If we've learned anything this week its the fact that government does have an important role in the economic life of not only our country, but the world. As I write this Secretary Paulson has not made his address as yet, but the major elements of the government's plan to steady the financial markets are already known. The stock market is soaring and it appears that the Bush administration's efforts to stabilize things have helped. We're not out of the woods by a long shot, but at least a degree of confidence has been restored and markets around the world are reflecting that.
As a conservative I am not fond of the government stepping into our lives any more than necessary. This is certainly one of those times. By announcing that Money Market Funds will be insured like your bank deposits (FDIC) and limiting short selling for about 800 financial companies for a period of time, markets around the world have regained everything they lost earlier in the week. It appears that there will also be some form of restructuring of mortgages, which is a great idea.
Even Senator Chuckie chimed in this week - a 90 day freeze on all foreclosures until the debt can be restructured. I don't often find myself in agreement with Senator Shumer, but if you're going to bail out the large financial institutions, you need to extend a hand to the little guy as well.
The big problem, as I understand it, is that much of the paper that's being held on mortgages may well be based on over-valued property. Since determining the value of the "paper" is not something that can be accomplished overnight, banks are not willing to make any funds available for loans because no one knows for sure just exactly what they've got. The creation of a new federal agency to sort things out is a scary concept, but at this point I don't see any alternative if we're to maintain stability.
All the political finger-pointing in the world solves nothing; it only pleases the partisans. The truth of the matter is that greed and the lust for more money is at the heart of the issue. Making loans based upon the assumption that the housing market will continue to climb is just plain stupid. Did you have to come up with 20% down when you bought your first home? Most of us who've owned homes for sometime had to meet that criteria, but the "I want it now" American mentality overcame the tenets of good business. The banks gladly handed out the money with an adjustable rate, and that adjustable rate has come home to roost.
I applaud the quick action on the part of the President and his advisers. It has been reported that Congress will likely take action this weekend to pass the necessary legislation that will be part of the overall plan, as opposed to their earlier plans to adjourn because no one knew what to do. I can only hope that the leaders of both houses take the necessary action and not try to pass off some half-assed, watered-down legislation like the useless proposal to drill from 50 miles off the coast and out. When 88% of the oil is 50 miles or closer to the coast, you're not solving a problem or fooling anyone, and you're certainly not doing what the American people want you to do.
If Congress fails to act in the best interests of the country, there should be a lot of incumbents looking for new jobs come November 5th.
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18 comments:
You were not on the wagon long, Watson.
"I applaud the quick action on the part of the President and his advisers"
One Trillion Dollars of debt when it is all over, because free market, trickel down, de-regulate banking-real estate-healthcare-energy-Wall Street Republicans could not be trusted to function without oversight of the Federal Government.
When are you fiscal conservative Repubican voters going to realize that they don't have to raise your taxes if they get everything you have at the gas pump, the pharmacy, the bank, and the grocery store.
Who do you thinkis going to pay the $1 Trillion for these bail-outs, plus the already existing $9 trillion national debt?
I hate it when you mix issues in the same post, but as long as you brought it up, drilling is not going to solve the problem. Even what's his name oil mogel Pickens said so.
You're like Charlie Brown beleiving Lucy will not snatch the football out from under you at the last second. The Republicans ARE NOT DOING ANYTHING FOR MIDDLE CLASS AMERICANS. The middle class is shrinking. The lower class is growing. The upper class is getting fatter, and we citizens will be called upon to pay that ten trillion dollar debt.
Just for the record, the de-regulating you're talking about was also championed by the Dem's because it set aside normal borrowing requirements in order to make funds available for those who could never afford to own a home. And you would have the President do what? Allow the world to plunge into another depression? Try to remind yourself that two of Obama's top economic advisors were directly connected with Freddie and Fannie, making millions, some of which is currently under investigation. Avarice doesn't dominate one party anymore than it dominates one race - if you're human, you're capable.
Lord, if you're whining like this now, I can't imagine the depth of your hysteria once we swear in President McCain.
PS - I'm still on the wagon - this was economics and should have been treated by both parties as the national emergency it remains. Making it political was your choice.
The stock market is soaring? What to hell country are you living in Watson? Surely not the USA.
Yep, treat this as a non-political issue. Would it be treated by you as a non-political issue if a Democrat was president and the country had been run by Democrats for almost 8 years. Be honest - I believe the answer would be no.
I agree the Dems went along with the Republicans on deregulation. But remember where the buck stops. Course, in Republican-land, the buck never stops on their desk.
BTW Watson, I suggest you google Rick Davis and Fannie Mae. What you find may surprise you. I'm sure you will be able to explain it away however. To save you a little trouble you might just click on this link.
Luckily, I live in the greatest nation on the face of the earth. Stock markets around the world have recouped almost all of the losses from earlier in the week. I'm sure I could have found a better word than "soaring", but the recovery from earlier in the week was amazing to say the least.
Mr. Davis is doing a great service to the country, along with thousands of others from both parties. Both parties got us into this mess, and your inability to contribute anything other than partisan sniping is simply a waste of time and counter-productive.
Would you like me to make a ridiculous generalization along the lines of your "buck stops here" assertion in regards to your inability to answer the question: "What would you have him do?".
Okay, here goes - this should remind you of the type of rhetoric we're getting from both parties now, and it will be utterly ridiculous:
Let's see: constant whining; point fingers at everyone but themselves; denying ever having had anything to do with any problem, ready to quit when things get tough, ready to bend over and assume the position for any union, ready to tax you to death (including the death tax), never met a camera they didn't like, always ready to assume the worst about our military, happy to keep as many minorities as possible dependent instead of self-reliant, fond of talking big and delivering little, only interested in helping illegal aliens because they think they'll vote for them - yup, sounds like a Democrat to me.
Trust me when I say that I don't believe any of that. Everyone of those assertions could be applied to someone in the body politic, but they wouldn't necessarily have to be a Democrat, Republican, Libertarian or even a Greenie.
If we don't learn how to break things down to the basic level - human beings - the rift will never heal. There are good and bad people in all walks of life, all genders, all races, all religions, all political affiliations - you get my drift.
If you have any suggestions as to an alternative the President could have pursued I'd like to hear it. If all you want to do is play the blame-game that's your choice, but
it won't solve anything.
In other words, you agree that only Dems should be criticized when there is a crisis. You could have said it in many fewer words.
Apparently you have difficulty reading - are you dyslexic? Where did I say that only Dems should be criticized? I don't mind arguing when you display at least an iota of reason, but you apparently left your reasoning powers in your other brain today.
You still didn't answer the question - what should we be doing differently - but since you don't have an answer all you're left with is empty sarcasm.
Get back to me when you have something relevant to say.
""Try to remind yourself that two of Obama's top economic advisors were directly connected with Freddie and Fannie, making millions, some of which is currently under investigation.
No you would never attack a Dem for the economic crisis. You and John McCain are just truthful angels.
Alternatives the President is choosing??? What alternatives? Other than a 2 minute appearance in the Rose Garden the other day, we haven't heard a thing from our President on this issue.
Yessir, I've been a faithful reader of this blog for some time. I agree it's not like you to ever be partisan.
Watson,
Please burry that "Death Tax" out undr the rose bushes with the rest of the Republican red herrings.
"THE GOOD NEWS is it's becoming increasingly less likely that you'll owe estate taxes. That's because Congress has approved a schedule that increases the amount an individual can leave to heirs tax-free to $2 million in 2006-2008 and to $3.5 million in 2009. In 2010, it will supposedly be repealed altogether."
http://www.smartmoney.com/tax/homefamily/index.cfm?story=estatetax
Welfare mamas, aleins streaming across the borders stealing all our jobs and health care, hating the troops, hating the flag,,,,,
They're all red herrings created to distract from the real failures of the current administration. You really need to learn to recognize them and keep your focus on the real issue.
Of course I can be partisan, but in this case I think there's enough blame to go around for both parties. The quote you italicized was only meant to point out that both candidates have advisors that were associated with Fannie & Freddie, no one's hands are clean.
The President is doing what he should - allowing his economic advisors to develop a response to the situation. If he were on TV wringing his hands every day I don't think we would have seen the stock market post two days of gains, the likes of which we haven't seen since 1987 (story on The Drudge Report).
The alternatives I was looking for were your suggestions as to what the President should be doing differently. It's not an easy question to answer because even the experts with years of experience are still guessing - that's why economics is an art, not a science.
There are plenty of issues we can be partisan on, but this shouldn't be one of them.
Apparently I do have difficulty reading - I must be dyslexic. It should have been obvious to me that when you specifically pointed out that Obama had advisers associated with Fannie Mae, that it meant that McCain also had advisers associated with Fannie Mae. I really do have to be more careful when I read this blog.
No, they do not both have campaign advisors connected to Fannie and Freddie.
Franklin Raines was not an advisor to the Obama Campaign. He has made statements to that fact. The truth that McCain is stretching to an obscene limit comes from an article where Raines told a reporter:
“was chatting with Raines during the photo shoot, and asked "if he was engaged at all with the Democrats' quest for the White House. He said that he had gotten a couple of calls from the Obama campaign. I asked him about what, and he said 'oh, general housing, economy issues.' ('Not mortgage/foreclosure meltdown or Fannie-specific,' I asked, and he said 'no.')"
I don't call hat being an advisor except in the most technical sense.
Obama himself say’s that he met Raines one time for about five minutes.
On the other hand:
Aquiles Suarez, listed as an economic adviser to the McCain campaign in a July 2007 McCain. He was formerly the director of government and industry relations for Fannie Mae.
The lobbying firm of Charlie Black, one of McCain's top aides, made at least $820,000 working for Freddie Mac from 1999 to 2004. The McCain campaign's vice-chair Wayne Berman and its congressional liaison John Green made $1.14 million working on behalf of Fannie Mae for lobbying firm Ogilvy Government Relations. Green made an additional $180,000 from Freddie Mac. Arther B. Culvahouse Jr., the VP vetter who helped John McCain select Sarah Palin, earned $80,000 from Fannie Mae in 2003 and 2004, while working for lobbying and law firm O'Melveny & Myers LLP. In addition at least 20 McCain fundraisers have lobbied for Fannie Mae and Freddie Mac, pocketing at least $12.3 million over the last nine years.
For years McCain campaign manager Rick Davis was head of the Homeownership Alliance, a lobbying association that included Fannie Mae, Freddie Mac.
If you can’t tell the difference between these two, you are more biased than I thought, Watson.
Now you'll say, well it's not that important anyway. Not important that John McCain's campaign staff looks like the Who's Who of Fannie and Freddie?
From wikipedia:
"Raines and Obama currently dispute any mutual association, and Obama denies having received any advisory services from Raines.[14] However, Barack Obama is the 3rd highest recipient of contributions from Fannie Mae of any American politician, receiving over $105,000 in a single year.[15]
On July 16, 2008, The Washington Post reported that Franklin Raines had "taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters." [16]. Also, in an editorial in August 27, 2008 titled "Tough Decision Coming", the Washington Post editorial staff claimed that "Two members of Mr. Obama's political circle, James A. Johnson and Franklin D. Raines, are former chief executives of Fannie Mae."[
Why do the hardworking middle class and powerless poor have to come up with 700 Billion dollars??
Why can't Bush, Cheney and McCane's ask 700 rich friends to each write a Billion dollar check? Problem solved!
Calling
Bill Gates (53 Bil), Warren Buffett (46 Bil), Sheldon Adelson (21 Bil), Larry Ellison (20 Bil), Paul Allen ( 16 Bil), Jim Walton ( 16 Bil), Christy Walton (16 Bil), Rob Walton (16 Bil), Mike Dell (16 Bil), Alice Walton ( 16 Bil), Helen Walton ( (16 Bil), Sergey Brin ( 14 Bil), Larry Page ( 14 Bil), Jack Taylor ( 14 Bil), Steve Ballmer ( 14 Bil), and on and on and on.
Warren Buffett has already shelled out $5 billion. Don't count on the the Waltons however.
Any comment on John McCain screwing up your request for bipartisanship? Or do we blame the lack of a plan on Barack Obama?
I'll refer you to "The 545" for my assessment of who's to blame. As I noted repeatedly, there's enough blame to go around for everyone. This comedy of errors will continue as we watch them grab their share of the $700 billion while coming to the conclusion that not one of them is to blame for the current crisis.
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