Thanks Mary for making the argument so much better than I could ever explain.
Seems muck forgets about Milton Friedman, Ayn Rand and Alan Greenspan. Free market capitalism at its best... just ask Iceland.
I wonder if he has ever read "The Shock Doctrine"?
Posted by Seven of Six at November 22, 2008 09:00 PMLiberals and lazy black people and greedy union workers stole everybody's money. With the help of the liberal media, of course.
/Rush (believed by millions)
Posted by Sharkbabe at November 22, 2008 09:18 PMAh shucks, this is so silly it hilarious. I suppose we run the whole world now. Those Swiss banks, they just do anything we want them to do. English, Dutch, German, and French banks just wait for us to tell them how to do business. Someone mentioned Iceland, a country with a yearly GDP making about $20 billion a year whose banks were exposed upwards of $140 billion. Man, Spain is in a real depression right now...more than 4 quarters of negative growth folks.
Yeah, lets throw this one at that Greenspan character. Maybe even Volker, ah but he's advising Obama now. That's the easy way out. Did you ever look at the Basel Accords? Basel II? The worlds all including in this economic mess. One part will not be able to wall off the rest to stay healthy. We can't rely on the oceans sheltering us from others problems.
Now I find it amusing that Mary has actually placed the Clinton's(90's) in the lead for our faulty economy today. Maybe she didn't mean to imply that...Greenspan was his guy too!
Posted by peter at November 22, 2008 10:21 PMI see that GM wants to send $1 billion of it's bailout money to Brazil...
General Motors to Invest $1 Billion in Brazil Operations -- Money to Come from U.S. Rescue Program
By Russ Dallen
Latin American Herald Tribune staff
Yes, Greensap was a deregulating "conservative" cretin, who let Wall Street do whatever it wanted and thought that their own "self interest" would protect us---that "conservative" method worked really great in the 1920s, Alan, you shithead.
Repubs and Clintonian DLCers couldn't get Big Gub'mint out of Wall Street's way fast enough, and less than a decade after the repeal of all New Deal financial restrictions, we're in a bigger financial mess than 1932. So conservaturds not ony can't learn, they refuse to.
Hundreds of experts saw that a massive bubble in housing was developing during the comic low interest rate regime of Greensap, and since it was clear that real incomes had been stagnant, there was no actual basis for large numbers of these mortgages to work over the long haul or even if prices stabilized, let alone fell.
And what did our fine Bushco (you know, the "executive" branch) do as the bubble inflated? Yapped on even more about the "Ownership Society". Turned a blind eye to the endless new mortgage "products", which falsely pretended that these loans could be afforded. Ignored the massive increase in mortgage-backed securities which rested on these obviously dubious loans. And utterly ignored the insanity of the wholly unregulated "derivatives" market (thanks, Phil Gramm!), which was simple financial gambling and at bottom fraudulent "insurance" against risk on these loans.
Bushco's SEC--which is supposed to examine new private securities issued---what did they do in the past 8 years? Didn't even know what these mortgage backed securities were or how they worked, and couldn't have cared less. All the while granting ever more exemptions to the giant investment banks from the (weak) capital restrictions that DID exist. Basic malfeasance at every level---the motto of "conservatism". With Goldman's Hank Paulson there at every stage of the deregulation!
And what did the fine Repub House of Hastert and Dr. Bill Fristenstein's Team Repub do as the bubble inflated and the mortgage backed securities market exploded? Hold a single hearing investigating or even expressing concern over what these "derivatives" were? Hold a hearing on the slew of new mortgage products? Request a single new regulation on ANY of Wall Street's activities?
Nope, nothing, other than a half-hearted attempt to increase regs on the GSEs, which were always the Bogey-Men of the Right. And they couldn't even get that out of the Repub committee in the senate. And of you read the actual bill language, it would only have made things worse!
So this current crisis is well and truly the Deregulating Repub Recession, that's what the financial historians will conclude. It SHOULD usher in a tremendous new period of financial restrictions on Wall Street, and the giant banks, and the securitises houses, to the extent any come out of this alive.
Whether it will remains to be seen, as the foolish Mucks and pinhead peters continue to pour the right wing sewage down their throats and yap about the demonic borrowers. (hey muck, did you give up on your further qualification, demonic minority borrowers? I know that was part of your "diagnosis" earlier in the year---more right wing sewage)
Posted by euzoius at November 23, 2008 07:21 AMSo it was black and brown folks who rated the bonds AAA instead of junk with warnings?
Posted by TIKI AL at November 23, 2008 07:31 AMAs I've commented before, Europe blames US for the onging financial crisis----their banks bought shitloads of fraudulent American mortgage-backed securities (rated AAA investment grade by our fine fraudulent ratings agencies) and now their giant banks have been seriously compromised.
It is true that some---but by no means all---countries in Europe had a housing bubble that's now burst as well, but they didn't turn their bad mortgages into mortgage-backed securities anywhere near like we did (indeed, Wall Street probably bought their mortgages! But I don't know that). And they aren't experiencing anywhere near the default rates that we are, at least as far as I've seen.
So peter, your attempt at making the blame for the financial meltdown universal, and not simply GOoPer, fails as usual.
Posted by euzoius at November 23, 2008 07:37 AMHa-ha, ss if on cue, Calculated Risk has a post up about today's WaPo crisis article: "Banking regulator played advocate over enforcer".
Where was President Cheney? Oh, I forgot, this was a DOMESTIC policy issue, to be ignored later!
Posted by euzoius at November 23, 2008 08:24 AMSomeone mentioned Iceland, a country with a yearly GDP making about $20 billion a year whose banks were exposed upwards of $140 billion.
Not something you hear everyday... 5 injured during protest in Iceland over economic meltdown.
Yes, Iceland adopted unregulated "free market" capitalism and went completely broke.
About a third of Iceland's population of 320,000 are believed to have lost their savings.
Bush is responsible. He repeated the 1920's exactly - Coolidge (his hero) and Harding. Massive tax cuts to the wealthy and corporations, shouting deficits don't matter and the stock market is the final arbiter of the economy, deregulating and letting foxes guard the hen house.
It's probably more complicated, but he didn't help and certainly hurt.
Posted by jmac at November 23, 2008 02:45 PMWhat's happened in the last year isn't all that different than what happened to Enron except that it's happened on a much larger scale.
A division of Enron, along with several other energy companies, manipulated the energy prices and made enormous profits. Unfortunately, Enron, unlike the other energy companies, also had a division that insured against high energy prices. I don't remember the exact ratio but it went something like this. Let's say the division that manipulated prices increased their profits by $100 million over the previous year. That kicked in a multiplier effect for the division that handled insurance and they had to pay out let's say $700 million. That meant a $600 million shortfall. That wasn't smart corporate behavior. Normally Enron would have had the resources to handle that though it would have included getting loans. But their reckless behavior, particularly in accounting, had let to other problems including the Fastow scams. They looked up and had zero credibility just as in the last year a number of banks and investment houses on Wall Street looked and realized they had zero credibility. Some of these companies were leveraged 33 times above their real assets. Their people didn't care. Like Enron, the people on the floor were living off their bonuses, not the future of their companies.
Blaming minorities for the meltdown is typical right-wing behavior (if there's a problem, they always seem to find some group they hate to blame for the problem). What we have been seeing for years are giant profits for Wall Street and stagnant wages for nearly everyone else. But the meltdown is the proof just as the Great Depression was proof that lack of oversight leads to disaster. Republican economic philosophy, which is advocating deregulation, low taxes and free market principles while constantly bending the rules to engage in crony capitalism, is bankrupt, kaput, finis. We'll still have a capitalist economy but with some sort of reasonable rules, at least for another decade or two. But there has to be a focus on including a much wider spectrum of Americans in the economy and not organizing our society so that wealth repeatedly falls into the hands of the pathological few.
Posted by Craig at November 23, 2008 02:47 PM"Wall Street?" Put some flesh on it. "Wall Street" makes a nice scapegoat, but it's not accurate.
The consumer buying the home thought he could flip it in a few months and make tens of thousands.
The mortgage broker selling the loan skimmed a few percent from the total.
That's where the action was. That's where the greed was.
Posted by Muck at November 23, 2008 11:17 PMThe mortgages (fake or otherwise) were desired by the giant Wall Street banks, you are too stupid to understand and accept this, muck. They wanted the mortgages for their fraudulent "securities". They were wild for them. Their CEOs and "bankers" made the huge money. And you focus on a few percent of "flippers". Typical.
You are a person of no imagination and no ability to understand and process a mass of data. You persist in a "conclusion" despite contrary data. You cannot make arguments, either. Why do you waste your time (and resources) by "blogging"? You are a limited intelligence know-nothing ditto-head essentially. Don't you know this?
Posted by euzoius at November 24, 2008 06:09 AM....makes a nice scapegoat, but it's not accurate.......... Muck at November 23, 2008 11:17 PMThe real greed was with your financial firms who went under: Bear Sterns, Lehman Bros, Morgan Stanley, all who packaged derivatives that multiplied the risk by a factor of 30 or more. We had previous housing bubbles collapse that did not cause nearly as much havoc because it was highly leveraged by Wall Street firms, now justly defunct. Nor did the market crash in 2000 cause the same economic disaster. However, after years of RepubliConTarian idiots like Greenspan, Gramm, Leach, Reagan and the entire Republican caucus, almost all of the Depression era safe guards that were built into the system were removed and other laws that actually prevented oversight passed. On top of that, The Bush Regime's record of actively refusing to enforce regulations has exacerbated all the ills inherent in Cowboy Capitalism. Suggest you bone up . By the way, how are Best Buy and Cheesecake Factory doing during this Second Bush Recession? Posted by Mike at November 24, 2008 02:21 PM
Well, except that you've been a little misled, Mike.
The deregulation of derivatives occurred in 1999, under Clinton. The legislation was pushed by Gramm in Congress, but was completely supported by Robert Rubin, Larry Summers, Arthur Levitt (Federal Reserve, Treasury, and SEC), and the one person who cautioned them about possible problems in doing so----a woman---was snidely ridiculed by the boys above.
Legislation passed, and Clinton gladly signed.
Deregulation of derivatives in 1999 gave us BOTH the Enron fiasco AND the supbrime mortgage fiasco. It was very much a bipartisan fuck up.
I voted for Clinton twice, would do it again if I could, but the facts are the facts are the facts.
Deregulation wasn't just a Republican idea.
Until you understand and accept that concept, you're going to be politically manipulated forever.
The MONEY boys are in BOTH parties, and they work together for the benefit of their corporate benefactors.
Bottom line.
Posted by Mary at November 25, 2008 06:12 AM