OK, Congress is now on the warpath and wants heads on sticks for "who did this to us". Well I think they should have what they like. If you have not done so already, read this short piece by Charlie Calomiris and Peter Wallison (Charlie Calomiris is interviewed about the economics of the Great Depression in my second book and is a majorly serious scholar).
http://online.wsj.com/article/SB122212948811465427.html
http://online.wsj.com/article/SB122212948811465427.html
Is there anything here that is beyond common comprehension???
There is plenty of blame to go around, but maybe Congress should start by looking in the mirror. But this is not going to happen. Just look at the behavior of a one Mr. Barney Frank. It wasn't his fault...OH NO...don't blame him.
There is plenty of blame to go around, but maybe Congress should start by looking in the mirror. But this is not going to happen. Just look at the behavior of a one Mr. Barney Frank. It wasn't his fault...OH NO...don't blame him.
This is the worst Claude Raines impersonation I have ever seen. Remember old Claude (that is him above next to Representative Frank)? He was the guy in Casablanca who closed down Humphrey Bogart's casino when he was "shocked, shocked to find gambling going on." Then someone handed him his winnings and he said "Thank you."
The good folks of Congress are so pathetic and nauseating because they don't even have the guts to admit they were gambling and encouraged all the too-smart-by-half derivative geeks on Wall Street to come along for the ride. You make these stupid loans...we will buy them and insure them. Heads you win, tails you win and get bailed out.
I tell you what all you broken down horse players out there, if someone said to me, "Parker, go to the horse races every day...bet all the money you got. If you win you keep it. If you lose Warren Buffet will give you all your money back and you can start again tomorrow fresh." I would only have one question, "who you got in the pick 6 tomorrow at Belmont?"
Years ago, Colin Powell indicated he thought America needed "a new sense of shame." I think that is more true now than ever. Congress is the last place you will find it.
10 comments:
Does anyone have a clip from Casablanca, on youtube or else? That be fun to see *SMILE*.
And I am not sure if the words like "honesty", "accountability", or "truthfulness" are in the vocabulary of any serious politician. The way I look at it is that ALL politicians steal because it is PART OF THE JOB and this is WHY they want the job. However, some steal less than others and in the process they may, if they are lucky, do something useful; to me THESE GUYS are The Greats.
Well, that has been my experience from following Polish politics. It is pretty cynical, I know, but this way I set myself up for occasional pleasant surpises ...
When ever you read the good Doctor's blog it is always a gamble!
http://www.youtube.com/watch?v=nM_A4Skusro
To Grodner - are you saying that this is a problem with adverse selection or with moral hazard? If stealing "is WHY they want the job", then it must be adverse selection. On the other hand, if stealing "is PART OF THE JOB", couldn't it also be a problem with moral hazard?
It is amazing the Barney Frank is trying to deflect blame away from himself by now saying race is the issue in the Subprime Blame game. The roots of this mess goes back to the Carter administration when government officials, egged on by left-wing activist nuts, began accusing mortgage lenders of racism and "redlining" because urban blacks were being denied mortgages at a higher rate than suburban whites. The pressure to make more loans to minorities became relentless. Congress passed the Community Reinvestment Act, empowering regulators to punish banks that failed to "meet the credit needs" of "low-income, minority, and distressed neighborhoods." Lenders loosened their underwriting standards made bad loans, enabled Fannie Mae and Freddie Mac by encouraging them to support "subprime" lending, authorize "flexible" borrowing criteria, and buying up the questionable mortgages that ensued. All this was justified as a means of increasing homeownership among minorities and the poor. Affirmative-action policies trumped sound business practices. Lack of credit history became a non-issue and was deemed to be a non-factor in deciding who got a mortgage. Now that the wave of foreclosures is rolling through the inner cities in America, who is NOT TO BLAME – the democratic hero – Barney Frank. Frank’s fingerprints are all over this mess. Time and time again, Frank insisted that Fannie Mae and Freddie Mac were in good shape. Five years ago, for example, the Bush administration proposed much tighter regulation of the two companies. Frank was adamant that "these two entities are not facing any kind of financial crisis." When the White House warned of "systemic risk for our financial system" unless the mortgage giants were curbed, Frank complained that the administration was more concerned about financial safety than about housing. Now that the bubble has burst and the "systemic risk" is apparent to all, Frank declares: "The private sector got us into this mess." Bill O’Reilly had it right – Barney Frank is a COWARD ! Instead of admitting that he and many of his fellow cogressmen made a HUGE mistake, he is looking to deflect the blame on race or the private sector (which also has plenty of blame in this mess).
So – lets focus a little bit on Barney Frank:
While a Congressman, Barney Frank answered a personal ad in the Washington Blade in which a male prostitute, Stephen Gobie, drew public attention to his "hot bottom" and "large endowment." Frank began to pay Gobie for sex and even invited Gobie to move in with him. When the arrangement soured, Gobie revealed to the press that he had been running a full-service prostitution ring out of Frank's Capitol Hill apartment. In comparison, Senator Larry Craig places a bag down in front of an airport bathroom door, touches the leg of a guy in the next stall, and is now disgraced forever. Why then is Craig on the ropes while Frank continues as a Congressman in good standing? Certainly the difference isn't that they are both gay, which seems to be a common factor in both cases. Craig's is much less serious….by contrast, Frank was employing a male hooker for paid favors and providing operating facilities for a D.C. prostitution ring. I suppose the difference is that Craig has been a champion of moral values--which makes him vulnerable to the charge of hypocrisy--while Frank is a HUGE LIBERAL - which means he gets to do as he pleases. (Bill Clinton and Ted Kennedy are also given free passes for similar reasons.) Another difference, as far as the mainstream media is concerned, is that Craig is a Republican. If you're looking for two-faced people who abuse their power, Craig may not be the greatest offender here.
So what happens to Barney Frank after all of this - the democrats make him the Chairman of the House Financial Services Committee.
As Reagan once said: "In this present crisis, government is not the solution to our problem; government is the problem."
Frank – Pelosi – Obama – God Help this country
Dear Anonymous: The first part of your comment is informative although I am sure many would consider controversial. Intellectually honest controversy is OK here. However, the good doctor would ask for you to calm down and not write such things in the second part of your comment. We know these personal things about Representative Frank and Senator Craig. The good doctor and his readers are informed of this garbage. Perhaps it needs repeating. The good doctor asks politely that if it does you repeat it somewhere else. What is the good doctor going to say to our more sensitive, or female, or our itsy-bitsy econ blogging child guests when they see references to "hot botttoms" and such? Let us stick to the economics please. We love having you, just clam down a bit if you would.
Anonymous - thanks for the link!
".. your winnings sir ... ", hilarious.
To armchaireconomist:
I would understand adverse selection here when dishonest people become politicians by posing as honest ones. However, I believe even the most honest person can be turned into dishonest one, given sufficient incentives. And I believe the whole idea of the "democratic government" as it is implemented in the present form, is perfectly designed to corrupt almost any single honest person. In other words, the system, in my opinion, makes stealing part of the job.
I would understand moral hazard here when politicians steal because they know that if they have to be prosecuted they can either change the rules or intimidate the prosecutors. Therefore, they take too much risk and "oversteal". And in that sense I would actually agree that politicians engage in moral hazard. But again, I think it is the system that makes them behave that way, rather then they choose to do it before they decide to run for office. So maybe I have to reverse my previous opinion that politicians engage in politics because their primarily objective is stealing - maybe it is just a side show, and with time it becomes the main show.
So in the end I would not blame the people, but rather the system that has the "wrong" incentives. I am simply quite cynical about politics and politicians but the matter of fact is we are still alive, the world is moving on, and we can still joke about it! Thanks for your comment armchaireconomist.
To andrew_grodner:
I agree with your assesment in the aggregate. The only exception is that I think you have to blame the individuals. Yes, the system has very large problems, but what ever happened to personal accountability?
In addition, I feel that a small share of the blame for the mess we are in must also lie on those who took out these loans. You have no job, no assets, and you think you can afford a mortgage? And don't blame it on adustable rates - read the fine print. Zero accountability.
Accountability is a big issue here.
i agree with armchair in that some blame lies with homeownwers simply walking away from their obligations
The only way to take care of the no good politcians is to pull them out of the muddy muck of earmarks we need send The Turtleman after them!
http://www.youtube.com/watch?v=Gn8EQ0azXpQ
Post a Comment