Comment by adso

No, it was the willingness of Fannie-Freddie to buy those mortgages as “conforming loans.” Had they not relaxed their standards as part of the whole CRA press for “affordable housing,” the lenders who originated those bad loans would have been stuck with servicjng them. Given that it was their own money at risk, those loans would not have been made. What happened was that it was OUR money at risk, as we see, and the loans were flipped along the path to Fannie-Freddie.

Unfortunately, we have a population that was educated in post-1960s public schools so that fact will never penetrate. In brief, and in the format most easily understood by the post-1960s educated, see this.

Although the commitee vote killing Freddie reform is regrettable in hindsight, I know from personal experience that this was not the root cause of the problem.

I was offered a mortgage in 2002 for a four two and a half in Coral Springs, Florida with no proof of income required. This was nothing to do with Freddie or Fanny. I turned it down because it seemed too risky, but obviously many, many others didn’t when made similar offers. This relaxation of the mortgage approval process caused the housing bubble. Suddenly anyone could get a mortgage, prices rose and flippers entered the market place, thus inflating the market even more and causing positive feedback on house prices. People only needed to pay the mortgage for a few months before flipping the property and moving on. When this bubble burst and people could no longer flip, and their temporarily low interest rate period ended, they were forced to foreclose.

So what caused the mortgage approval process to relax in the first place? Could it be deregulation of the mortgage industry? Who was responsible for that?

More generally, I focused on the quotes, instead of the surrounding editorial comments, which, if you aren’t reading carefully, might look like quotes. I was struck by the following, among other things:

“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 (New York Times, September 11, 2003).”

What really hits me about this quote is that the Bush Administration was trying to take a power away from the Congress. Given that the Executive Branch has seized many powers with B.S. rationales (e.g., the power to wage war in Iraq) that should be with the Legislative Branch, I can see why the Legislative Branch would have been very hesitant to relinquish any of it’s powers, duties, responsibilities. So, I don’t find the fact that this power was not turned over very enlightening as to the cause of this crisis. In fact, I am glad they did not turn it over. They should have retained the power, but they should have exercised their responsibilities. Notice that this was a wholly Republican Senate and Legislature and Presidency in 2003, when these problems were noted and nothing was done.

What is interesting is that at least some people recognized that there were serious problems and nothing was done about it, irrespective of which side of the aisle was complaining about these issues. Before reading this, I had thought that we had needed a whistle-blower on the inside of the system to shed light and truth earlier on. Apparently, the problems were obvious and anticipated.

This leads me to the following reflection, stimulated by hearing Bill O’Reilly (of all people) on GMA this morning. He said that if we don’t start electing the more honest candidates, we are never going to solve any of these problems, or words to that effect. To me, this goes to the heart of the matter. If we continue to be willing to vote for people we know to be liars, we are continuing to vote for dishonest government.

For me, McCain is one of the biggest disappointments ever. He has lied so much that even Karl Rove called him out on lying. Half a dozen Republican pundits have thrown him under the bus for lying. Sarah Palin is the most corrupt politician for whom I have ever had the chance to vote, with the possible exception of Nixon.

The primary reason I opposed Hillary Clinton so vehemently was that I believed she was a liar. I agree with Bill O’Reilly for once. We have to seek to elect those with fundamental integrity. We aren’t going to find perfection, but we can do a lot better than Bush, Cheney, McCain, and Palin.

Obama may be wrong sometimes. And, I do believe he is too close to the banking executives and that is something that has come to my attention of late. He’s not as progressive in many ways as he should be — and I’m not talking about socialistic. However, I have yet to learn that he outright lied to me. As a politician, I believe his level of personal integrity is one of his glowing strong points. If you can prove to me that he is a liar, I’ll stay home or vote for Ron Paul, who at least isn’t lying to me every morning, as McCain and Palin surely are.

RC – The headline was self-explanatory and did indeed only refer to one specific matter. You simply souldn’t resist your urge to spam this thread with your comments #37 and #42. Anyone who took the time to read them is more stupid for having done so.

Many thanks.

That, truly is inexplicable!

Well, faced with the inexplicable, confronted by paradox, I had to reexamine my assumptions about the Republicans, and about our government. I conclude, after a great deal of agonizing over this, that either they, themselves, are ideologues (some sort of Marxists) for whom the destruction of America is a stage on the road to building their utopia (call it what you will), or more probably, other groups weild the real money, and thus the real power, in the world, and these figures we see are just loathsome mediocrities in it for the payoff. When I said “masters”, above, I was revealing that I don’t believe McCain is an ideologue…
The interests who ran us uncountable trillions of dollars into debt, and all of their allies in government, will retire wealthy. I did not try to identify them, but “masters” is as good a name as any.

If John McCain has a master, it’s news to a lot of people. I’ve pulled my hair out a few times at his choices (immigration, campaign finance, torture) but I’ve yet to see his “master.” You are starting to sound like DNC talking points, or, horrors, a Paulista.

Tell me, did the WTC collapse look like an inside job ? Come on, you can tell me.