Financial Crisis Due To Democrat Ideas

[Mad Scientist]

TM is like that idiot at a College Basketball game that is always screaming "We're No.1!" when in fact the team isn't even ranked Nationally.

 

[Bfgrn]

Total bullshit as usual PC.

There’s a dangerous — and misleading — argument making the rounds about the causes of our current credit crisis. It’s emanating from Washington where politicians are engaging in the usual blame game but this time the stakes are so high that we can’t afford to fall victim to political doublespeak. In this fact-free zone, government sponsored mortgage giants Fannie Mae and Freddie Mac caused the real estate bubble and subprime meltdown. It’s completely false. Fannie Mae and Freddie Mac were victims of the credit crisis, not culprits.

Start with the most basic fact of all: virtually none of the $1.5 trillion of cratering subprime mortgages were backed by Fannie or Freddie. That’s right — most subprime mortgages did not meet Fannie or Freddie’s strict lending standards. All those no money down, no interest for a year, low teaser rate loans? All the loans made without checking a borrower’s income or employment history? All made in the private sector, without any support from Fannie and Freddie.

Look at the numbers. While the credit bubble was peaking from 2003 to 2006, the amount of loans originated by Fannie and Freddie dropped from $2.7 trillion to $1 trillion. Meanwhile, in the private sector, the amount of subprime loans originated jumped to $600 billion from $335 billion and Alt-A loans hit $400 billion from $85 billion in 2003. Fannie and Freddie, which wouldn’t accept crazy floating rate loans, which required income verification and minimum down payments, were left out of the insanity.

There’s a must-read study by staff members of the Federal Reserve Bank of New York analyzing the roots of the subprime crisis that came out in March. I don’t think it got much attention then as the conclusions seemed uncontroversial at the time. But now that Washington politicians are trying to rewrite history, it should be mandatory reading for every American interested in knowing how we got here.

The study identifies five causes of the subprime meltdown:
-Convoluted loan products that consumers didn’t understand.
-Credit ratings that didn’t do a good job highlighting the risks contained in subprime-backed securities.
-Lack of incentives for institutional investors to do their own research (they just relied on the credit ratings).
-Predatory lending and borrowing (which I think means fraud perpetrated by borrowers).
-Significant errors in the models used by credit rating agencies to assess subprime-backed securities.

You’ll note in the Fed’s five causes that there’s some culpability for lenders, borrowers, investors and credit raters. There’s no blame for Freddie Mac or Fannie Mae which had little or nothing to do with the entire situation.

It’s certainly fair to criticize Fannie and Freddie over real issues that contributed to their downfall. The companies had numerous accounting problems and inadequate safeguards covering their own investment portfolios. Those weaknesses came home to roost when the real estate market cratered. Fannie and Freddie purchased billions of dollars of subprime-backed securities for their own investment portfolios and got hit just like every other investor. But it’s some kind of crazy, politically inspired CYA to blame for the mess we’re in.

Businessweek

 

[PoliticalChic]

Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.

1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute in Washington, D.C.. Allison held a number of leadership positions in BB&T Corp. from 1987 until 2010 when he retired.' http://en.wikipedia.org/wiki/John_A._Allison_IV], on book TV, yesterday.

2. He clearly laid the blame for the financial crisis where it belongs. The cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies.





3. "It is a myth that the financial crisis was caused by deregulation of the banking industry, nor was it deregulated under Bush. In fact, there was a massive increase in regulation during the Bush administration: the Patriot Act, the Privacy Act, Sarbane-Oxley.

a. Nor did some new variety of greed make an unexpected appearance.


4. The primary cause of the financial crisis was government policy. Let’s keep in mind, we do not live in a free-market economy….we live in a mixed economy, and the degree of regulation depends on the industry in question. The lest regulated is technology. The most regulated is the financial services industry.

a. Government policy caused massive mis-investment, called a ‘bubble.’

b. And, while Wall Street made serious mistakes…these mistakes were incentivized by government policy.

5. Three government precincts on whom to focus blame are the Federal Reserve, the FDIC, and government housing policy. In 1913, the monetary system was nationalized, in theory, to reduce volatility. Since then, there has been no private system. Thus, any monetary problems are government problems, in exactly the same way that falling bridges or roads would be government problems. Government owns ‘em, as it owns the monetary system.

6. Government Housing Policy, based on the progressive belief that human nature can be changed and utopia reached as long as government has the right set of regulations and policies. In this case, the policy was geared toward increasing home ownership beyond the natural market rate in order to make the new owner a better citizen, with better values. Of course, the belief was false, as the truth is just the opposite: it is the higher values and self-discipline that allow one to save for a house. Incorrect belief, ‘error cascade:” bad public policy.





7. A major event in the cause of the financial crisis occurred in September of 1999: President Clinton required that at least half of the loans advanced by Fannie and Fredddie be in ‘affordable housing,’ i.e., sub prime . The leverage in these two entities was 1000: 1, meaning $1,000 of debt to every $1 of equity.
Even the NYTimes wrote that economists predicted that this would be a disaster, possibly enough to bring down the whole US economy within a decade. Sure enough….9 years later….So, the primary cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies."
John Allison, on Book TV, 1-27-2013


a. “The problem arose because Fanny Mae and Freddie Mac were the key institutions in providing mortgage default insurance and in buying subprime mortgages. There were abuses of the derivative instruments that should have been punished by the market but were not because the perpetrators were ultimately bailed out.

b. It was in the late 1990's, as shown below, under the urging of the Clinton Administration that Fannie Mae and Freddie Mac began to operate as social welfare agencies instead of financial institutions. The insurance premiums on subprime mortgages were too low for the risks involved.

c. “An article by Steven A. Holmes from the September 30, 1999 edition of the New York Times describes how the process began that culminated in the financial crisis of September 2008. The article reveals how much wishful thinking there was on the part of government officials that financial institutions could be run like social welfare agencies and how they were forewarned of their folly yet they went ahead and did it.” The Nature and the Origin of the Subprime Mortgage Crisis






And so, had FDR not created Fannie and Freddie, had he been restrained by the Constitution, had Clinton, Cisneros, Cuomo not imposed risk on the GSE's, had Dodd and Frank not impeded reform of same.....

....Progressive Democrat ideology would not have resulted in the financial crisis.

Sadly, the truth will mean nothing to the 'reliable Democrat voter.'

First your link to wiki is broken. A link to the actual talk might be more appropriate anyway. Economics - "The Financial Crisis and the Free Market Cure: Why Pure Capitalism is the World Economy's Only Hope" - Book TV

The fact that you disagree with the CEO and President of the Cato Institute is surprising, unless of course he said something you did not want to hear.

"The fact that you disagree with the CEO and President of the Cato Institute ...."

Perhaps you'd best reread the OP.

 

[PoliticalChic]

the Bush SEC never implimented gram leach bliely so how can you say it was clintons fault?


As adopted, Regulation R provides banks with a transitional exemption until the first day of their first fiscal year commencing after Sept. 30, 2008. This will give banks time to make any necessary changes in their systems and compliance programs and should ensure that banks have time to come into compliance with the Exchange Act provisions relating to the broker definition. This exemptive rule will become effective on the date that the Commission's current order expires, Sept. 28, 2007.

"In May of 2006 the Office of Federal Housing Enterprise Oversight (OFHEO) issued the report on its three year investigation of the Federal National Mortgage Association (Fannie Mae). The acting director of OFHEO, James B. Lockhart, said

Our examination found an environment where the ends justified the means. Senior management manipulated accounting, reaped maximum, undeserved bonuses, and prevented the rest of the world from knowing.

The reported charged that the reported earnings from 1998 to mid-2004 were bogus values generated by erroneous accounting practices. These fraudulent earnings then were used to justify enormous bonuses for the senior management. The extent of the fraudulent accounting profits was a mind-boggling $11 billion. The sizes of the undeserved bonuses were not just millions of dollars, or even tens of millions of dollars. Instead they were hundreds of millions of dollars."
The Nature and the Origin of the Subprime Mortgage Crisis

James B. Lockhart III - Wikipedia, the free encyclopedia



Early life

Mr. Lockhart was born in White Plains, NY in 1946. He grew up in Riegel Ridge and Summit, NJ. He became an Eagle Scout at the early age of 13. He attended Phillips Academy in Andover, MA for four years where he became a good friend of George W. Bush. During his senior year he moved to St. Paul, MN as his father moved to become CEO of Conwed from being the CFO of Riegel Paper Corporation

I note that you regularly challenge the individual, rather than the fact.

That is sophomoric.

 

[emptystep]

"The fact that you disagree with the CEO and President of the Cato Institute ...."

Perhaps you'd best reread the OP.

Dang! That is two wrong I got on you. Although I still am checking to see where you said that. What ever can I do to make it up to you?

Of course now that I see what you are saying you are back to having scrambled eggs for a brain.

 

[Friends]

Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.

1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute in Washington, D.C.. Allison held a number of leadership positions in BB&T Corp. from 1987 until 2010 when he retired.' http://en.wikipedia.org/wiki/John_A._Allison_IV], on book TV, yesterday.

2. He clearly laid the blame for the financial crisis where it belongs. The cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies.





3. "It is a myth that the financial crisis was caused by deregulation of the banking industry, nor was it deregulated under Bush. In fact, there was a massive increase in regulation during the Bush administration: the Patriot Act, the Privacy Act, Sarbane-Oxley.

a. Nor did some new variety of greed make an unexpected appearance.


4. The primary cause of the financial crisis was government policy. Let’s keep in mind, we do not live in a free-market economy….we live in a mixed economy, and the degree of regulation depends on the industry in question. The lest regulated is technology. The most regulated is the financial services industry.

a. Government policy caused massive mis-investment, called a ‘bubble.’

b. And, while Wall Street made serious mistakes…these mistakes were incentivized by government policy.

5. Three government precincts on whom to focus blame are the Federal Reserve, the FDIC, and government housing policy. In 1913, the monetary system was nationalized, in theory, to reduce volatility. Since then, there has been no private system. Thus, any monetary problems are government problems, in exactly the same way that falling bridges or roads would be government problems. Government owns ‘em, as it owns the monetary system.

6. Government Housing Policy, based on the progressive belief that human nature can be changed and utopia reached as long as government has the right set of regulations and policies. In this case, the policy was geared toward increasing home ownership beyond the natural market rate in order to make the new owner a better citizen, with better values. Of course, the belief was false, as the truth is just the opposite: it is the higher values and self-discipline that allow one to save for a house. Incorrect belief, ‘error cascade:” bad public policy.





7. A major event in the cause of the financial crisis occurred in September of 1999: President Clinton required that at least half of the loans advanced by Fannie and Fredddie be in ‘affordable housing,’ i.e., sub prime . The leverage in these two entities was 1000: 1, meaning $1,000 of debt to every $1 of equity.
Even the NYTimes wrote that economists predicted that this would be a disaster, possibly enough to bring down the whole US economy within a decade. Sure enough….9 years later….So, the primary cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies."
John Allison, on Book TV, 1-27-2013


a. “The problem arose because Fanny Mae and Freddie Mac were the key institutions in providing mortgage default insurance and in buying subprime mortgages. There were abuses of the derivative instruments that should have been punished by the market but were not because the perpetrators were ultimately bailed out.

b. It was in the late 1990's, as shown below, under the urging of the Clinton Administration that Fannie Mae and Freddie Mac began to operate as social welfare agencies instead of financial institutions. The insurance premiums on subprime mortgages were too low for the risks involved.

c. “An article by Steven A. Holmes from the September 30, 1999 edition of the New York Times describes how the process began that culminated in the financial crisis of September 2008. The article reveals how much wishful thinking there was on the part of government officials that financial institutions could be run like social welfare agencies and how they were forewarned of their folly yet they went ahead and did it.” The Nature and the Origin of the Subprime Mortgage Crisis




And so, had FDR not created Fannie and Freddie, had he been restrained by the Constitution, had Clinton, Cisneros, Cuomo not imposed risk on the GSE's, had Dodd and Frank not impeded reform of same.....

....Progressive Democrat ideology would not have resulted in the financial crisis.

Sadly, the truth will mean nothing to the 'reliable Democrat voter.'

Anyone can find something on the internet he agrees with. Copying and pasting it on an internet forum is boring. PoliticalChic, if you understood what you copied and pasted, present it in your own words, using the internet only to document factual assertions made in your own argument.

 

[Rshermr]

Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.

1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute in Washington, D.C.. Allison held a number of leadership positions in BB&T Corp. from 1987 until 2010 when he retired.' http://en.wikipedia.org/wiki/John_A._Allison_IV], on book TV, yesterday.

2. He clearly laid the blame for the financial crisis where it belongs. The cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies.





3. "It is a myth that the financial crisis was caused by deregulation of the banking industry, nor was it deregulated under Bush. In fact, there was a massive increase in regulation during the Bush administration: the Patriot Act, the Privacy Act, Sarbane-Oxley.

a. Nor did some new variety of greed make an unexpected appearance.


4. The primary cause of the financial crisis was government policy. Let’s keep in mind, we do not live in a free-market economy….we live in a mixed economy, and the degree of regulation depends on the industry in question. The lest regulated is technology. The most regulated is the financial services industry.

a. Government policy caused massive mis-investment, called a ‘bubble.’

b. And, while Wall Street made serious mistakes…these mistakes were incentivized by government policy.

5. Three government precincts on whom to focus blame are the Federal Reserve, the FDIC, and government housing policy. In 1913, the monetary system was nationalized, in theory, to reduce volatility. Since then, there has been no private system. Thus, any monetary problems are government problems, in exactly the same way that falling bridges or roads would be government problems. Government owns ‘em, as it owns the monetary system.

6. Government Housing Policy, based on the progressive belief that human nature can be changed and utopia reached as long as government has the right set of regulations and policies. In this case, the policy was geared toward increasing home ownership beyond the natural market rate in order to make the new owner a better citizen, with better values. Of course, the belief was false, as the truth is just the opposite: it is the higher values and self-discipline that allow one to save for a house. Incorrect belief, ‘error cascade:” bad public policy.





7. A major event in the cause of the financial crisis occurred in September of 1999: President Clinton required that at least half of the loans advanced by Fannie and Fredddie be in ‘affordable housing,’ i.e., sub prime . The leverage in these two entities was 1000: 1, meaning $1,000 of debt to every $1 of equity.
Even the NYTimes wrote that economists predicted that this would be a disaster, possibly enough to bring down the whole US economy within a decade. Sure enough….9 years later….So, the primary cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies."
John Allison, on Book TV, 1-27-2013


a. “The problem arose because Fanny Mae and Freddie Mac were the key institutions in providing mortgage default insurance and in buying subprime mortgages. There were abuses of the derivative instruments that should have been punished by the market but were not because the perpetrators were ultimately bailed out.

b. It was in the late 1990's, as shown below, under the urging of the Clinton Administration that Fannie Mae and Freddie Mac began to operate as social welfare agencies instead of financial institutions. The insurance premiums on subprime mortgages were too low for the risks involved.

c. “An article by Steven A. Holmes from the September 30, 1999 edition of the New York Times describes how the process began that culminated in the financial crisis of September 2008. The article reveals how much wishful thinking there was on the part of government officials that financial institutions could be run like social welfare agencies and how they were forewarned of their folly yet they went ahead and did it.” The Nature and the Origin of the Subprime Mortgage Crisis




And so, had FDR not created Fannie and Freddie, had he been restrained by the Constitution, had Clinton, Cisneros, Cuomo not imposed risk on the GSE's, had Dodd and Frank not impeded reform of same.....

....Progressive Democrat ideology would not have resulted in the financial crisis.

Sadly, the truth will mean nothing to the 'reliable Democrat voter.'

Anyone can find something on the internet he agrees with. Copying and pasting it on an internet forum is boring. PoliticalChic, if you understood what you copied and pasted, present it in your own words, using the internet only to document factual assertions made in your own argument.

There is no possibility that PC will do that. She is incapable of actual economic argument, but good at copy and paste

 

[emptystep]

Friends, awesome avatar.

 

[Procrustes Stretched]

Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.

and a purely partisan attack does nothing to address truth and facts

 

[emptystep]

Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.

1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute in Washington, D.C.. Allison held a number of leadership positions in BB&T Corp. from 1987 until 2010 when he retired.' http://en.wikipedia.org/wiki/John_A._Allison_IV], on book TV, yesterday.

2. He clearly laid the blame for the financial crisis where it belongs. The cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies.





3. "It is a myth that the financial crisis was caused by deregulation of the banking industry, nor was it deregulated under Bush. In fact, there was a massive increase in regulation during the Bush administration: the Patriot Act, the Privacy Act, Sarbane-Oxley.

a. Nor did some new variety of greed make an unexpected appearance.


4. The primary cause of the financial crisis was government policy. Let’s keep in mind, we do not live in a free-market economy….we live in a mixed economy, and the degree of regulation depends on the industry in question. The lest regulated is technology. The most regulated is the financial services industry.

a. Government policy caused massive mis-investment, called a ‘bubble.’

b. And, while Wall Street made serious mistakes…these mistakes were incentivized by government policy.

5. Three government precincts on whom to focus blame are the Federal Reserve, the FDIC, and government housing policy. In 1913, the monetary system was nationalized, in theory, to reduce volatility. Since then, there has been no private system. Thus, any monetary problems are government problems, in exactly the same way that falling bridges or roads would be government problems. Government owns ‘em, as it owns the monetary system.

6. Government Housing Policy, based on the progressive belief that human nature can be changed and utopia reached as long as government has the right set of regulations and policies. In this case, the policy was geared toward increasing home ownership beyond the natural market rate in order to make the new owner a better citizen, with better values. Of course, the belief was false, as the truth is just the opposite: it is the higher values and self-discipline that allow one to save for a house. Incorrect belief, ‘error cascade:” bad public policy.





7. A major event in the cause of the financial crisis occurred in September of 1999: President Clinton required that at least half of the loans advanced by Fannie and Fredddie be in ‘affordable housing,’ i.e., sub prime . The leverage in these two entities was 1000: 1, meaning $1,000 of debt to every $1 of equity.
Even the NYTimes wrote that economists predicted that this would be a disaster, possibly enough to bring down the whole US economy within a decade. Sure enough….9 years later….So, the primary cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies."
John Allison, on Book TV, 1-27-2013


a. “The problem arose because Fanny Mae and Freddie Mac were the key institutions in providing mortgage default insurance and in buying subprime mortgages. There were abuses of the derivative instruments that should have been punished by the market but were not because the perpetrators were ultimately bailed out.

b. It was in the late 1990's, as shown below, under the urging of the Clinton Administration that Fannie Mae and Freddie Mac began to operate as social welfare agencies instead of financial institutions. The insurance premiums on subprime mortgages were too low for the risks involved.

c. “An article by Steven A. Holmes from the September 30, 1999 edition of the New York Times describes how the process began that culminated in the financial crisis of September 2008. The article reveals how much wishful thinking there was on the part of government officials that financial institutions could be run like social welfare agencies and how they were forewarned of their folly yet they went ahead and did it.” The Nature and the Origin of the Subprime Mortgage Crisis




And so, had FDR not created Fannie and Freddie, had he been restrained by the Constitution, had Clinton, Cisneros, Cuomo not imposed risk on the GSE's, had Dodd and Frank not impeded reform of same.....

....Progressive Democrat ideology would not have resulted in the financial crisis.

Sadly, the truth will mean nothing to the 'reliable Democrat voter.'

Anyone can find something on the internet he agrees with. Copying and pasting it on an internet forum is boring. PoliticalChic, if you understood what you copied and pasted, present it in your own words, using the internet only to document factual assertions made in your own argument.

I agree. It does make you very hard to follow. A short synopsis at the start would be nice.

 

[PoliticalChic]

Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.

1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute in Washington, D.C.. Allison held a number of leadership positions in BB&T Corp. from 1987 until 2010 when he retired.' http://en.wikipedia.org/wiki/John_A._Allison_IV], on book TV, yesterday.

2. He clearly laid the blame for the financial crisis where it belongs. The cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies.





3. "It is a myth that the financial crisis was caused by deregulation of the banking industry, nor was it deregulated under Bush. In fact, there was a massive increase in regulation during the Bush administration: the Patriot Act, the Privacy Act, Sarbane-Oxley.

a. Nor did some new variety of greed make an unexpected appearance.


4. The primary cause of the financial crisis was government policy. Let’s keep in mind, we do not live in a free-market economy….we live in a mixed economy, and the degree of regulation depends on the industry in question. The lest regulated is technology. The most regulated is the financial services industry.

a. Government policy caused massive mis-investment, called a ‘bubble.’

b. And, while Wall Street made serious mistakes…these mistakes were incentivized by government policy.

5. Three government precincts on whom to focus blame are the Federal Reserve, the FDIC, and government housing policy. In 1913, the monetary system was nationalized, in theory, to reduce volatility. Since then, there has been no private system. Thus, any monetary problems are government problems, in exactly the same way that falling bridges or roads would be government problems. Government owns ‘em, as it owns the monetary system.

6. Government Housing Policy, based on the progressive belief that human nature can be changed and utopia reached as long as government has the right set of regulations and policies. In this case, the policy was geared toward increasing home ownership beyond the natural market rate in order to make the new owner a better citizen, with better values. Of course, the belief was false, as the truth is just the opposite: it is the higher values and self-discipline that allow one to save for a house. Incorrect belief, ‘error cascade:” bad public policy.





7. A major event in the cause of the financial crisis occurred in September of 1999: President Clinton required that at least half of the loans advanced by Fannie and Fredddie be in ‘affordable housing,’ i.e., sub prime . The leverage in these two entities was 1000: 1, meaning $1,000 of debt to every $1 of equity.
Even the NYTimes wrote that economists predicted that this would be a disaster, possibly enough to bring down the whole US economy within a decade. Sure enough….9 years later….So, the primary cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies."
John Allison, on Book TV, 1-27-2013


a. “The problem arose because Fanny Mae and Freddie Mac were the key institutions in providing mortgage default insurance and in buying subprime mortgages. There were abuses of the derivative instruments that should have been punished by the market but were not because the perpetrators were ultimately bailed out.

b. It was in the late 1990's, as shown below, under the urging of the Clinton Administration that Fannie Mae and Freddie Mac began to operate as social welfare agencies instead of financial institutions. The insurance premiums on subprime mortgages were too low for the risks involved.

c. “An article by Steven A. Holmes from the September 30, 1999 edition of the New York Times describes how the process began that culminated in the financial crisis of September 2008. The article reveals how much wishful thinking there was on the part of government officials that financial institutions could be run like social welfare agencies and how they were forewarned of their folly yet they went ahead and did it.” The Nature and the Origin of the Subprime Mortgage Crisis




And so, had FDR not created Fannie and Freddie, had he been restrained by the Constitution, had Clinton, Cisneros, Cuomo not imposed risk on the GSE's, had Dodd and Frank not impeded reform of same.....

....Progressive Democrat ideology would not have resulted in the financial crisis.

Sadly, the truth will mean nothing to the 'reliable Democrat voter.'

Anyone can find something on the internet he agrees with. Copying and pasting it on an internet forum is boring. PoliticalChic, if you understood what you copied and pasted, present it in your own words, using the internet only to document factual assertions made in your own argument.

They are my own words.

I own every single one of 'em.


Could you point out the words in your post that you created?

 

[PoliticalChic]

Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.

1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute in Washington, D.C.. Allison held a number of leadership positions in BB&T Corp. from 1987 until 2010 when he retired.' http://en.wikipedia.org/wiki/John_A._Allison_IV], on book TV, yesterday.

2. He clearly laid the blame for the financial crisis where it belongs. The cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies.





3. "It is a myth that the financial crisis was caused by deregulation of the banking industry, nor was it deregulated under Bush. In fact, there was a massive increase in regulation during the Bush administration: the Patriot Act, the Privacy Act, Sarbane-Oxley.

a. Nor did some new variety of greed make an unexpected appearance.


4. The primary cause of the financial crisis was government policy. Let’s keep in mind, we do not live in a free-market economy….we live in a mixed economy, and the degree of regulation depends on the industry in question. The lest regulated is technology. The most regulated is the financial services industry.

a. Government policy caused massive mis-investment, called a ‘bubble.’

b. And, while Wall Street made serious mistakes…these mistakes were incentivized by government policy.

5. Three government precincts on whom to focus blame are the Federal Reserve, the FDIC, and government housing policy. In 1913, the monetary system was nationalized, in theory, to reduce volatility. Since then, there has been no private system. Thus, any monetary problems are government problems, in exactly the same way that falling bridges or roads would be government problems. Government owns ‘em, as it owns the monetary system.

6. Government Housing Policy, based on the progressive belief that human nature can be changed and utopia reached as long as government has the right set of regulations and policies. In this case, the policy was geared toward increasing home ownership beyond the natural market rate in order to make the new owner a better citizen, with better values. Of course, the belief was false, as the truth is just the opposite: it is the higher values and self-discipline that allow one to save for a house. Incorrect belief, ‘error cascade:” bad public policy.





7. A major event in the cause of the financial crisis occurred in September of 1999: President Clinton required that at least half of the loans advanced by Fannie and Fredddie be in ‘affordable housing,’ i.e., sub prime . The leverage in these two entities was 1000: 1, meaning $1,000 of debt to every $1 of equity.
Even the NYTimes wrote that economists predicted that this would be a disaster, possibly enough to bring down the whole US economy within a decade. Sure enough….9 years later….So, the primary cause of the financial crisis was the philosophical ideas, the ideology, of the Democrats. They reversed the American concept of rights, that one earns his way, and keeps his property, to ‘someone else should provide what you want.’ Lack of personal responsibility signals the end of democracies."
John Allison, on Book TV, 1-27-2013


a. “The problem arose because Fanny Mae and Freddie Mac were the key institutions in providing mortgage default insurance and in buying subprime mortgages. There were abuses of the derivative instruments that should have been punished by the market but were not because the perpetrators were ultimately bailed out.

b. It was in the late 1990's, as shown below, under the urging of the Clinton Administration that Fannie Mae and Freddie Mac began to operate as social welfare agencies instead of financial institutions. The insurance premiums on subprime mortgages were too low for the risks involved.

c. “An article by Steven A. Holmes from the September 30, 1999 edition of the New York Times describes how the process began that culminated in the financial crisis of September 2008. The article reveals how much wishful thinking there was on the part of government officials that financial institutions could be run like social welfare agencies and how they were forewarned of their folly yet they went ahead and did it.” The Nature and the Origin of the Subprime Mortgage Crisis




And so, had FDR not created Fannie and Freddie, had he been restrained by the Constitution, had Clinton, Cisneros, Cuomo not imposed risk on the GSE's, had Dodd and Frank not impeded reform of same.....

....Progressive Democrat ideology would not have resulted in the financial crisis.

Sadly, the truth will mean nothing to the 'reliable Democrat voter.'

Anyone can find something on the internet he agrees with. Copying and pasting it on an internet forum is boring. PoliticalChic, if you understood what you copied and pasted, present it in your own words, using the internet only to document factual assertions made in your own argument.

I agree. It does make you very hard to follow. A short synopsis at the start would be nice.

OK....I admit it: the OP is not constructed for folks with A.D.D.

 

[Procrustes Stretched]

Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.

1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute...


4. The primary cause of the financial crisis was government policy. Let’s keep in mind, we do not live in a free-market economy….we live in a mixed economy, and the degree of regulation depends on the industry in question. The lest regulated is technology. The most regulated is the financial services industry.

a. Government policy caused massive mis-investment, called a ‘bubble.’

b. And, while Wall Street made serious mistakes…these mistakes were incentivized by government policy.

The Government made us do it defense?

 

[PoliticalChic]

Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.

1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute...


4. The primary cause of the financial crisis was government policy. Let’s keep in mind, we do not live in a free-market economy….we live in a mixed economy, and the degree of regulation depends on the industry in question. The lest regulated is technology. The most regulated is the financial services industry.

a. Government policy caused massive mis-investment, called a ‘bubble.’

b. And, while Wall Street made serious mistakes…these mistakes were incentivized by government policy.

The Government made us do it defense?

I accept your adoration, humbly.

Your reward is the following fact:

Had the Imperial President Franklin the First checked the Constitution, he would have noticed that Article I, section 8 doesn't allow federal dabbling in the housing market.....


....no Fannie nor Freddie....no mortgage meltdown.

 

[Procrustes Stretched]

Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.

1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute..

6. Government Housing Policy, based on the progressive belief that human nature can be changed and utopia reached as long as government has the right set of regulations and policies. In this case, the policy was geared toward increasing home ownership beyond the natural market rate in order to make the new owner a better citizen, with better values. Of course, the belief was false, as the truth is just the opposite: it is the higher values and self-discipline that allow one to save for a house. Incorrect belief, ‘error cascade:” bad public policy.

Number 6, especially the bold part, is the most ideologically dishonest bullshit to come down the pike in a while.

Everyone including Jon Stewart have used Barney's words out of context, against him:

"So those of us on our committee in particular will continue to push toward home ownership."

Barney has always said: "But not for low income people. Home ownership for people that could afford it." - which to honest and reasonable people is a no-brainer.

Even the left and the comedians and talk show hosts have no interest in parsing things for truth. It doesn't make for controversy and ratings

In 2009 Frank responded to what he called "wholly inaccurate efforts by Republicans to blame Democrats, and [me] in particular" for the subprime mortgage crisis, which is linked to the financial crisis of 2007–2009.[53]

He outlined his efforts to reform these institutions and add regulations, but met resistance from Republicans, with the main exception being a bill with Republican Mike Oxley that died because of opposition from President Bush.[53] The 2005 bill included Frank objectives, which were to impose tighter regulation of Fannie and Freddie and new funds for rental housing.

Frank and Mike Oxley achieved broad bipartisan support for the bill in the Financial Services Committee, and it passed the House. But the Senate never voted on the measure, in part because President Bush was likely to veto it.

"If it had passed, that would have been one of the ways we could have reined in the bowling ball going downhill called housing," Oxley told Frank. In an op-ed piece in the Wall Street Journal, Lawrence B. Lindsey, a former economic adviser to President George W. Bush, wrote that Frank "is the only politician I know who has argued that we needed tighter rules that intentionally produce fewer homeowners and more renters."[7]

Once control shifted to the Democrats, Frank was able to help guide both the Federal Housing Reform Act (H.R. 1427) and the Mortgage Reform and Anti-Predatory Lending Act (H.R. 3915) to passage in 2007.[53]

Frank also said that the Republican-led Gramm–Leach–Bliley Act of 1999, which repealed part of the Glass–Steagall Act of 1933 and removed the wall between commercial and investment banks, contributed to the financial meltdown.[53] Frank stated further that "during twelve years of Republican rule no reform was adopted regarding Fannie Mae and Freddie Mac.I n 2007, a few months after I became the Chairman, the House passed a strong reform bill; we sought to get the [Bush] administration's approval to include it in the economic stimulus legislation in January 2008; and finally got it passed and onto President Bush's desk in July 2008. Moreover, "we were able to adopt it in nineteen months, and we could have done it much quicker if the [Bush] administration had cooperated."[54]

Subprime Mortgage crisis
Congressmen Ellison & Frank at Financial Services Field Hearing on Home Foreclosures in Minneapolis.

As former chairman of the House Financial Services Committee, beginning in 2007, Frank was "at the center of power".[17] Frank has been a critic of aspects of the Federal Reserve system, partnering with some Republicans in opposition to some policies.[55] Frank says that he and Republican Congressman Ron Paul "first bonded because we were both conspicuous nonworshipers at the Temple of the Fed and of the High Priest Alan Greenspan."[55]

Frank has been involved in mortgage foreclosure bailout issues.[56] In 2008 Frank supported passage of the American Housing Rescue & Foreclosure Prevention Act, intended to protect thousands of homeowners from foreclosure.[17] This law, H.R. 3221, is considered one of the most important and complex issues on which he worked.[17][57] In an August 2007 op-ed piece in Financial Times, Frank wrote, "In the debate between those who believe in essentially unregulated markets and others who hold that reasonable regulation diminishes market excesses without inhibiting their basic function, the subprime situation unfortunately provides ammunition for the latter view."[58] Frank was also instrumental in the passage of H.R. 5244, the Credit Cardholders' Bill of Rights Act of 2008, a measure that drew praise from editorial boards and consumer advocates.[59][60][61] In 2007. Frank co-sponsored legislation to reform the Section 202 refinancing program, which is for affordable housing for the elderly, and Section 811 disabled programs.[62] Frank has been a chief advocate of the National Housing Trust Fund,[7] which was created as part of the Housing and Economic Recovery Act of 2008 and was the first affordable housing program to be enacted by the Congress since 1990.[63]

Barney Frank - Wikipedia, the free encyclopedia

 

[Oddball]

Anyone can find something on the internet he agrees with. Copying and pasting it on an internet forum is boring. PoliticalChic, if you understood what you copied and pasted, present it in your own words, using the internet only to document factual assertions made in your own argument.

At least she bothers herself to post relevant passages form the pieces she quotes, rather than just posting a link to common partisan hack websites as her OP, as do so many of the forum's socialist moonbat hacks.

 

[Procrustes Stretched]

If it isn't the Oddball Dude without the suit or armor? Oh how the mighty have fallen...or do you have a separate mod name?




get serious, and post something of substance and maybe, just maybe you'll get a chance to show off..in a challenge to the Bull Ring?

 

[EdwardBaiamonte]

Sadly, the truth will mean nothing to the 'reliable Democrat voter.'

Yes, Marx taught them that business is the enemy and they parrot it so reliably even to this day having no idea why!!

They can actually say with a straight face that Fed Fran Fred CRA FHA HUD had nothing to do with it even though their stated mission was to get people into homes the Republican free market said they could not afford.

The depth of ignorance is a true miracle.

 

[Procrustes Stretched]

Can't count the number of posts claiming that the Republicans were responsible, Bush did it, it wasn't the subprime or Fannie and Freddie.
They were wrong.

1. So, it was more than informative to hear a lecture by John Allison, ['John A. Allison ...is an American businessman and is currently the CEO and President of the Cato Institute...


4. The primary cause of the financial crisis was government policy. Let’s keep in mind, we do not live in a free-market economy….we live in a mixed economy, and the degree of regulation depends on the industry in question. The lest regulated is technology. The most regulated is the financial services industry.

a. Government policy caused massive mis-investment, called a ‘bubble.’

b. And, while Wall Street made serious mistakes…these mistakes were incentivized by government policy.

The Government made us do it defense?

I accept your adoration, humbly.

Your reward is the following fact:

Had the Imperial President Franklin the First checked the Constitution, he would have noticed that Article I, section 8 doesn't allow federal dabbling in the housing market.....


....no Fannie nor Freddie....no mortgage meltdown.

President Nixon and his Section 8 program housing subsidies Section 8 is a Conservative GOP Program Section 8 Housing Subsidies are a Conservative GOP Program President Nixon and his Section 8 program housing subsidies​

Sick of the right wing bullshit about subsidies, socialism, social programs all blamed on Democrats and liberals?

In 1974, under President Nixon, the Section 8 program was created with two distinct parts. The first involved a major housing-allowance type program, which provided households with the difference between what they could afford, based on their paying 25 percent of household income (changed to 30 percent in 1981), and the Fair Market Rent for an apartment in their area. The second component of Section 8 continued the project-based subsidy approach and improved upon these earlier programs by fostering good design and a financing mechanism that allowed for adequate operating subsidies. Most of these contracts with developers were for twenty-year terms.

From 1974 to 1983 (when it was phased out), the project-based development part of Section 8 – the New Construction and Substantial Rehabilitation programs – produced about 1 million units of housing; the certificate/voucher part of Section 8 currently is providing rental assistance to about 1.5 million households. Despite the enactment of the Section 8 production programs, by the early 1970s the old style of housing assistance, which involved providing large federal subsidies to write-down the capital costs of producing housing, were quickly becoming a thing of the past. A Withering Commitment (Section 8, history of federal housing policy)

 

[PoliticalChic]

The Government made us do it defense?

I accept your adoration, humbly.

Your reward is the following fact:

Had the Imperial President Franklin the First checked the Constitution, he would have noticed that Article I, section 8 doesn't allow federal dabbling in the housing market.....


....no Fannie nor Freddie....no mortgage meltdown.

President Nixon and his Section 8 program housing subsidies Section 8 is a Conservative GOP Program Section 8 Housing Subsidies are a Conservative GOP Program President Nixon and his Section 8 program housing subsidies​

Sick of the right wing bullshit about subsidies, socialism, social programs all blamed on Democrats and liberals?

In 1974, under President Nixon, the Section 8 program was created with two distinct parts. The first involved a major housing-allowance type program, which provided households with the difference between what they could afford, based on their paying 25 percent of household income (changed to 30 percent in 1981), and the Fair Market Rent for an apartment in their area. The second component of Section 8 continued the project-based subsidy approach and improved upon these earlier programs by fostering good design and a financing mechanism that allowed for adequate operating subsidies. Most of these contracts with developers were for twenty-year terms.

From 1974 to 1983 (when it was phased out), the project-based development part of Section 8 – the New Construction and Substantial Rehabilitation programs – produced about 1 million units of housing; the certificate/voucher part of Section 8 currently is providing rental assistance to about 1.5 million households. Despite the enactment of the Section 8 production programs, by the early 1970s the old style of housing assistance, which involved providing large federal subsidies to write-down the capital costs of producing housing, were quickly becoming a thing of the past. A Withering Commitment (Section 8, history of federal housing policy)

The GSE's were 1938.