment or infusing of federal spending to kick-start the economy. If it succeeds, it will stimulate HUGE new private investment, particularly in "green" initiatives. -----Added 4/1/2009 at 01 : 05 : 33----- And lastly, I think we will see a much more transparent government. __________________ "The perfect is the enemy of the good." ~ Voltaire Last edited by dc_dux; 01-04-2009 at 10:05 AM.. Reason: Automerged Doublepost

01-12-2009, 05:34 AM	#9 (permalink)
roachboy Super Moderator Location: essex ma	maybe the category "socialist" isn't useful in this context. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

01-02-2009, 06:50 PM	#2 (permalink)
Willravel ... a sort of licensed troubleshooter.	Become socialist? No. Become somewhat less free market, Reaganomics-esque capitalist? I hope so. If not, the recovery will take a lot longer.

01-02-2009, 10:32 PM	#3 (permalink)
pointbock69 Registered User Location: Dallas, TX	It's hard to say, I think if Obama was able to actually instate all of the policies that he would like to, we would definitely become more socialist, but it is not likely that ALL of his policies would pass and be put in place. It would take the US a lot longer than 4 years to become as Socialist as Canada. Canada ain't so bad, but I don't really want that here!

01-12-2009, 01:08 AM	#7 (permalink)
guyy Addict Location: Cottage Grove, Wisconsin	How would we know if it did?

01-12-2009, 07:25 AM	#10 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	Maybe it's not meant as "socialist" as a category so much as "socialist" as an adjective applied to policies not unlike what you find here in Canada--like the policies supported and put forth by, say, the NDP (a minority democratic socialist party within a parliamentary system). __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

01-12-2009, 07:45 AM	#11 (permalink)
roachboy Super Moderator Location: essex ma	understood, but even if democratic socialist style policies are put into place, it hardly follows that the united states would "become socialist".... __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

01-12-2009, 08:45 AM	#12 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	True, and—that said—I doubt it even could be done in only 4 years. I think the U.S. could become more socialist in that time, and from what I've seen, that would probably be a good thing. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

01-12-2009, 09:05 AM	#13 (permalink)
roachboy Super Moderator Location: essex ma	well, if it did all of a sudden come to pass that the us was magically transformed, guyy's question is about right. and universal health care seems to me a marker of civilization than of socialism. the point's probably been beat to death now, so i'll stop. carry on. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

01-12-2009, 12:10 PM	#15 (permalink)
roachboy Super Moderator Location: essex ma	you know, one of the funniest---and most immediately disqualifying--of these limbaugh-level statements about what you imagine democratic socialism to be are the bits concerning nepotism, the meaning of which you don't seem to quite have nailed down, and the laughable charge that democratic socialism increases class divisions. since you speak from the outer reaches of talk radio conservatism, i wouldn't expect you to know about the massive transfers of wealth under the regimes dominated by your boys reagan and bush. look it up. i'll help you out later if you can't manage it. it's a bit amazing that folk manage to keep this paleo-conservative worldview intact after it's been pulverized by the real world. but it's not at all amazing that those who hold to this paleo-conservatism have no fucking idea what they're talking about when it comes to democratic socialism. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

01-12-2009, 12:27 PM	#17 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	The poor is a permanent class. The democratic socialists I know are far more concerned about this than the conservatives I know. (Unless you wish to count band-aid-solution vote-buying.) __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot Last edited by Baraka_Guru; 01-12-2009 at 12:30 PM..

01-12-2009, 02:14 PM	#18 (permalink)
Charlatan Getting it. Super Moderator Location: Lion City	It is always amazing to me how deeply ingrained the philosophies of neo-liberalism are. So much so that many aren't even aware they are espousing it. __________________ "My hands are on fire. Hands are on fire. Ain't got no more time for all you charlatans and liars." - Old Man Luedecke

02-19-2009, 02:43 PM	#25 (permalink)
Cynthetiq Tilted Cat Head Administrator Location: Manhattan, NY	I really wish I understood the -isms that everyone is tossing about and understand them from the exact point that is individually being responded. I don't think that Charlatan's neo-liberalism is the same as roachboy's... maybe I'm just jaded. __________________ I don't care if you are black, white, purple, green, Chinese, Japanese, Korean, hippie, cop, bum, admin, user, English, Irish, French, Catholic, Protestant, Jewish, Buddhist, Muslim, indian, cowboy, tall, short, fat, skinny, emo, punk, mod, rocker, straight, gay, lesbian, jock, nerd, geek, Democrat, Republican, Libertarian, Independent, driver, pedestrian, or bicyclist, either you're an asshole or you're not. What's the best nation in the world? DO-NATION!

01-12-2009, 03:16 PM	#19 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	Charlatan, some things are doomed to die a slow death, and then we take a while (sometimes a long while) to recover from the hangover. Kind of like with Romanticism...and postmodernism. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

01-12-2009, 03:49 PM	#20 (permalink)
roachboy Super Moderator Location: essex ma	in the domestic ideological bubble particular to the states, neoliberalism still has no name. when it's referenced, it isn't even described as an ideology--it's a type of capitalism. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

01-12-2009, 05:48 PM	#21 (permalink)
ASU2003 immoral minority Location: Back in Ohio	There were a few more things I forgot to add to the list -Targeted taxes against 'bad' products or substances -Limited executive pay (14x-25x lowest paid worker) -Strict environmental laws/more mass transit -More government run monopolies/services -Government owning natural resources (or is this only in communism?) I'm sure we will see a little bit more of a mixed-economy in the next decade, and that probably won't be a bad thing. I'm not exactly cheering for massive change, but certain action does need to be taken to fix some problems. If income taxes can be kept at current levels, I'm not going to be impacted very much either way. But with everything, you need to look at who benefits and who loses, and the people who would lose tend to be more vocal about it.

01-12-2009, 07:02 PM	#22 (permalink)
roachboy Super Moderator Location: essex ma	in countries where democratic socialist parties are significant, the objectives are usually to set up mixed economies geared around goals like full employment and/or reducing to the greatest possible extent poverty. the state is what is typically is under capitalism--a mechanism for allocating resources (in a big-ish sense)--what the state ends up doing in a mixed economy is a function of the political goals that frame it. in other words, the only political situation in which there would be arbitrary state functions is a neo-liberal dominated one, simply because the ideology a priori excludes thinking about the state as functional and so precludes developing goals for it--except of course for military procurement, repressive functions and other such things that benefit the particular interests of the neoliberals who happen to occupy power--but as we've all seen with the bush squad trying to cope with a significant financial crisis, because neoliberals are ideologically opposed to thinking about the state as part of a functional capitalist order, they have little idea what to do when they need to address problems that go beyond killing or controlling people (police functions)... so the main political choice concerns the overall goals that shape system regulation. the state is a mechanism for adjusting the ways in which the capitalist systems operate in the direction of those goals. i say it this way because it's not given in advance what such a system might look like, particularly in a context where a democratic-socialist style approach is unhinged from a strong trade union movement. i'm not sure that there is traditional democratic socialism without unions, frankly. that's one reason why i do not consider obama to be one. there are alot of others, but that's one. the reason i did not really participate in the thread as it was framed up to now is simlpy that to wonder if the us will "become socialist" is a wholesale mis-statement of what democratic socialism was and is, has done and may do. there are very specific historical reasons for this which go back to the splitting away of reformists and revolutionaries just before world war 1--the split ended up being pretty simple, but the jist of it is that the reformists (who became the german spd) iod not think revolution was coming any time soon, so the objective became to work to make the lives of working people materially better in the short run. if you think revolution is coming soon, there's no point in that--the revolution relies on contradictions within capitalism if you like and the outcome would eradicate the problems. so democratic socialism in general produces a variant of capitalism, not something else, not something outside or beyond capitalism. don't believe the american conservatives on this: they have no idea what they're talking about. they're mostly about scaring the shit out of their constituency. socialism is for them just another bogeyman. it only means "something scary" really. what they attribute to it is more about the collective psychology of american conservatism than about phenomena in the world beyond that. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

02-19-2009, 01:47 PM	#23 (permalink)
flstf Easy Rider Location: Moscow on the Ohio	I don't know if we will become more of a socialist country but there is something wrong with a system that rewards financially failed banks (and their officers) with billions/trillions in bailouts but will toss financially failed families out in the street. Governments should try to act with some sense of fairness.

02-19-2009, 01:57 PM	#24 (permalink)
roachboy Super Moderator Location: essex ma	a little over a month later, what i'd say is that the us had bloody well better become more democratic socialist, and quickly, or the house of cards will implode. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

02-19-2009, 03:26 PM	#26 (permalink)
roachboy Super Moderator Location: essex ma	i think there's more or less the same, cyn. monetarism, "the washington consensus," "free market fundamentalism" "cowboy capitalism"--all more or less the same things. __________________ a gramophone its corrugated trumpet silver handle spinning dog. such faithfulness it hear it make you sick. -kamau brathwaite

02-19-2009, 05:03 PM	#28 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	Well, if American conservatives knew how to balance a budget, it wouldn't seem so bad at this point in time. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

02-19-2009, 06:19 PM	#29 (permalink)
powerclown Junkie Location: Detroit, MI	Poppycock. It was Christopher Dodd and Bawney Fwank, both Dems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, who denied that there were any problems as the bubble was growing and growing, and who were still pushing for these agencies to go even further in promoting sub-prime mortgage loans almost up to the minute they failed. The Dems did this for a specific reason: to 'help' the lower classes by ensuring everyone was entitled to own their own home - qualified and capable or, not.

02-19-2009, 08:24 PM	#31 (permalink)
guyy Addict Location: Cottage Grove, Wisconsin	Only 1/3 of CRA loans were subprime, which is pretty good when you think about the people they were lending to. On top of that, investment banks and non-bank lenders had nothing to do with CRA -- and surprise, surprise, where do we see the most spectacular crashes? Lehman Bros., Bear Stearns, New Century... oh my. According to the Bush's Federal Reserve, the vast majority of subprime loans in 2006 -- 84%! -- were made by Heroes of Finance in the private sector. You know that if you even visited an American home during the Glorious Eight. It wasn't Freddie Mac or Fannie Mae that were calling you at dinner time to get you to refinance with Nachtschwärmer Mortgage. No, it was Nachtschwärmer Mortgage with CDO backing by the wise old owls at Bear Stearns or AIG. In fact, the Bush crew kept Freddie Mac and Fannie Mae out of the mortgage market so as not to compete with our Heroes of Finance and their Very Excellent Work. Under Clinton, Fannie Mae and Freddie Mac had been the dominant players, with their hands on 82% of the nations mortgages, but the roles of public and private lenders were reversed during those Happy Days of the Bush reign. Why?

02-20-2009, 10:58 AM	#34 (permalink)
guyy Addict Location: Cottage Grove, Wisconsin	The general thrust of Bush regulation of Freddie Mac and Fannie Mae was to shift lending to private companies, and the proposed oversight agency would have done exactly that. 84% of subprime mortgages were with private lenders, and as i pointed out above, that is where the problem was. The article you cite doesn't help your case at all.

02-21-2009, 09:51 AM	#40 (permalink)
flstf Easy Rider Location: Moscow on the Ohio	Thanks ASU2003, I watched the Frontline link. It was interesting to see the conservatives torn between "moral hazzard" and "systemic collapse". Some of them transistioned from capitalists to socialists in a few short months when it comes to Wall Street. I don't think things are as bad as your Florida example and the vast majority of homeowners are making their payments. It seems like these institutions have set themselves up and are so leveraged that they can't survive a small percentage of foreclosures.