Patterico's Pontifications


Greed, Stupidity, Delusion, Fannie and Freddie

[Posted by Karl]

John Steele Gordon — an author who has chronicled the booms and busts of US economic history — guest-posts at the NYT’s Freaknomics blog that the current mess on Wall Street is due in part to self-delusion by traders and bankers, as well as failures by credit ratings agencies such as Moody’s and Standard and Poor’s (who were part of a government-created oligopoly until 2007) to learn from their mistakes in cases like Enron:

But at the heart of the problem is Congress and its deeply corrupt relationship with Fannie Mae and Freddie Mac. Congress was equally at the heart of the savings and loan disaster 20 years ago and, obviously, learned nothing from it.

RTWT.  Gordon also credits The Wall Street Journal editorial page for warning for years that this was a disaster waiting to happen.  Now that public attention is riveted on the issue, the WSJ has another op-ed today by Charles W. Calomiris and Peter J. Wallison, explaining how these two government-sponsored enterprises (GSEs) and their political patrons bear a major potion of the blame:

How did we get here? Let’s review: In order to curry congressional support after their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of “affordable housing.” They became the largest buyers of subprime and Alt-A mortgages [a/k/a “liar loans” -K] between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. In doing so, they stimulated the growth of the subpar mortgage market and substantially magnified the costs of its collapse.

It is important to understand that, as GSEs, Fannie and Freddie were viewed in the capital markets as government-backed buyers (a belief that has now been reduced to fact). Thus they were able to borrow as much as they wanted for the purpose of buying mortgages and mortgage-backed securities. Their buying patterns and interests were followed closely in the markets. If Fannie and Freddie wanted subprime or Alt-A loans, the mortgage markets would produce them.

Calomiris and Wallison also notes (as previously noted here) that Senate Republicans, including John McCain, supported a strong reform bill for the GSEs, while Democrats opposed it or — like Barack Obama — remained silent.

Yesterday on the campaign trail, Obama claimed that McCain was a champion of the deregulation that led to the current turmoil in US markets.  As McCain was the champion of reform on this issue and the deregulation he supported is one of the few saving graces of the current crisis, Obama’s claim seems remarkably dishonest.  Yet Obama’s in-the-tank media pals like the Politico’s Ben Smith and the oh-so-probing New York Times have not bothered to remark upon it.


L.A. Times Puff Piece on a VP Candidate

Filed under: 2008 Election,Dog Trainer — Patterico @ 12:51 am

See if you can guess which one.

Hint: if you guessed wrong, you have the IQ of par golf.

At a par-three course.

A nine-hole par three course.

Alleged Palin E-Mail Hacker Either Really Guilty Or Totally Framed

Filed under: 2008 Election — Patterico @ 12:37 am

I’m not one to jump to conclusions about guilt.

But either David Kernell is guilty, or he has been framed by experts.

Ethan Winner Speaks Out, Answering The Tough Questions, If By “The Tough Questions” You Mean “Pretty Much Nothing Anyone Is Interested In”

Filed under: 2008 Election,General,Scum — Patterico @ 12:18 am

As I reported last night, Rusty at the Jawa Report has accused Ethan Winner of being the guy who uploaded that anti-Palin smear video. I said this morning: “The connection to the Winners and their PR firm is solid. The evidence tying in Axelrod and Obama is circumstantial but suggestive.”

Well, we now have an admission of the former and a denial of the latter.

September 22, 2008

1:30 pm PDT

Statement of Ethan Winner

The following is in response to questions I have received regarding the post on the Jawa Report website.

I produced and posted on the Internet the video entitled “Sarah Palin: A Heartbeat Away.”

The idea for the video was mine. No one paid me to produce it. The only out-of-pocket cost will be the fee for the voice-over narrator, which I will pay personally when I receive an invoice. Contrary to the allegation in the Jawa Report, the voice-over artist has never done any work for the Obama campaign. I retained her through a talent agency based solely on the quality of her voice.

Neither the Obama campaign nor any independent political action committee has had a connection with the making and/or posting of this video. Just like the thousands of Americans who have posted videos on the Internet regarding the current Presidential campaign, I produced this video as an expression of my right to free speech, which is guaranteed by the U.S. Constitution.

I believe the American people have a right and a need to know information about candidates for political office and their views. I made this video because I think it is important for the public to be aware of the association between Sarah and Todd Palin and the Alaskan Independence Party. The New York Times has reported that the Alaskan Independence Party website describes the party as seeking, in the words of the party, “a range of solutions to the conflicts between federal and local authority,” including “advocacy for state’s rights, through a return to territorial status, all the way to complete independence and nationhood status for Alaska.”

While a number of media outlets have said that reports that Sarah Palin was a member of the Alaskan Independence Party may have been erroneous, her attendance at the party’s 1994 convention, her video speech to the 2008 convention and her husband’s membership in the Alaskan Independence Party have not been called into question.

Some people have asked why I have pulled the video from the Internet. The reason is simple. Following the posting of personal information about me by the Jawa Report, my family began to receive threatening and abusive phone calls and emails.

In jury trials, juries often assess the credibility of one assertion by testing the credibility of other assertions by the same witness. For example, if Ethan Winner tells you that “the voice-over artist has never done any work for the Obama campaign,” you are entitled to listen to a comparison of his voice-over artist to that used by the Obama campaign to see if his assertion rings true.

Winner says the two voices in that clip belong to different people. Make your own determination on that point. He doesn’t name the artist, and claims that “the voice-over artist has never done any work for the Obama campaign.” How does he know?

He doesn’t answer Ace’s question of why the videos and profiles came down so quickly, when the only thing teased in advance was that there would be a post tying phony grassroots activity to David Axelrod. Are we to presume that there was no such tie, yet Winner and family were simply monitoring Ace of Spades and Jawa Report and Patterico, so that they were ready to pull everything down within an hour of our posts going up??

He says that the idea for the video was his — but he pointedly doesn’t deny that one of the people working for his PR firm was involved in promoting it. And he doesn’t explain why that person refused to answer a simple question from the Weekly Standard regarding whether he had posted the video to Democratic Underground. If there was nothing nefarious going on, why did Jared Liu-Klein tell the Weekly Standard that he’d have to get back to them on that very simple question??

And he sidesteps the issue of the video’s blatantly false claims. Remember what Rusty told us in his original post:

The New York Times was forced to retract their earlier claim that Palin was a member of the party, blaming the error on the party’s chair. That retraction was published Sept. 3rd, 8 days before the video was first made publicly available.

And he doesn’t explain why Daily Kos suddenly killed their post promoting the smear — just like they killed their post promoting the “Trig Trutherism” smear.

Something tells me that Ethan Winner has a lot of ‘splainin’ to do.

As Treacher says: “Winners Fake All.”

P.S. I will say this: all arguments that this video was an “in kind” contribution to Obama are bordering on fascism. This guy has a First Amendment right to say whatever he wants — and I think he retains that right even if he is doing Barack Obama’s explicit bidding. To reach any other conclusion is to deny the First Amendment.

But we have the right to question what is going on here. And we might as well exercise that right, because the brave souls in our so-called free press couldn’t care less about keeping Obama and his crew honest.

UPDATE: What do you know? We have a direct connection between Axelrod and the Winners. Thanks to daleyrocks.

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