Presidential Debate: Round 2

[questor]

Reason, there is no need for you to misunderstand or misquote me when my posts are there to refer to:

questor, I understand that it makes you feel comfortable to believe that liberal democrats are responsible for all of the ills in the world and that there is this clear definition of right and wrong in which you have positioned yourself on the right side of any issue.

I have never said this, although I do believe certain liberal ideas are not helpful to society.

 

This quote is from the Fact Check link that you posted:

It's true that key Democrats opposed the Federal Housing Enterprise Regulatory Reform Act of 2005, which would have established a single, independent regulatory body with jurisdiction over Fannie and Freddie – a move that the Government Accountability Office had recommended in a 2004 report. Current House Banking Committee chairman Rep. Barney Frank of Massachusetts opposed legislation to reorganize oversight in 2000 (when Clinton was still president), 2003 and 2004, saying of the 2000 legislation that concern about Fannie and Freddie was "overblown." Just last summer, Senate Banking Committee chairman Chris Dodd called a Bush proposal for an independent agency to regulate the two entities "ill-advised."

This would seem to point to the underlying cause for later events.

 

This information I gave in post #32 was taken from the Washington Post today. ''Fannie, Freddie Become Hot Topic in Campaign''. I would not call the Post a conservative paper.

This quote:

If you are at all interested in gaining an objective understanding of the highly complex financial crises that we are currently experiencing, please read and view the links below. Otherwise, you're welcome to continue deluding yourself that it is all because of the Dems and lazy poor people.

This seems that you consider your objectivity much better than mine.

The links do nothing but point to many sources for blame which I have already stated. he second link shows effect, not cause.

You might want to take this advice yourself..

If you are at all interested in gaining an objective understanding of the highly complex financial crises that we are currently experiencing, please read and view the links below

[REASON]

This quote is from the Fact Check link that you posted:

 

It's true that key Democrats opposed the Federal Housing Enterprise Regulatory Reform Act of 2005, which would have established a single, independent regulatory body with jurisdiction over Fannie and Freddie – a move that the Government Accountability Office had recommended in a 2004 report. Current House Banking Committee chairman Rep. Barney Frank of Massachusetts opposed legislation to reorganize oversight in 2000 (when Clinton was still president), 2003 and 2004, saying of the 2000 legislation that concern about Fannie and Freddie was "overblown." Just last summer, Senate Banking Committee chairman Chris Dodd called a Bush proposal for an independent agency to regulate the two entities "ill-advised."

 

This would seem to point to the underlying cause for later events.

 

Please don't insult my intelligence by cherry picking a quote out of context and posting it here in an attempt to make it seem supportive of your claims. Now I have to post other quotes from the same analysis that debunk your implications.

 

http://www.factcheck.org/elections-2008/who_caused_the_economic_crisis.html

As Congress wrestled with a $700 billion rescue for Wall Street's financial crisis, partisans on both sides got busy – pointing fingers. MoveOn.org Political Action on Sept. 25 released a 60-second TV ad called "My Friends’ Mess," blaming Sen. John McCain and Republican allies who supported banking deregulation. The McCain-Palin campaign released its own 30-second TV spot Sept. 30, saying "Obama was notably silent" while Democrats blocked reforms leaving taxpayers "on the hook for billions." Both ads were to run nationally.

 

And both ads are far wide of the mark.

 

 

And this quote is the continuation of the one you posted above.

 

But saying that Democrats killed the 2005 bill "while Mr. Obama was notably silent" oversimplifies things considerably. The bill made it out of committee in the Senate but was never brought up for consideration. At that time, Republicans had a majority in the Senate and controlled the agenda. Democrats never got the chance to vote against it or to mount a filibuster to block it.

 

By the time McCain signed on to the legislation, it was too late to prevent the crisis anyway. McCain added his name on May 25, 2006, when the housing bubble had already nearly peaked. Standard & Poor's Case-Schiller Home Price Index, which measures residential housing prices in 20 metropolitan regions and then constructs a composite index for the entire United States, shows that housing prices began falling in July 2006, barely two months later.

 

So who is to blame? There's plenty of blame to go around, and it doesn't fasten only on one party or even mainly on what Washington did or didn't do. As The Economist magazine noted recently, the problem is one of "layered irresponsibility ... with hard-working homeowners and billionaire villains each playing a role." Here's a partial list of those alleged to be at fault:

 

The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.

 

Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.

 

Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.

 

Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.

 

The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.

 

Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.

 

Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.

 

Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.

 

The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.

 

An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.

 

Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.

 

The U.S. economy is enormously complicated. Screwing it up takes a great deal of cooperation. Claiming that a single piece of legislation was responsible for (or could have averted) the crisis is just political grandstanding. We have no advice to offer on how best to solve the financial crisis. But these sorts of partisan caricatures can only make the task more difficult.

 

 

This information I gave in post #32 was taken from the Washington Post today. ''Fannie, Freddie Become Hot Topic in Campaign''. I would not call the Post a conservative paper.

 

It doesn't matter what you would call it. The entire purpose of this response by FactCheck was to correct claims made by MoveOn.org, and a television add called "Rein" by the McCain campaign that references a Washington Post article on the subject. It is a "hot topic," but it is full of inaccuracies and spin in an effort to confuse the populus and gain political advantage. You are helping to perpetuate the disinformation when you say:

In Jan. 2005, Chuck Hagel, a Repub., introduced legislation to create a regulatory agency to oversee Fannie and Freddie. This got no support from the congress. In 2006 McCain signed on to the legislation and made a 359 word speech in the Senate. The legislation failed to win approval. Obama was silent on the issue.

 

 

This seems that you consider your objectivity much better than mine.

The links do nothing but point to many sources for blame which I have already stated.

 

I'm not claiming my objectivity is better than yours, I'm claiming that your statements lack objectivity. You have not pointed to many sources that I'm aware of. In the posts of yours I've seen, you have blamed the Dems, ACORN, and Obama.

 

You have continually demonstrated in posts throughout this site that you are overtly partisan. I'm attempting to use objectivity to "rein" in your partisan claims in a science forums website that values accuracy with the information being presented. Do you value accuracy, or partisanship?

 

 

The second link shows effect, not cause.

 

Wrong. The second link is to an indepth 60 Minutes report that attempts to present to the American public the nature of the types of instruments and securities that were being sold on the market, and the use of a form of insurance called "swaps" that were used as backing for devalued securities while circumventing existing laws regulating insurance practices. The program provides a window into the activities that were going on without any oversight of these market practices.

 

http://www.cbsnews.com/video/watch/?id=4502673n

On Friday Congress finally passed - and President Bush signed into law - a financial rescue package in which the taxpayers will buy up Wall Street's bad investments.

 

The numbers are staggering, but they don't begin to explain the greed and incompetence that created this mess.

 

It began with a terrible bet that was magnified by reckless borrowing, complex securities, and a vast, unregulated shadow market worth nearly $60 trillion that hid the risks until it was too late to do anything about them.

 

This report goes indepth into some of the important causes of the crises we are dealing with in the financial market today.

 

It appears you didn't take the time to watch or read it.

 

 

The truth of the matter is, neither of these candidates is responsible directly, or indirectly, for the financial mess that is occurring, and neither will ever be able to claim sole responsibility for it's recovery.

[questor]

I can see you and I are getting nowhere with this. You continue to attribute statements to me i haven't made and ignore ones I have made. Here is another try.

Originally Posted by FactCheck.org

It's true that key Democrats opposed the Federal Housing Enterprise Regulatory Reform Act of 2005, which would have established a single, independent regulatory body with jurisdiction over Fannie and Freddie – a move that the Government Accountability Office had recommended in a 2004 report. Current House Banking Committee chairman Rep. Barney Frank of Massachusetts opposed legislation to reorganize oversight in 2000 (when Clinton was still president), 2003 and 2004, saying of the 2000 legislation that concern about Fannie and Freddie was "overblown." Just last summer, Senate Banking Committee chairman Chris Dodd called a Bush proposal for an independent agency to regulate the two entities "ill-advised."

 

This would seem to point to the underlying cause for later events.

 

This statement is seminal and is not negated in any of your other quotes.

Barney Frank and Chris Dodd were major players in trying to encourage lending to the lower income buyers. As I have stated before, this idea actually

started with the passage of the Civil Rights Act of 1968.

 

You said:

It doesn't matter what you would call it. The entire purpose of this response by FactCheck was to correct claims made by MoveOn.org, and a television add called "Rein" by the McCain campaign that references a Washington Post article on the subject. It is a "hot topic," but it is full of inaccuracies and spin in an effort to confuse the populus and gain political advantage. You are helping to perpetuate the disinformation when you say:

 

Why do you think this is the Fannie, Freddie article I quoted from the Post? The article was by a post writer and was in the paper Today. You are referencing an ad made some time ago. Have you checked your facts?

 

In the posts of yours I've seen, you have blamed the Dems, ACORN, and Obama.

Yes, they all had a hand in it, especially at the start. Once it got going Republicans failed to stop it, so they deserve a share of the blame. Maybe some of them supported making these sub-primes also, but I haven't heard their names.

 

You have continually demonstrated in posts throughout this site that you are overtly partisan. I'm attempting to use objectivity to "rein" in your partisan claims in a science forums website that values accuracy with the information being presented. Do you value accuracy, or partisanship?

Yes, I call myself a conservative. Is there a reason I should lie about it? I assume you also have partisan leanings? I value accuracy and truth. Show me where there is a lie and I will disavow that statement.

 

Cause and effect. You have a pool of swimmers protected by a gate while outside are hungry alligators. The lifeguards hired to protect the swimmers decide to go out for a party...they leave the gate open, the alligators rush in and eat the swimmers. To me, the first cause of the mayhem is the lifeguards.

[Donk]

Yes, I call myself a conservative. Is there a reason I should lie about it? I assume you also have partisan leanings? I value accuracy and truth. Show me where there is a lie and I will disavow that statement.

The point Reason is trying to make is that you aren't arguing for "accuracy and truth", you're arguing for a win. And in this company, you're going the wrong way about it.

 

Suppose you see a lynching. The perpetrators are three Democrats and three Republicans. You immediately identify the three Democrats. When asked about the Republicans, you reply by giving more details about the Democrats. You're not telling any lies, but there's a big lack of accuracy and truth there. And everyone can see it, which damages your whole argument.

 

If you speak to ALL the facts instead of cherry-picking for your own side, you might get more respect and more support.

[Turtle]

During the debate I developed a distinct distaste for the way Johnny drops the mike from one hand & catches it with the other when he has finished speaking. (In the spirit of bi-partisanship, I have the same distinct distaste for Willy's head shake/bob that he delivers when finished speaking.)

 

More or less I hate having to look at any of them talk, and I suggest debates go keyboard-to-keyboard live & none of us have to look at anyone's twitching, splendiferous beauty, hideous ugliosity, massive schnozola, or what-have-you.

[pgrmdave]

pfft - but that would take all the pageantry out of it!

[Racoon]

I disagree with the idea of ruthlessness being needed, but we do need some good, scrupulous management that is more concerned with the company's profits than their own. For AIG execs to spend hundreds of thousands of dollars after having to beg the government to help them is absolutely shameful.

 

What about the new WaMu CEO.. who made like 19 million in just three weeks when the writing was on the wall??

 

Golden Parachutes.

 

These assholes don't care about you. Or your retirement.

They are gonna' be in an underground bunker or tropical island when the **** really starts hitting the fan..

 

GREED.

pure and simple

[pgrmdave]

I don't mind them not caring about me or my retirement, I care about them not caring about the company itself. If there is greed, it should be coming from the stockholders, and the company, not from an individual who will run a company into the ground for pure personal gain.

[questor]

Donk, regardless of what you may think about my opinions, I call a spade a spade. I do not defend George Bush or his policies, but any honest observer of our governmental policies has to put a lot of blame on the Democrat congress. If you have an issue to discuss where you can show the Repubs are at fault, I would be happy to join in the criticism. When I consider the Dems at fault, that fact needs to be addressed, not ignored. The same for Republicans. I have been in the real estate business for 25 years and I know the initial seeds that started this problem. It was the liberal desire to increase home ownership for low income people. A good idea gone bad. Instead of you criticising my comments, why don't you study the issue historically and draw your own conclusions

[pgrmdave]

Questor, don't accuse someone of not thinking for themselves just because they disagree with you.

[REASON]

I have been in the real estate business for 25 years and I know the initial seeds that started this problem. It was the liberal desire to increase home ownership for low income people. A good idea gone bad.

 

Yes, you continually state this without presenting a shread of evidence that the low income housing market is at the center of the foreclosure crisis. Until you can provide some demographics that demonstrate that helping low income people get into affordable home ownership has since gone sour to the point of creating a low income housing foreclosure mess that has wiped out stock markets around the world, your speculative point of view will remain nothing but partisan rantings.

[REASON]

All right. In order to try and bring this part of the discussion to a close, I will offer you this, questor. This morning I read an editorial from someone who's opinion I respect with this issue, Paul Craig Roberts. In it, he does point to government pressure on lenders to provide loans to low income buyers as a factor in this situation, but not as the cause. But he also points to numerous other factors as well, sort of like a perfect storm.

 

He delineates the problem thoroughly, and gives his expert opinion of what needs to happen to correct the situation over time. You have to be able to see the entire scope of the problem correctly if you are going to understand what to do about it. But it will require some changes that I expect won't go over very well with the excessive climate of deregulation that has become so pervasive these days.

 

It is a solution none the less.

 

VDARE.com: 10/09/08 - A Solution To The Financial Crisis?

 

If the diagnosis is correct, the solution is multifaceted.

 

Instead of wasting $700 billion on a bailout of the guilty that does not address the problem, the money should be used to refinance the troubled mortgages, as was done during the Great Depression. If the mortgages were not defaulting, the income flows from the mortgage interest through to the holders of the mortgage-backed securities would be restored. Thus, the solvency problem faced by the holders of these securities would be at an end.

 

The financial markets must be carefully re-regulated, not over-regulated or wrongly regulated.

 

To shore up the credibility of the US Treasury’s own credit rating and the US dollar as world reserve currency, the US budget and trade deficits must be addressed. The US budget deficit can be eliminated by halting the Bush Regime’s gratuitous wars and by cutting the extravagant US military budget. The US spends more on military than the rest of the world combined. This is insane and unaffordable. A balanced budget is a signal to the world that the US government is serious and is taking measures to reduce its demand on the supply of world savings.

 

The trade deficit is more difficult to reduce as the US has stupidly permitted itself to become dependent not merely on imports of foreign energy, but also on imports of foreign manufactured goods including advanced technology products. Steps can be taken to bring home the offshored production of US goods for US markets. This would substantially reduce the trade deficit and, thus, restore credibility to the US dollar as world reserve currency. Follow-up measures would be required to insure that US imports do not greatly exceed exports.

 

The US will have to set aside the racial privileges that federal bureaucrats pulled out of the Civil Rights Act and restore sound lending practices. It the US government itself wishes to subsidize at taxpayer expense home purchases by non-qualified buyers, that is a political decision subject to electoral ratification. But the US government must cease to force private lenders to breech the standards of prudence.

 

The issuance of credit cards must be brought back to prudent standards, with checks on credit history, employment, and income. Balances that grow over time must be seen as a problem against which reserves must be provided, instead of a source of rising interest income to the credit card companies.

 

Fractional reserve banking must be reined in by higher reserve requirements, rising over time perhaps to 100 percent. If banks were true financial intermediaries, they would not have money creating power, and the proliferation of debt relative to wealth would be reduced.

 

Does the US have the leadership to realize the problem and to deal with it?

 

Not if Bush, Cheney, Paulson, Bernanke, McCain and Obama are the best leadership that America can produce.

[questor]

Until you can provide some demographics that demonstrate that helping low income people get into affordable home ownership has since gone sour to the point of creating a low income housing foreclosure mess..

 

Excuse me, I thought this was a credit crisis due to all the bad paper floating around made by predatory lenders preying upon low income buyers. What do you think occurred that recently opened the availability of loans which traditionally called for 20% down? Why would lenders open themselves to such increased risks? Do you think the houses with an 80% loan to value mortgage are also being foreclosed?

[Essay]

Excuse me, I thought this was a credit crisis due to all the bad paper floating around made by predatory lenders...

 

That is a drop in the ocean compared with the leveraging of that bad paper.

 

The actual bad mortgages couldn't be more than a few billions of dollars.

It is the leveraging (and the insurance sold on the leveraged stuff) that is the 60 Trillion number.

 

~ out to lunch

:evil:

[REASON]

Why would lenders open themselves to such increased risks?

 

In some instances, there was government pressure, but greed also played an important factor. There were plenty of risky loans given to middle income buyers and others who were refinancing in order to get a better rate with ARM loans like I was on my first house after my divorce. It's bigger than you want to make it.

 

On GMA this morning there was a story about a neighborhood full of foreclosures of $300,000 homes. Were those low income buyers that qualified for $300,000 homes?

 

 

Do you think the houses with an 80% loan to value mortgage are also being foreclosed?

 

Some are. I'm sure there is a certain percentage of foreclosures on regular conventional loans that has gone on all along. Peoples' situations change all the time such as those who have lost their jobs due to offshoring as an example.

 

But this is just a small piece of the overall puzzle. It isn't just about sub-prime loans. It is primarily about what the lenders, bankers, and insurance companies were doing with them that has severely magnified the problem.

[questor]

I would also like to bring this to a close. We started by discussing the cause of the problem and soon I am under attack for telling the truth. While it is true the problem was exacerbated by fraudulent practices by a number of people and institutions, the seeds were planted here:

The US will have to set aside the racial privileges that federal bureaucrats pulled out of the Civil Rights Act and restore sound lending practices. It the US government itself wishes to subsidize at taxpayer expense home purchases by non-qualified buyers, that is a political decision subject to electoral ratification. But the US government must cease to force private lenders to breech the standards of prudence.

This quote from your respected source. As I have said, I have been personally close to this problem since the Act of 1968 also forced onerous measures on investors and owners and led to the many tenant-landlord ordinances which are totally unfair to the landlord. These ordinances were put into place by liberal county and city boards in my area. It could happen that some conservative boards have done the same thing somewhere, and I would chastise them also. It was an attempt to change social dynamics without understanding the consequences.

 

P.S. in my area $ 300,000. IS low cost housing.

[REASON]

Here is an article from the Wall Street Journal pointing out that the foreclosure crisis is not focused around low income housing. Also on this page is a link to a series of highly detailed demographics showing the concentration of delinquent mortgages across the country per quarter since 2001, and the mean value of the loans by geographical region over the same periods, among other highly detailed demographic charts. It is clear that this crisis of foreclosures is spread among income groups suggesting that there is for more to this than just risky loans that lenders were forced to give to the low income market.

 

Developments : Changing Demographics of the Foreclosure Crisis

 

Not even affluent homeowners are safe from the foreclosure crisis. In Maryland, “counties with high incomes and pricey housing were among the hardest hit,” the Baltimore Sun found. “All but two of the 10 most affluent counties — those with median household incomes topping $70,000 — saw foreclosure cases rise by more than 50 percent,” the paper says. In these pricier neighborhoods, buyers had to stretch more to be able to afford homes, the paper explains. Plus, easy mortgage money at the beginning of the housing boom didn’t help the situation.

 

Are these communities destined to become “slumburbs?” As foreclosures hit even the most affluent areas, suburbs may become tomorrow’s slums, writes Carol Lloyd of the San Francisco Chronicle. “We’re not talking about mean inner-city streets getting meaner, we’re talking about the pristine, newly built developments of four-bedroom, three-bath dream homes produced in the last housing boom becoming ghettos for the poor and the disenfranchised,” she says. Overbuilding and long commutes are contributing to the decline of suburbs, experts quoted in the article say. And the signs of a decline are already evident: “Looters stealing copper pipe and siding from new homes, gunshots puncturing picture-perfect facades, squatters taking up residence in abandoned houses,” one expert describes. –Lydia Serota

 

And here's the link to the Demographics Charts. I highly recommend reviewing them.

 

The Wall Street Journal Online - Interactive Graphics