Why I'll be voting for Obama

[Robert]

To tell you the truth I don't care for either Candidate, but Obama (unlike McCain) hasn't pushed for this deregulation of Wall Street that has got American on the brink of collapse.

Unbridled greed bears fruit and it is the Republicans' naivety that makes the assumption that if you give the super rich a break they'll do the right thing and watch out for the little guy (provide jobs, etc). Well, someone tell Reagan's followers that "Trickle down economics" just doesn't work!

Now from Wall Street’s point of view it’s a win-win situation. Greed, short term, pays well. And greed, long-term, when it collapses, well…you’ve got “corporate welfare” where the taxpayers bales you out.

So either way the Republicans are mostly to blame for this mess. Of course they'll deny it and get all self-righteous!

Rob

[Woody]

This is very upsetting. I do hate to be on the opposite side of the fence from my esteemed friend Rob. This doesn't happen often. And I just hate it. But it is something I have to do. Rob ... I disagree with you.

McCain/Palin

[rudywoofs (Pam)]

Robert said:

Quote:

So either way the Republicans are mostly to blame for this mess. Of course they'll deny it and get all self-righteous!

wow...what a broad stroke denunciation of a whole group of Americans

[Woody]

I'm with you Pam. I just don't see how you can blame it on the Repubicans when it is the Demos that control the House and Senate.

[Robert]

I'm with you Pam. I just don't see how you can blame it on the Repubicans when it is the Demos that control the House and Senate.

Yes, the Demos do have control now (and they ain't doing the greatest job), but it was Bush and his band of merry Rebubs that wanted less Wall St. regulation. And they did this before the Demos got control.

Thank you Bush, ...not!

Rob

[Woody]

And they listened to him? Since when do they do that?

[Robert]

Like I said it's the Republicans' assumption that if you give the super rich a break they'll do the right thing and watch out for the little guy (provide jobs, etc). That's my primary reason in voting Demo....

Rob

[Robert]

Robert said:

Quote:

So either way the Republicans are mostly to blame for this mess. Of course they'll deny it and get all self-righteous!

wow...what a broad stroke denunciation of a whole group of Americans

I'm sure it's not all Repubs...but probably most of them.

[Jeannieb43]

And if McCain had had his way, privatizing Social Security, there our Social Security fund would go, down the drain, along with all the bankrupt financial institutions!

McCain doesn't have the slightest knowledge of economics. These next four years are going to be a tightrope act for the administration; we don't need a novice trying to run things. Give me Obama (summa cum laude graduate of Harvard Law School) any day, over McCain!

[Dr. Shane]

Well last week someone said the sky is falling. And said, no it's not. At the end of the week the market ended just slightly down than where it started. I was wrong only in that it recover faster than I though it would.

The blame for this collapse belongs to everyone in Washington.

Greenspan’s sins return to haunt us

Back in 2002, when his reputation as “The Man Who Saved the World” was at its peak, Alan Greenspan, former chairman of the Federal Reserve, came to Britain to pick up his knighthood. His biggest fan, Gordon Brown, now the UK prime minister, had ensured that the citation said it was being awarded for promoting “economic stability”.

During his trip, Mr Greenspan visited the Bank of England’s monetary policy committee. He told them the US financial system had been resilient amid the bursting of the internet bubble. Share prices had halved and there had been massive bond defaults, but no big bank collapses. Mr Greenspan lauded the fact that risk had been spread, using complex derivative instruments. One of the MPC members asked: how could this be? Someone must have lost all that money; who was it? A look of quiet satisfaction came across Mr Greenspan’s face as he answered: “European insurance companies.”

Six years later, AIG, the largest US insurance company, has in effect been nationalised to stop it blowing up the financial world. The US has nationalised the core of its mortgage industry and the government has become the arbiter of which financial companies should survive or die.

Financial markets have an enormous capacity for flexibility, but market participants need to be sure that there are rules, and a referee willing to impose them. Permanent damage has been done to the financial system, despite the extraordinary measures of Messrs Henry Paulson, the US Treasury secretary, and Ben Bernanke, the Fed chairman, to address the problems that stem from the actions of their predecessors. As Mr Paulson has suggested, he is playing a hand dealt by others.

Many blame the Greenspan Fed for this mess. They are right, but not for the reason often cited. It is unfair to say low interest rates are to blame. In the past decade, there is no evidence the US suffered from excessive growth leading to inflation. The economy needed low interest rates and a fiscal stimulus to avoid a severe recession. The Fed was right to do its bit.

Where Mr Greenspan bears responsibility is his role in ensuring that the era of cheap interest rates created a speculative bubble. He cannot claim he was not warned of the risks. Take two incidents from the 1990s. The first came before he made his 1996 speech referring to “irrational exuberance”. In a Federal Open Market Committee meeting, he conceded there was an equity bubble but declined to do anything about it. He admitted that proposals for tightening the margin requirement, which people need to hold against equity positions, would be effective: “I guarantee that if you want to get rid of the bubble, whatever it is, that will do it.” It seems odd that since then, in defending the Fed’s inaction, he has claimed in three speeches that tightening margins would not have worked.

The second incident stems from spring 1998 when the head of the Commodity Futures Trading Commission expressed concern about the massive increase in over-the-counter derivatives. These have been at the heart of the counter-party risk in the crisis. Mr Greenspan suggested new regulation risked disrupting the capital markets.

At the turn of the millennium, with no move to tighten margin requirements, a feedback loop sent share prices into orbit. As prices rose, more brokers were willing to lend to buy more shares. As share prices went up the buying continued, until the bubble burst. To create one bubble may be seen as a misfortune; to create two looks like carelessness. Yet that is exactly what the Greenspan Fed did.

Bruised by stock market losses, Americans bought houses. The mortgage industry used securitised bonds to ensure that the people who initiated the mortgage did not worry about getting paid back; risk was packaged and sold to others. This time Mr Greenspan did not just stand aside. He said repeatedly that housing was a safe investment because prices do not fall. Home owners could wait out any downturn. Is it any surprise that so many people thought if the world’s financial genius held this view it must be all right?

Even as things went completely wild, Mr Greenspan dismissed those who warned that a new bubble was emerging. It was just a case of a little “froth” in a few areas. Later, after waiting until 2007, two years after he left office, he conceded that “froth” had been his euphemism for “bubble”. “All the froth bubbles add up to an aggregate bubble,” he told the Financial Times.

This time, as with the equity bubble, the mistake was not to set interest rates too low; it was to stand back as wildly imprudent policies were pursued by mortgage lenders. Indeed, any lender would have been encouraged by his words in April 2005: “Where once more-marginal applicants would simply have been denied credit, lenders are now able to quite efficiently judge the risk posed by individual applicants and to price that risk appropriately. These improvements have led to rapid growth in subprime mortgage lending.” Well, he was right about the rapid growth in subprime lending.

Mr Greenspan was in charge of supervising and regulating much of the banking industry for two decades. The Fed says it is responsible for ensuring “safe and sound banking practices”. It is right that other regulators should have stepped in, too – the US regulatory structure has not kept pace with market changes . But given the Fed’s institutional importance and Mr Greenspan’s personal stature, does anyone doubt that the Fed could have used its limited powers to ensure a closer examination of what was going on?

Mr Greenspan realises that something big has happened and describes it as a “once in a hundred years” event. But then, you do not get Alan Greenspans coming along every day.

[blue text from link]

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Who thinks that had Obama been President things would have been any different? This crosses party lines. Most people thought things were going well. It was a small minority warning that the housing bubble was going to burst. The Federal Reserve is very powerful and influential. While I do blame the politicians in Washington, the largest share of the blame I lay on the Federal Reserve.

[Jeannieb43]

Oh, but it didn't "recover." The Dow Jones Average rebounded. But the problems with the subprime mortgages which have defaulted, the foreclosed houses standing vacant, and the entire population unable to pay the outrageous prices at the pump and at the market... none of that has recovered.

There's a long, long road ahead of us yet. We may make it back to the equilibrium of the Clinton presidency, and we may not.

It's not smart to be so flippant about it.

[Dr. Shane]

Wall Street survived the Great Depression. I expect it will survive whatever is in front of us. Just don't invest in high risk stocks and they will survive whatever we are about to go through.

[Bravus]

But all your comments are missing the point, Shane. Hundreds of billions, or possibly trillions, of dollars of taxpayers' money is being used to bail out those who made bad bets. The market participants got all the upside - the average Joe didn't - but when the bill comes due for the downside he's the one who gets to pay it - and pay and pay. It's not right, it's not fair, it's not just - and if it had happened with a Democrat president there would have been howls to the heavens.

Try to lay aside partisanship for a minute - I'm talking to everyone now, not just to Shane. Is what's happening fair? Uh, uh - don't talk about blame. Just tell me: is it fair?

[jasd]

QR frame:

"Life is not fair; get used to it." –Bill Gates

I am very leery of any Party that preaches fairness; to wit, Marx, Trotsky, Lenin, Stalin, ...Mao, and the rest of that horrible affliction that

cursed mankind with their ideology of fairness.

Food and raiment. That's fair. Anything else begins to take on the robe of sophistry.

Even Gd said that there will be those in His Kingdom who will shine as the sun and others will have everlasting shame. I think political fairness forwards a concept by which all will glow as the moon, mebbe?

[Bravus]

Something I note in those on the right when they're apologising for their boys: they're very ready to take "it is so" and make it into "it is as it should be".

Life is not fair. This is fact. Life should be and can be fairer. This is aspiration and dream and goal and ideal. A leader should call us to our best.

Life will get fairer only if we want it to. If we are happy that life (for others at least) is nasty, brutish and short, it will be.

[jasd]

>>McCain doesn't have the slightest knowledge of economics.<<

...and Obama does!? I recall that McCain was almost the only one in recent years who expressed in Congress both concern and the desire to forestall the derivatives spiral. That said,

it was not until the beginning of the fourth quarter ’06 that the bundled debt instruments market started to unravel.

Wha’appened, in the final quarter of ’06? Can anybody spell Democrat Congress!?

>>These next four years are going to be a tightrope act for the administration; we don't need a novice trying to run things.<<

Yet you continue with the astounding statement; to wit...

>>Give me Obama (summa cum laude graduate of Harvard Law School) any day, over McCain!<<

So, tell us exactly how it is that you’ve established in your mind – that Obama is more qualified re economics vis-à-vis McCain.

Per summa cum laude: wasn’t it just the other day that you stated Obama was a magna cum laude graduate? There seems to be a lot of this sort of thing coming out of the Obama camp...

Here I thought I had a lock on hyperbole :-(

[Dr. Shane]

When I evaluate politicians, if they have ever been a lawyer that is a strike against them. If they have worked in business in the private sector, that is a strike in their favor.

Many average Joes did benefit from this. Many poor Americans were that didn't have enough money for the first and last month's rent were able to buy a house and become homeowners. A lot of them defaulted, at no fault of the lender, but a lot of them didn't and they are still homeowners today. Over 50% of Americans own stocks either directly, through retirement funds, 401k plans or life insurance plans. When the market does well Americans do well.

[jasd]

>>...they're very ready to take "it is so" and make it into "it is as it should be".<<

I did not state that “it is as it should be” or did I imply that. I simply stated quote, “Life is not fair...”

I think all persons and peoples have expectations. That does not necessarily translate to entitilements.

>>Life is not fair. This is fact. Life should be and can be fairer.<<

Okay, I can get behind personal initiative.

>>This is aspiration and dream and goal and ideal. A leader should call us to our best.<<

As I’ve stated to effect, there have been too many leaders who called their constituents to do their best – whose same constituents found, to their immense personal cost – that it was a siren call.

>>Life will get fairer only if we want it to. If we are happy that life (for others at least) is nasty, brutish and short, it will be.<<

Beware the rhetoricist.

[jasd]

>>band of merry Rebubs<<

That's great! I like it.

Per "deregulation": the problems we are presently experiencing have their inception in and because of a law passed in 1977 called the Community Reinvestment Act that made it illegal/criminal to practice redlining – that is, awarding and/or denying credit according to the applicant’s ability to service the loan. The lending institution could no longer take note of so-called demographic blips – whereby determination was formerly made re loan applications. That spells ‘b-a-d l-o-a-n-s’.

Those laws are implemented through a vast system of bureaucratic ‘regulations’ and supposedly represent the best of social activism.

Regulations have the effect/force of law.

Most notable among the advocates of these so-called ‘reinvestment’ programs have been Schumer (D) and Frank (D). Acorn, remember Acorn? (Obama’s vehicle) actively opposed attempts to curtail abuses...

[Tom Wetmore]

>>McCain doesn't have the slightest knowledge of economics.<<

...and Obama does!?...

So, tell us exactly how it is that you’ve established in your mind – that Obama is more qualified re economics vis-à-vis McCain...

Well, for starters, he has shown a substantially deeper grasp of the economic issues and certainly appears to have given them far more thought than McCain.

If you will take the time to read this lengthy article specifically about it you will see what I mean:

Obamanomics

Tom

[Dr. Shane]

We are finding out now that the people placed in positions of trust over the economy didn't know as much as everyone thought they did. That includes Federal Reserve chairmen, Treasure Secretaries and members of the banking and finance committees.

To be fair to both candidates, neither of them have been involved in any of those positions. So, at least, neither of them are to blame. Looking at the economic qualifications of the candidates, I can't see that either one has more qualifications than the other.

[Jeannieb43]

To be fair to both candidates, neither of them have been involved in any of those positions. So, at least, neither of them are to blame. Looking at the economic qualifications of the candidates, I can't see that either one has more qualifications than the other.

spoken ex cathedra.

[Tom Wetmore]

...Looking at the economic qualifications of the candidates, I can't see that either one has more qualifications than the other.

It would seem rather difficult to reach that conclusion after reading the whole article by David Leonhardt and the Albert Hunt article from Bloomberg posted by Jeannie... unless... (I am trying to be nice, Shane, but you are not making this easy...) Turn your 3 little Republican monkeys' filter off and read those articles again...

I have read both of them twice and fail to see how you could honestly come to or maintain that position... not to mention just listening to what they each said about the economy just last week.

Tom

[Dr. Shane]

Neither McCain nor Obama have executive experience in which they were in charge of a budget. Neither have sat on a committee where they were an integral part of managing an economy. Bloomberg has a dog in the fight. I don't expect to get straight talk from him.

[olger]

yup