Democrats & Liberals Archives

Republicans: Socialists for the Rich

Obama: “What we’ve seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed.”

McCain yesterday morning:”The Fundamentals of the Economy are Strong”
oops! McCain later yesterday:”We are in a total crisis.”

And the Republicans, including John McCain, want to privatize Social Security. At least the Democrats (and a few Republicans who got an earful from their constituents) stopped that disaster. Can you imagine if Lehman Brothers, Bear Stearns, Merrill Lynch, and AIG were taking care of some huge chunk of that public trust?

Obama has it right - and he's been consistent. It's "I still need to be educated [on the economy]" McCain whose message bounces around to suit the latest story. Looking at his record, however, he has a consistently deregulatory approach.

After years of relaxing the rules for financial institutions, and failing to properly enforce those which remain, the party which decries any liberal inclination to tighten regulations as "socialist" is essentially nationalizing troubled corporations, allowing taxpayers to take on the risk, while bailing out the speculators. Sure Democrats collaborated on this disaster, but Republicans, free market fundamentalists, and the greed-heads on Wall Street have led the charge. I expect we will see a few sacrificial lambs among the worst of the speculators, but plenty of folks will flee the scene with millions while tens of thousands of victims will face foreclosure or worse as a result of this fiasco.

And yet McCain claims Obama will "raise your taxes", in spite of independent analysis of the two campaigns' promises which shows Obama's plan lowers taxes MORE than McCain's for over 80% of Americans.


courtesy Washington Post; Alchemy Today; and a study by the Tax Policy Center

McCain's charge is only true if he is talking to the wealthiest 1% of Americans, and even then the raise in taxes is only based on allowing Bush's tax cuts to expire. Calculate your estimated tax cut under the two plans to discover whether McCain is talking to you.

America wake up! McCain only has your economic interests at heart if you earn over $300,000 annually, and even then what good is tax relief if the economy is falling apart around you. I don't think he wants to screw up, but he doesn't even have a clue who he should surround himself with for economic advice. His pal Phil Gramm was his chief economic advisor up until a week after Gramm opined America had become "a nation of whiners", inflicted with only a "mental recession".

Obama in contrast picks his people based on their intellect, and includes many who don't always agree with him. Now there's a refreshing change.

The AIG rescue is only the latest shoe to drop. America we can't afford much more of this. It's time for real leadership. It's time for new inspiration. Obama is clearly our best hope. As he concludes:

The dream of the American people must not be endangered anymore!

Posted by Walker Willingham at September 17, 2008 11:00 AM
Comments
Comment #263170

In McCain’s defense (partially), the fundamentals comment was in the middle of comments about a crisis. Though in true McCain fashion he concocted a lie to explain the comment. McCain tried to say that the fundamentals he was talking about when he said that the fundamentals were still sound were the American workers and the entrepreneurial spirit of our people. Nice try liar! This guy is really without shame.

Does he think anyone will believe that, after a 26 year career of deregulation that has led to the biggest government bailouts in our history, that he has seen the light? Not even close, he says he wants to study the cause of the crisis. Well, McCain, study this: deregulation = huge bailouts and tanking economy. He now wants to do the same to Social Security so that he can make the recent bailouts look like chump change in comparison to the guaranteed bailout of Social Security that will follow a McCain presidency. We are well on our way to a privatized military where soldiers work next to mercenaries making more than their monthly salary in a week. What’s next privatizing the police departments so women everywhere can pay for their own rape kits after being the victim of a heinous crime as Sarah Palin did in Wasilla? Privatizing our school system so parents with already stretched budgets can come up with tuition to send their kids to elementary school?

To quote Barack Obama, “ENOUGH!!”

Posted by: tcsned at September 17, 2008 11:50 AM
Comment #263182

walker

44% of the tax burden is already being paid by 1% of all earners. obamas’ plan would increase that #. at the same time it would redistribute income to those who pay no income tax at all. how in your estimation is this fair ? seems like more soak the rich politics by the left, while decreasing the tax base as a whole even further. this situation cries out for a flat tax in my estimation. now that would be fair.

Posted by: dbs at September 17, 2008 1:08 PM
Comment #263184

What if Bush had succeeded in putting social security into the stock market?… We would never have been able to dig ourselves out of that hole.

It seems to me that the recent financial crisis is an example of “trickle up” economics. Lower and middle class people do not have the money to own homes except through loans they cannot pay. As a result, big business took on risks that in aggregate they couldn’t cover.

It seems to me that it really isn’t all that smart or safe for America to keep all of its wealth at the top. The Obama tax chart shown above seems much smarter to me. A correction for a plan that was out of whack.

Posted by: Max at September 17, 2008 1:17 PM
Comment #263185

dbs

44% of the tax burden is already being paid by 1% of all earners. obamas’ plan would increase that #. at the same time it would redistribute income to those who pay no income tax at all. how in your estimation is this fair ? seems like more soak the rich politics by the left, while decreasing the tax base as a whole even further. this situation cries out for a flat tax in my estimation. now that would be fair.
So after 28 years of trickle down dominated economic policies which have shifted the tax burden [proportionally to one’s own income] to the middle class, while breeding a corporate culture widening the disparity between a corporations top earners and their bottom earners to such an extent that the top earners are paying an even greater share of the total taxes, you’re telling me that the problem is that the wealthy’s share of the taxes is too great!

That’s just funny. And pathetic.

Even many of the wealthiest Americans such as Warren Buffet and William Gates Sr are decrying the unfairness of the current tax structure to the middle and lower classes.

No the problem is the fundamentally unjust disparity in wealth which has been returning toward levels not known since the robber barons, prior to the rise of the American labor movement. The correction for that disparity IS NOT by redistribution through taxation, but rather through public insistence that corporations correct the gross disparity in their compensation packages, and also more laws to protect the rights of workers to collective bargaining.

But in the meantime we have a country to run that relies on taxes to implement its programs, whether they are for the public good, or to satisfy the whims of some crazy neocons. There are more than a few of us saying YES, it IS FAIR that those earning more than half a million dollars annually be called upon to bear a greater portion of the burden, when some of the corporations that some of them run refuse to pay a living wage to full time workers.

It’s not me waging the class war - it’s the corporate greed heads. And that is NOT every corporation, just far too many of them.

Posted by: Walker Willingham Jr at September 17, 2008 1:34 PM
Comment #263188

walker

“There are more than a few of us saying YES, it IS FAIR that those earning more than half a million dollars annually be called upon to bear a greater portion of the burden,”

they already do. whether it be a flat tax, or a progressive system which we already have. they are paying a larger share than those earning less. those at the bottom pay nothing at all. in fact those at the bottom end up getting money in the form of refunds which are nothing more than socialist wealth redistribution.

whats pathetic is that you and those like you feel you have the right to reach into the pockets of others to right some percieved wrong. i say reach into your own pocket first.

corporations pay the type compensation they do in order to keep high quality top executives, you know the ones that make the decisions that can make or break a company. with out them no one has a job. companies succeed or fail based on these people. it’s much easier to find labor, and lower level employees then to find qualified managers, and top executives.

as far as buffet, and gates, they earned thier money, and have the right to do with it as they please. what they do not have the right to do is tell others what to do with what they’ve earned, and niether do you for that matter.

Posted by: dbs at September 17, 2008 2:23 PM
Comment #263191

dbs,
You’re arguing against a progressive tax code. The flaw in the argument is the assumption that everyone has an equal opportunity, that everyone benefits equally, that everyone has an equal stake in keeping things the same, and that a flat level of taxation impacts every person to the same degree.

These are false assumptions.

Posted by: phx8 at September 17, 2008 2:41 PM
Comment #263192

Give it up Dbs. Using govt to steal from one and give to another is nothing but a vote buying feel-good solution and there is no way the left will ever be fair or Constitutional about it.
It’s not about whats fair for all, its about whats fair for the larger voting bloc. Change positions on the issues, make promises you can’t keep and feed the sheep lies and you will win. That is why Obama will be our next President

“as far as buffet, and gates, they earned thier money, and have the right to do with it as they please”

To bad they don’t use it to practice what they preach, that may actually do something. Instead they sit in their multi-million dollar homes waiting for their chefs to prepare dinner and complain how nobody cares about the homeless and poor.

Posted by: kctim at September 17, 2008 2:49 PM
Comment #263193

dbs

as far as buffet, and gates, they earned thier (sic) money, and have the right to do with it as they please. what they do not have the right to do is tell others what to do with what they’ve earned, and niether (sic) do you for that matter.
All that Warren Buffett did was to point out that he paid a lower percentage of his income in taxes than his secretary:
“The 400 of us [here] pay a lower part of our income in taxes than our receptionists do, or our cleaning ladies, for that matter. If you’re in the luckiest 1 per cent of humanity, you owe it to the rest of humanity to think about the other 99 per cent.”

Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent. Mr Buffett told his audience that US government policy had accentuated a disparity of wealth that hurt the economy by stifling opportunity and motivation.

Gosh, I guess Mr Buffett has no right to make his comments, because adjusting tax policy to a progressive structure is telling people what to do with their money. Why that’s … that’s … socialism! Gasp!

You suggest a flat tax - and the irony is that a true flat tax, if it replaced all other taxation would be less regressive than the current structure where FICA taxes are capped, and capital gains earned in much greater proportions by the wealthiest Americans are taxed at a lower percentage. The problem is the lack of will to change all the huge numbers of structures that lead to the current labyrinthine tax code. The best we can really expect is piecemeal adjustments.

Obama’s plan reduces the extent of the lower rate on capital gains. I would say stop special casing capital gains altogether. That is a step which moves in the direction of a flat tax! But your conservative colleagues argue that it squelches investment. Bah! Who’s investing now?

Shout “wealth redistribution” all you want to - what we have in place now is reverse wealth redistribution. Sorry dbs, but the facts are on my side here.

Posted by: Walker Willingham Jr at September 17, 2008 2:52 PM
Comment #263194

We taxpayers have just taken ownership of an insurance company that was failing by way of a loan that is backed by collateral who’s worth is questionable at best. I heard some speculation an hour or so ago that AIG has about a 50/50 shot of survival at this point. Much of that collateral is insurance bonds purchased by mortgage brokers to cover potentially failed mortgage loans. Since AIG is approaching insolvency I think it is save to say that those insurance policies as collateral are worth diddly squat. I am not sure how I feel about using more of my share of borrowed money to bail out another financial giant that has been irresponsibly managed and knowingly took unnecessarily high calculated risks. What happens if AIG still ends up going under. It seems to me that the fear of all that trickle down effect will still loom over our heads. Plus we the taxpayers will now be out 85 billion minus positive assets, which may not be squat. The fed is gambling with our money in efforts to forestall a gigantic slide which is largely the result of their incompetence in overseeing and manipulating the markets.

It is imo time to place blame and hold those who allowed this to come to fruition accountable. Once again the buck stops at the top. It is apparent that the good ‘ol boy network takes care of their own better than they do the American people. I would suggest that voters take a close look at just how tied to that network McCain is and take that into consideration when going to the booth in November. I for one will be voting against those who would allow the capitalist asses to walk freely and without accountability over my life. I also am wondering when I can expect my first dividend check from USAIG.

Posted by: RickIL at September 17, 2008 2:57 PM
Comment #263195

walker

“All that Warren Buffett did was to point out that he paid a lower percentage of his income in taxes than his secretary:”

that would be most likely because he earns the majority of his money through capital gains. keep in mind this is money he has already earned, and already paid income tax on. this is money he is re investing, it’s already been taxed once at a higher rate.

phx8

“The flaw in the argument is the assumption that everyone has an equal opportunity, that everyone benefits equally,”

i never assumed this, you only assume that i do. every one is different, born with different levels of ability, and potential. to think that you can some how change this by redistributing wealth is absurd. i help others when i can, but the bottom line is life is not fair. each of us has to do the best we can with the tools we are givin. we all rise to the level of our potential, and the amount of effort we put in to overcome our own obsticles. to think you can change that through legislation, and taxation is crazy.

Posted by: dbs at September 17, 2008 3:07 PM
Comment #263196

The trick here is that the rich have far more money to spend out of. It doesn’t justify confiscating all that money, but placing a heavier tax burden on those who are richer is more fair than a flat or regressive system.

Besides, if the poor and middle Class pay less money, they have more money to pay the rich! This is the thing: for all the extra burden that might be placed on somebody for being rich, there are extra rewards. More money circulates out of their hands, but more money will circulate back into their hands.

The static picture of the economy imagines a zero-sum game of cutting up a pie, where one person’s piece comes at somebody else’s expense. This picture is more appropriate when the upper class take most of the gains from productivity, because money tends to lay around more in their hands.

Money in the hands of the Middle Class comes and goes, and eventually comes back to the hands of the rich. It does something more than fund capital expenditures, which are useless without the consumer base which that capital is used to produce goods and services for.

There’s too much emphasis on one side of the equation, not enough on the other. The economy is too top heavy, and too much is done to try and make it function despite the degradation of the conditions for the middle class and poor, rather than through their good fortune.

An economy represents more than the mere juggling of numbers.

Posted by: Stephen Daugherty at September 17, 2008 3:19 PM
Comment #263197

“we all rise to the level of our potential, and the amount of effort we put in to overcome our own obsticles”

Very true dbs, but personal responsibility is not something everybody believes in. Why put any amount of effort into anything when you can vote in people who will use govt to do things for you? Why use your own money to help others you “say” you care about, when you can use govt to force others to do it for you?

There is no room for fairness when promoting class-warfare.

Posted by: kctim at September 17, 2008 3:20 PM
Comment #263198
44% of the tax burden is already being paid by 1% of all earners.

dbs, what percentage of the tax burden do you think they should bear? 1%? Isn’t that the implication of comparing these numbers? Of course, 44% is a lot more than 1%, but is it comparable?

Not at all.

The main problem is that the top 1% of earners make a whole lot more than 1% of the income. According to the IRS, in 2002 the top 1% paid 33% of the the taxes on 17% of the income. While that’s not even, it’s a heck of a lot better than the 1% craziness (perhaps your 44% number is valid for a more recent year - where’d you get it). And the top 5% paid 53% of the taxes on 32% of the income.

So, if you’re really concerned that the wealthy pay too much taxes, the main source of the disparity is that they earn so much more than average, not that they are taxed so much more than average. Are you suggesting that they should be paid less?

at the same time it would redistribute income to those who pay no income tax at all.

The interesting thing is that this just isn’t true. The GOP would have us believe that trickle-down works by having more money that they wealthy can trickle down to the rest of us, and that more money trickles down in a Republican administration than in a Democratic administration. However, reality has been different. During Democratic administrations, all brackets of the economy do better than they do in Republican administrations, even the wealthiest 5%. However, when Democrats are in the White House, the improvement the poor gain is bigger than the improvement the rich gain.

So, essentially, Democratic government distributes more wealth to everyone. It doesn’t penalize the rich - it just means that the rich aren’t advantaged at everyone else’s disadvantage.

Isn’t that a good thing?

Posted by: LawnBoy at September 17, 2008 3:23 PM
Comment #263199
There is no room for fairness when promoting class-warfare.

That’s true. It’s too bad that the GOP engages in class warfare when attacking a system that benefits all brackets of the economy simply because they prefer a system in which the poor do not benefit as much as they do. GOP administrations historically help only the rich, while Democratic administrations help all (and at all levels more than the GOP does).

Why does the GOP engage in a self-defeating class warfare to deprive everyone of better benefits just to reduce everyone else’s more?

Posted by: LawnBoy at September 17, 2008 3:27 PM
Comment #263203

dbs

keep in mind this is money he has already earned, and already paid income tax on. this is money he is re investing, it’s already been taxed once at a higher rate.
That’s factually untrue - at least for me. If I earn X dollars at my job, and then invest X in some security, later selling it when it is worth X+Y, I pay taxes for the tax year that I sell it on Y, the amount of the gain, not on X again. Why should Y be taxed at a lower rate than X? It’s all income to me. Y was never my money until I sold the stock. I never paid taxes on it before.

LawnBoy-
Thanks for pulling out those numbers. It’s exhausting enough to beat off the illogic of these arguments without having to research every numerical claim that gets thrown one’s way.

At least now that he understands it, dbs will be on board with repealing the lower tax rate for capital gains, since that makes it closer to a flat tax. Oh wait, if he concedes that he’ll be for increasing the taxes on the investor class even more than Obama.

Posted by: Walker Willingham at September 17, 2008 3:48 PM
Comment #263204
GOP administrations historically help only the rich, while Democratic administrations help all (and at all levels more than the GOP does).

I’m not a republican and I can even see through that garbage…

Tell me, how do the people fare when the congress (who spends the money) and the president (who can only ok the spending of the money) were both democrats, lawnboy?

You know, like when Jimmy Carter was president? Or the first two years of Clinton?

And do not compare against Bush and his congress, they were completely irresponsible, even republicans (like Mccain) have complained about the spending of this administration. Go back to a time when republicans ran both and compare to that.

Posted by: Rhinehold at September 17, 2008 3:49 PM
Comment #263206

BTW, Walker, don’t forget that the plan does not help 95% of everyone, only those working. Retirees get whacked pretty good by Obama… Funny how you leave that out…

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

Posted by: Rhinehold at September 17, 2008 3:51 PM
Comment #263207

lawnboy

sorry, it’s more like 40%. those were from an older chart. here’s the #s

http://www.ntu.org/main/page.php?PageID=6

fair would be to have a flat rate with those below the poverty level exempt. that IMHO would be fair. that way your tax level would be directly proportional to your income level. if you make 100k, and the other guy makes 10k, your tax burden would be exactly 10 times his. BTW i use these #s as an example, for comparison. in reality the guy making 10k would be exempt.

Posted by: dbs at September 17, 2008 3:57 PM
Comment #263210

Well, kctim & dbs, get back to me in a few months on the topic of the distribution of wealth. The DJIA just dropped another 450 points today. That’s 950 points in two days, with only limited intraday rallies. Roll around the phrase ‘catastrophic collapse of the financial system’ on your tongues and see how a deregulated, free market tastes. Repealing the Glass Steagall Act, combined with another bill by Phil Gramm removing regulations preventing predatory mortgage practices, and voila! We’re staring at a depression. Not recession. Depression.

Posted by: phx8 at September 17, 2008 4:10 PM
Comment #263211

kctim

“There is no room for fairness when promoting class-warfare”

AMEN ! i guess it’s all a matter of who you want to be fair. i would prefer to be fair to everyone, not just those whos votes i’m angling for.

Posted by: dbs at September 17, 2008 4:14 PM
Comment #263213

Wow, and the liberals complain that the right uses fear for political reasons?

I wonder sometimes if people really believe the chicken-little things that they say.

This economy has been bankrupt for decades, thanks to deficit spending by both parties. We are now seeing a contraction in the market as a result of a couple of things that need to happen. It isn’t fun, it isn’t painless, but it was propped up from happening slowly by governmental mistakes by both parties…

But ‘starting at a depression’? Get real…

Posted by: Rhinehold at September 17, 2008 4:20 PM
Comment #263214

dbs,

Notice that the source of your numbers shows only taxes and not income? That’s why I went with 2002, because it’s actually a valid comparison.

You still don’t know what percentage of the taxes you think the top 1% should pay, but you complain about the amount they do pay. How do you know if the amount they do pay is too much if you don’t know what would be good?

It makes no sense.

Posted by: LawnBoy at September 17, 2008 4:22 PM
Comment #263216

lawnboy

why not just throw the #s out, if you have them ? it would be a whole lot more productive then snide remarks.

Posted by: dbs at September 17, 2008 4:27 PM
Comment #263218

lawnboy

BTW, just for argument sake lets say the top 1% earns 80% of the pie. with a flat tax what they paid in taxes would be directly proportional to thier slice of the pie. after all 10% of 80% of that pie would be substantially more than 10% of 20% of the same pie. how is that unfair.

Posted by: dbs at September 17, 2008 4:34 PM
Comment #263219

dbs,

As I said, I gave you the latest numbers I have.

Posted by: LawnBoy at September 17, 2008 4:34 PM
Comment #263220

Rhinehold,
No private companies were willing to work with AIG. It must have been really bad. The shares of the last two investment banks standing, JP Morgan and Goldman Sachs, fell sharply. As the impact of the AIG bailout sinks in, the credit markets will freeze. No one will extend credit because they are afraid of what is being hidden.

The other shoe will fall, probably soon, with bank failures. WaMu and Wachovia are prime suspects, and even one of those two will burn up the reserves of the FDIC, which will force the Fed to intervene again.

It’s getting worse, Rhinehold, not better. I don’t want to experience a depression. I really, really don’t. I’m trying to be realistic. That’s where we are heading, and the process of falling is accelerating.

Posted by: phx8 at September 17, 2008 4:34 PM
Comment #263221

“simply because they prefer a system in which the poor do not benefit as much as they do”

And why do they prefer that system LB? Because they believe individual rights and freedoms are more important than money.
When it comes to our rights and freedoms, the more you have, the more you benefit.

Nice spin on class warfare though.
Telling people you will take from the rich and give it to them because they are entitled to it, isn’t class warfare is it. No, in left world, telling people they are responsible for their own lives is class warfare.

No wonder the left keeps running liberals even though they keep losing, you guys just don’t get it. Not everybody believes entitlements are more important than rights.

Posted by: kctim at September 17, 2008 4:38 PM
Comment #263222

dbs,

The unfairness comes in that people at different brackets have significantly different needs. Paying for the basics of food, housing, clothing, etc. take a much larger percentage of the income of the poor than of the rich. If everyone is taxed at the same percentage, then money the poor use for taxes might come out of what they might spend for food and housing, while the money the rich use for taxes comes out of discretionary income.

Is it fair to say that some people in society should have to go without necessities so that others can have their luxuries?

This is a fundamentally different definition of fairness than what you use.

Posted by: LawnBoy at September 17, 2008 4:40 PM
Comment #263226
Because they believe individual rights and freedoms are more important than money.

And you say I’m the one spinning? Please.

I’m looking at real-world results. The incomes of all brackets have improved more in Democratic administrations than they have in Republican administrations over the past half-century. If the choice is between improving the rich much and barely anyone else or improving all groups well (including the rich even more), how is it class warfare to choose the second option? Wouldn’t that label be more appropriate for the group that would rather sacrifice a bit of its gain than let everyone benefit?

No, in left world, telling people they are responsible for their own lives is class warfare.

Ahh… the straw man. Have fun with that.

Posted by: LawnBoy at September 17, 2008 4:47 PM
Comment #263228

The top tax bracket in 1945 was 94%. In 1965 it went down to 70%. In 1982 it was down to 50%. In 1992 when Clinton took office it was 31%, but he raised it to 39.6%. The economy took off in the late 90’s. Then Bush lowered it to 35%. All Obama is talking about is raising it back up to 39.6%. These numbers are from http://en.wikipedia.org/wiki/Income_tax_in_the_United_States#Tax_rates_in_history But of course that doesn’t tell the whole story, because now a days rich people make most of their money without work. So they only pay 17% I think.

Posted by: Mike the Cynic at September 17, 2008 4:49 PM
Comment #263230

Phx8
“Roll around the phrase ‘catastrophic collapse of the financial system’ on your tongues and see how a deregulated, free market tastes”

Well, I happen to be prepared for hardships. No sense in sitting around waiting for govt when I know a devastating storm is headed my way.

Ok, I rolled it around some and it tastes like crap. Not because I fear it like you do though, but because I know it will just give President Obama more reasons to speed up the taking away of even more of our rights and freedoms.
Thank god I saw that disaster coming and took precautions.

Posted by: kctim at September 17, 2008 4:53 PM
Comment #263232

lawnboy

i think i said people at the poverty level would be exempt. was that unfair ?

“Is it fair to say that some people in society should have to go without necessities so that others can have their luxuries?”

if it is due to thier own poor choices, yes. who are you to decide what luxuries someone should be able to keep, when they’ve earned the money to pay for them ? you seem to think you have some devine right to take what is not yours to take, because you believe you have the moral authority. think again.

Posted by: dbs at September 17, 2008 4:56 PM
Comment #263233

You will notice the time line for those increases are directly connected to the need for campaign money for adds. We need an amendment to the constitution to make all campaign ads illegal.

Posted by: Mike the Cynic at September 17, 2008 4:58 PM
Comment #263234
i think i said people at the poverty level would be exempt. was that unfair ?

That makes it a lot more fair. However, it means that no number I could give you would answer the question of what level of taxation for the top 1% would be fair. It’s not just the same as their percentage of the income - it’s a greater amount because they’re covering for what the poorest aren’t paying.

And how do you know that it would be materially different than what they are paying now?

who are you to decide what luxuries someone should be able to keep, when they’ve earned the money to pay for them ? you seem to think you have some devine right to take what is not yours to take, because you believe you have the moral authority. think again.

I’ve never claimed that right or that authority. I’m not telling anyone what choices to make when spending discretionary income.

However, I am expressing my opinion that a system that tells some people to sacrifice necessities so that other people are not spared choosing between luxuries is inherently an unfair system.

Posted by: LawnBoy at September 17, 2008 5:04 PM
Comment #263237

lawnboy

“However, I am expressing my opinion that a system that tells some people to sacrifice necessities so that other people are not spared choosing between luxuries is inherently an unfair system.”

it would be if one person had a right to the fruits of anothers labor, but they don’t, and that is where we differ.

Posted by: dbs at September 17, 2008 5:16 PM
Comment #263239

LB
You look at your real world results and I look at what it takes to get those results. You say the “incomes of all brackets have improved more in Democratic administrations?” So what? Even if it is true, some Americans are paying more than others and that is what is unfair.
You call “strawman” when personal responsibility is brought up, but it is a major factor for many.

Anyway, Walkers snow job is about us being entitled to what the “rich” have and how great about Obama is, not about individual rights. Sure can’t speak of those and Obama together.
I got off topic, sorry about that.

Posted by: kctim at September 17, 2008 5:23 PM
Comment #263240

dbs,

So, are you saying that the person choosing between luxuries is claiming right to the fruits of the labor of the person struggling to pay for necessities? Or the other way around?

Actually, I know what your answer would be, but it’s just rhetoric independent of what we’re talking about.

We’re debating how to share the burden for supporting the government that makes our society work. In neither your approach nor mine is one hypothetical taxpayer claiming right to the “fruits of anothers labor”. In each case, each taxpayer is contributing a portion of his own fruits, and we’re trying to figure out where the line should be.

Using rhetoric of theft when an alternative is proposed is much less useful to the debate than any snideness you thought I was trying to use earlier.

Posted by: LawnBoy at September 17, 2008 5:26 PM
Comment #263242

kctim,

My view of the real-world results is in response to those who claim that the left is engaged in class warfare to destroy the rich. It’s simply not true. History shows that the rich have done very well under Democratic administrations, even better than they have done under Republican administrations. I’m trying to counter the notion that we’re against a group that have benefited when we’ve had control of the White House.

Of course, I acknowledge that this one set of numbers doesn’t prove everything. It’s possible that Democrats just happen to be in office when things are good and that Republicans have just been in office during the unlucky years. Or that the occupant of the White House is irrelevant compared to the party that controls Congress, or that the important factor is which league wins the World Series. This one bit of information is too simplistic and lacks controls necessary to say that the correlation necessarily implies the causation.

However, it makes it very hard for anyone to make the argument with a straight face that the Democrats are the ones who engage in class warfare, and further that the warfare is directed towards the rich.

If you really don’t think that bringing up personal responsibility was a straw man when I hadn’t been discussing it, then what is the connection you see between the design of the tax structure and personal responsibility? I just don’t see that a flat tax encourages personal responsibility more than a progressive tax does.

Posted by: LawnBoy at September 17, 2008 5:35 PM
Comment #263244

lawnboy

what you earn is yours. what i earn is mine. that is a simple concept. we can debate about sharing the burdon of suppoting the gov’t, but we then have to also debate how far the gov’ts power, and responsibility for each individual should go. my guess is that would be a whole new can of worms. i won’t even get into the subject of gov’t waste. bringing that into the light might show there is actually no revenue problem to begin with.

Posted by: dbs at September 17, 2008 5:45 PM
Comment #263247

LB
The left tells people that the rich have too much and that the people are entitled to it. That is pitting class against class and is class warfare. IMO.

Our current tax structure takes from one and gives to another. It is every Americans right to live their life as they choose and the results are their personal responsibility. Not govts. People who shuck this, have grown dependent on govt to bail them out, or outright support them, and that is wrong and unfair to the rest.
Our progressive tax encourages dependency and discourages personal responsibility.

Posted by: kctim at September 17, 2008 5:59 PM
Comment #263249
The left tells people that the rich have too much and that the people are entitled to it.

Perhaps that’s how you hear it, but that’s not how I think of it. I think of it as I discussed above - government and society need to be supported, and the burden should be shared fairly. I don’t define taking lunch money from one person so that another person can have both desserts to be an example of fairness.

Posted by: LawnBoy at September 17, 2008 6:14 PM
Comment #263254

What I don’t get is why McCain isn’t being given credit for foreseeing all of this and trying to put through the reforms that might have stopped it.

The mortgage crisis is at the root of all this, and McCain strongly supported the Federal Housing Regulatory Act Of 2005 which was blocked by Democrats.

I’m surprised we don’t hear more about how a director of Fannie Mae who made off with millions of dollars herself after a short tenure was heading Obama’s VP search and how Obama himself got the second most amount of money from Fannie Mae of all Democratic senators.

Are people even aware of these things? Why does nobody talk about it?

Posted by: Liam at September 17, 2008 8:29 PM
Comment #263260

Good post Walker. I see the Capitalists are doing what they do best: Make excuses, blame someone else and avoid taking responsibility.

Posted by: Mike Wrona at September 17, 2008 9:26 PM
Comment #263261

dbs-

You don’t even know what capital gains taxes are. Capital gains is a tax on earnings.

you wrote that would be most likely because he earns the majority of his money through capital gains. keep in mind this is money he has already earned, and already paid income tax on. this is money he is re investing, it’s already been taxed once at a higher rate

No it is not money a person has already earned and already paid taxes on.

A person earns $1, pays $.33 in taxes, keeps $.67.

He then Invests $.67. Over time it becomes $1.20. His capital gain is the difference between what he invested and its current monetary value. You don’t pay taxes on $1.20. Your “Earnings” are $.53

Posted by: Mike Wrona at September 17, 2008 9:33 PM
Comment #263263

Most prosperous people don’t object to paying higher tax rates on their income. The issue on capital gains is that the tax rate can determine whether or not it is worthwhile to have the investment at all.

Posted by: ohrealy at September 17, 2008 9:46 PM
Comment #263264

Well, Liam, McCain also has gotten a bunch of money from Fannie Mae, so that doesn’t help him much. There’s also the problem that a lot of people are pointing to the 1999 Gramm-Leach-Bliley Act that repealed New Deal-era securities regulations. And since Gramm is McCain’s main economic adviser, McCain doesn’t want the argument you’re trying to push.

Posted by: LawnBoy at September 17, 2008 9:49 PM
Comment #263271

Liam,
No one is talking about Fannie Mae and Freddie Mac and their possible mismangement or fraud or whatever, because they are not central to the subprime crisis. I’m sure there are plenty of criticisms to level at those agencies, but the criticisms are irrelevant. Neither organization caused the subprime disaster.

It was the repackaginging and reselling of mortgages and their derivatives that turned a real estate downturn into a full blown catastrophe. Blame Phil Gramm for the legislation which permitted that. Phil Gramm also takes some blame for legislation removing bars against predatory mortgage practices. The combination of predatory mortgage practices with lack of regulatory separation among financial sectors(Glass Steagall was repealed by a bill that was sponsored by Gramm), a failure of adequate oversight by credit agencies, and the creation of various mortgage derivatives (guess whose finger are all over that one? Yep, Gramm again!), these are the factors which created the subprime debacle.

So, let me get this straight. McCain (a co-sponsor, NOT the sponsor) wanted to pass the bill in 2005, in a Congress controlled by the GOP, and Democrats prevented him? That doesn’t make sense. If this had been important to the GOP, they would have made it happen.

It seems Morgan Stanley is about to go, in a merger with Wachovia and possibly others. WaMu looks like it will go soon, too.

McCain, ‘the deregulator,’ has always favored free markets without government oversight. That is why Phil Gramm was his campaign’s economic guru.

Posted by: phx8 at September 17, 2008 11:23 PM
Comment #263276

Lawnboy, I’m not familiar with the Gramm-Leach-Bliley Act, but if there were problems with it, then McCain was clearly trying to adress those problems by pushing for a different version with better regulations in 2005.

Obama got five times as much from Fannie Mae in his two years as a senator than McCain got over decades. There’s also the fact that Fannie Mae officials themselves are part of Obama’s campaign. One even ran his VP search. A guy who got millions of dollars personally running the badly managed company that was behind the whole mortgage meltdown. It’s silly for Obama to be blaming McCain for all of this when Obama is right smack in bed with the people who caused the problem.

Posted by: Liam at September 17, 2008 11:49 PM
Comment #263278

Lawnboy, I’m not familiar with the Gramm-Leach-Bliley Act, but if there were problems with it, then McCain was clearly trying to adress those problems by pushing for a different version with better regulations in 2005.

Obama got five times as much from Fannie Mae in his two years as a senator than McCain got over decades. There’s also the fact that Fannie Mae officials themselves are part of Obama’s campaign. One even ran his VP search. A guy who got millions of dollars personally running the badly managed company that was behind the whole mortgage meltdown. It’s silly for Obama to be blaming McCain for all of this when Obama is right smack in bed with the people who caused the problem.

Posted by: Liam at September 17, 2008 11:56 PM
Comment #263280
I’m not familiar with the Gramm-Leach-Bliley Act, but if there were problems with it, then McCain was clearly trying to adress those problems by pushing for a different version with better regulations in 2005.

That’s really funny. “Errr…. I don’t know what I’m talking about, but my guy still ruuuules!!!!!!”

No, the Federal Housing Enterprise Regulatory Reform Act of 2005 was not introduced to address the problems with the earlier bill. The difference is that Gramm’s bill was about the banking and financial system, and the 2005 bill was about housing regulation. Although there’s some overlap, they are different things. Perhaps the 2005 bill could have averted the problems with Freddie and Fannie, but it wouldn’t have solved the problems created by McCain’s economic adviser, problems that destroyed Bear Sterns and Lehman Brothers and Merrill Lynch.

You did make me laugh, though, with your strident defense of that which you admit you know nothing about. Quite funny.

Posted by: LawnBoy at September 18, 2008 12:10 AM
Comment #263284

Liam,

The value of the entire U.S. Treasuries market: $4.5 trillion.

The value of the entire mortgage market: $7 trillion.

The size of the U.S. stock market: $22 trillion.

The size of the credit default swap market last year: $45 trillion.

So far, the federal government is on the hook for $900 billion in bailout costs… With more to come…

Please. Get it straight.
FNMA was not behind the meltdown. They were not the source of the problem. FNMA did not create a $45 trillion credit default swap market. That market was made possible by Phil Gramm.

The problem was that mortgages of low investment quality- subprime mortgages- were sold. By itself, that was bad, but not necessarily disastrous. However, when various financial companies resold the mortgages, they were sold as high quality investments, and insurers treated them that way too. The mortgages were packaged and repackaged in the credit default swap market, which meant huge fees for financial firms. The idea of the credit default markets was to spread the risk.

When real estate markets declined, the effect of foreclosures became magnified far beyond what should ever have been possible because of the credit default swap markets. Without the restrictions of the Glass Steagall Act, which created firewalls between various financial sectors, the failures spread across the spectrum, in sums which are truly frightening.

If one person could be said to be responsible for the subprime crisis, it is Phil Gramm. He virtually created the credit default swap markets. He sponsored the repeal of the Glass Steagall Act. He played a crucial role in some of the other critical pieces of legislation that made all this possible.

There are a lot of lemmings responsible for the subprime crisis. Phil Gramm is the guy who removed the fence from the edge of the cliff.


Posted by: phx8 at September 18, 2008 1:06 AM
Comment #263287

Tax structure in a country s the backbone for the welfare of the people. Definitely different government has different policy based on their party philosophy.But the basic which I feel should be the intention and sincerity to serve the masses It depends vastly on the sincerity and obligation of an individual, how far he is sincere on tax paying.

The whole financial structure of the country at this moment is in trouble due to wrong policy and implication of certain individual and group who gave birth to self interested individual and corporate to ruin the equal distribution of wealth of the country. So a change is the need of the hour.

Thanks.
http://www.statedemocracy.org

Posted by: dennis moore at September 18, 2008 2:33 AM
Comment #263298

mike

“You don’t even know what capital gains taxes are. Capital gains is a tax on earnings.”

no mike, i know what capital gains taxes are. you completely missed my point. income earned through ones labor are taxed at different rate, than income earned on investments. if you want to argue the capital gains tax should be higher then do so, othewise save the arrogance for someone else.

Posted by: dbs at September 18, 2008 8:05 AM
Comment #263303

LB
“I don’t define taking lunch money from one person so that another person can have both desserts to be an example of fairness”

And forcefully taking those desserts and giving them to someone who has no lunch money, isn’t fair either LB.

I believe both examples are wrong, you don’t.
Just a difference of beliefs LB.

Posted by: kctim at September 18, 2008 10:06 AM
Comment #263305

phx8

There are a lot of lemmings responsible for the subprime crisis. Phil Gramm is the guy who removed the fence from the edge of the cliff.

I have heard probably a dozen or more different analysts attempt to explain away this crisis since this time yesterday. I have heard a dozen different views and opinions. Out of all those who dug deeply into the root cause, Phil Graham’s name always pops up. I am nothing more than a novice where money matters are concerned. I however am rapidly becoming more acutely aware that the management of our financial system is out of control with no overseer who knows or is capable of seeing all the complexities that exist within its sub structure. It has gotten too big, too confusing and too out of control for a few people to think they can micro manage it. Near as I can figure off the top of my head our fed has infused close to a trillion dollars in taxpayer money since Bear Stearns in efforts to bring pause to the downfall of an economy out of control.

This for me brings into question just how apt is this organization they call the fed at doing its job. How can one person be given so much free reign with regard to so much of our money. We are putting our trust in a person appointed to an organization by a buffoon president to determine how our money should be managed. GW was just on TV assuring us that he is staying in Washington to watch over things. Thanks for that reassuring notion George. I think one very clear and obvious thought comes to the forefront out of all of this. Oversight, regulation and possibly a restructuring of the system is in order. It is clear that our current system is not adequate and can not be trusted to do what is best for us and the world.

Posted by: RickIL at September 18, 2008 10:23 AM
Comment #263309

Excellent article Walker.
Why are the repubs and conservatives distancing themselves from one of their fundamental beliefs now that it has proven to be such a disaster? Deregulation has been a goal of the conservatives since Reagan was president. Deregulation has been a ralling cry for conservatives as the fix for most economic problems. Just a few days ago Palin was telling the faithful that “government needs to get out of the way” so the economy can be strong. Why now such denial of deregulation? Can we now get agreement that deregulation and the Phil Graham followers need to be thrown out of leadership positions having been so discredited.


This goes against another fundamental conservative belief of taking responsibility for one actions. What has happened here is directly attribitable to McCains economic adviser and close personal friend and mentor Phil Gramm and his hordes of conservative followers. What has happened to cause conservatives to run from core beliefs (like deregulation) like a scalded dog when the beliefs have been proven not to work. What has happened to accepting responsibility for one actions? Has power so corrupted the conservatives/republicans that they must now deny their core beliefs in an attempt to continue to hold power despite having been in such great error on the economic policies they once held so dear? Is their still no room for compromise and providing workable solutions to the countries economic problems? IMHO conservatives and republicans need to demand that their leaders in the white house and congress come to the table heads bowed in apology and make a sincere and honest effort to accept responsibility for their actions and to rectify the matters so important to this country. It’s time tp stop drinking the idelogical kool aid guys and realize the harm caused by your movement’s core beliefs the past 3 decades and work to do right by this country.

Posted by: j2t2 at September 18, 2008 10:49 AM
Comment #263310

Oversight by whom, RickIL? Isn’t the SEC a government entity? Didn’t they just sit by and let it happen? What, exactly, is going to change under either administration that will prevent this from happening again that doesn’t take away an individual’s right to interact in commerce as they decide is best for them?

Or, do we just give up that right and let the government control it all?

Posted by: Rhinehold at September 18, 2008 10:50 AM
Comment #263312

“that doesn’t take away an individual’s right to interact in commerce as they decide is best for them?”

With rights come responsibilities Rhinehold. Seems you want this country held to the tyranny of the individual.

“Laws made by common consent must not be
trampled on by individuals.”
Thomas Jefferson

Posted by: j2t2 at September 18, 2008 11:03 AM
Comment #263315

j2t2,

What a remarkably ignorant statement…

I want individual rights respected, you seem to think that equates to ‘tyranny of the individual’.

Of course that is pretty common for someone who thinks that society should control the individual, or we should exist that the needs of the few outweigh the needs of the one…

It all sounds good until someone comes after what YOU have or want to do with your own body, then go running off to the ACLU…

Some of us understand that we should be concerned with everyone’s individual rights, not just our own.

It’s a concept the modern Democratic party has long since abandoned for its progressive future.

Posted by: Rhinehold at September 18, 2008 11:15 AM
Comment #263316

BTW, j2t2, for an example…

Let’s say the ‘common consent’ is that we are to make Christianity the national religion and all should be in church on Sunday at 10:00am.

Is standing up to that for individual rights ‘tyranny of the individual’?

PLEASE do answer this and tell me how Jefferson’s quote (which you take out of context, btw) is violated here.

Posted by: Rhinehold at September 18, 2008 11:17 AM
Comment #263318

Rhinehold

Or, do we just give up that right and let the government control it all?

I am aware that everything for you boils down to how it will affect your individual rights. Well with individual rights also comes responsibility to the group. Why don’t I have the individual right to not be affected by irresponsible actions by a government agency? Deregulation has allowed factors to affect my individual situation, even though I am not an investor. What we are seeing here as I see it has been the ability of a group of people who answer to no one, to be allowed to use greed in such a way as it has become a detriment to those of us who have no say in the matter. I do not have specific answers as to what needs to be done. However it is all too obvious that there are problems from the top down. The little I know is that the fed was originally devised to oversee and prevent panic in the banking system. Would you say they have been successful? All I am suggesting is nothing more than many organizations which are failing go through from time to time, re-organization.

Posted by: RickIL at September 18, 2008 11:23 AM
Comment #263319

RickIL

“Why don’t I have the individual right to not be affected by irresponsible actions by a government agency?”

this question could be applied to either side of the argument. you pick the agency, and the party in control of the agency at that peticular time.

Posted by: dbs at September 18, 2008 11:34 AM
Comment #263321

dbs

this question could be applied to either side of the argument. you pick the agency, and the party in control of the agency at that peticular time.

Yes, that is the point I was trying to make. My point is just as valid as the other.

Posted by: RickIL at September 18, 2008 11:51 AM
Comment #263324

Like the old saying goes, there are no atheists in foxholes, and there are no libertarians in a depression. Just kidding, Rhinehold.

Liam,
Where did you get your information about FNMA? Someone is feeding you bad information about the nature of the subprime crisis. It sounds like that person was trying to deflect the blame by bringing up irrelevant side issues.

RickIL,
Obviously, I’m no expert on securities. I have more experience than most people, but that was in the 1980’s, and I wasn’t even following the markets in the 90’s. I’ve been reading up on the subprime crisis, because as difficult as this whole thing is to understand, it has a huge effect on all of us. A lot of factors contributed to this disaster- tax cuts, spending, deficits, national debt, wars fought on credit, artificially low interest rates to support a shaky, debt-fueled recovery, a conservative GOP philosophy- but you’re right; after all is said and done, the most basic cause was foolish deregulation, and the name that comes up again and again is Phil Gramm.

Posted by: phx8 at September 18, 2008 11:59 AM
Comment #263327

“What a remarkably ignorant statement…”
Not really Rhinehold especially in the light of current abuses by thos most loathsome of individuals the corporation. Since the days of defining corporations as a natural being the country has been subjected to a trampling of rights by the individual.

Rhinehold we all want individual rights respected but when the fair and just laws cannot be passed by the majority because the selfish individual deems it unwise then it is tyranny of the individual, or the libertarian/conservative way as the case may be. I think the individual should control themselves based upon their own virtue not by society at large, however we all have to live together and when your (in general) virtues are lacking then it is tyranny to expect that you (in general) should prevail over the wisdom of the many individuals.
With rights comes responsibilities to yourself(in general) and others not just yourself(in general).That is the real difference between a liberal and a libertarian isnt it?

Posted by: j2t2 at September 18, 2008 12:07 PM
Comment #263336

Bush Called For Reform In State of Union And Dems Ignored It.
From his State Of The Union Address in January 2008, “My administration brought together the HOPE NOW alliance, which is helping many struggling homeowners avoid foreclosure. And Congress can help even more. Tonight I ask you to pass legislation to reform Fannie Mae and Freddie Mac, modernize the Federal Housing Administration, and allow state housing agencies to issue tax-free bonds to help homeowners refinance their mortgages. These are difficult times for many American families, and by taking these steps, we can help more of them keep their homes.”

Posted by: Party Pooper at September 18, 2008 12:28 PM
Comment #263338

Bush Called For Fannie Freddie Reform Last December As Well
On December 20th 2007, while signing the Mortgage Forgiveness Debt Relief Act of 2007, George Bush said, “The Congress needs to pass legislation permitting state and local governments to issue tax-exempt bonds for refinancing existing home loans. Congress needs to pass legislation strengthening the independent regulator of government sponsored enterprises like Freddie Mac and Fannie Mae, so we can keep them focused on the mission to expand home ownership. Congress needs, as well, to complete work on responsible legislation modernizing the Federal Housing Administration, so that we can give the FHA the necessary flexibility to help hundreds of thousands of additional families qualify for prime-rate financing.’
Since then Democrats in Congress have scoffed at the need to strengthen independent regulation of those entities and now the crisis has hit home.

Posted by: More On Reform at September 18, 2008 12:30 PM
Comment #263341

dbs - you wrote way back up this thread:

keep in mind this is money he has already earned, and already paid income tax on. this is money he is re investing, it’s already been taxed once at a higher rate.

I replied:

That’s factually untrue - at least for me. If I earn X dollars at my job, and then invest X in some security, later selling it when it is worth X+Y, I pay taxes for the tax year that I sell it on Y, the amount of the gain, not on X again. Why should Y be taxed at a lower rate than X? It’s all income to me. Y was never my money until I sold the stock. I never paid taxes on it before.

You didn’t respond before Mike reiterated my point with:
No it is not money a person has already earned and already paid taxes on.
A person earns $1, pays $.33 in taxes, keeps $.67.
He then Invests $.67. Over time it becomes $1.20. His capital gain is the difference between what he invested and its current monetary value. You don’t pay taxes on $1.20. Your “Earnings” are $.53

Mike had prefaced his comment with the charge that “you don’t understand what capital gains taxes are”, and you took exception stating:
no mike, i know what capital gains taxes are. you completely missed my point. income earned through ones labor are taxed at different rate, than income earned on investments. if you want to argue the capital gains tax should be higher then do so, othewise save the arrogance for someone else.
Now you may or may not know what capital gains taxes are, but you are stating untruths regardless. You claim that Mike missed your point, but Mike and I both correctly pointed out the falseness of your earlier claim that the money had “already been taxed once at a higher rate.”

Wrong! Factually wrong.

Those gains HAD NOT BEEN TAXED AT ALL!

And now you who claim to favor a flat rate tax are crying foul because Obama would reduce the rate difference between taxes on income and taxes on capital gains for the wealthiest taxpayers.

There is ALREADY an existing progressive structure built into those rates depending on a person’s total income, but part of G W Bush’s huge tax break for the very wealthiest Americans was based on lowering the maximum rate at which capital gains could be taxed, when they already were taxed at a lower rate than income.

It’s all smoke and mirrors.

You could be a true flat rater, and I would respect that, even though I would disagree. But if you were a true flat rater then capital gains and income should be taxed at the same flat rate. And if there were still a FICA tax there would be no cap to the income at which it was taxed.

You make the claim that capital gains are money that was already taxed, and then when challenged you say that your “point” was that capital gains are taxed at a different rate. Yes they are taxed at a different rate - A LOWER ONE, but no they were NOT ever taxed before.

You are entitled to your opinions, but you are not entitled to a different set of facts than the rest of us.

Posted by: Walker Willingham at September 18, 2008 12:31 PM
Comment #263354

walker

actually i would prefer that income on the fruits of someones labor not be taxed at all by the federal gov’t. at one time only capital gains were considered income. the fica tax is another issue. being forced to pay large amounts of money into a forced gov’t pension program is wrong, so there should be a cap on it IMO. you can agree or disagree on whether cap gains should be taxed at the same rate as other income, or that there’d be no negative effect by taxing them at the same rate, but there different issues.

Posted by: dbs at September 18, 2008 12:53 PM
Comment #263358

walker

“You are entitled to your opinions, but you are not entitled to a different set of facts than the rest of us.”

maybe so, but i am also entitled to anything i’m willing to work for.

Posted by: dbs at September 18, 2008 1:00 PM
Comment #263359

Party Pooper and More on Reform,
See my comment earlier in the thread, #263284, explaining the sheer size of the credit default swap market. Mortgages coming up for refinancing steadily increased through 2007 and peaked in March, 2008. Reforming Fannie Mae, Freddie Mac, and FHA would have had no effect, first, because that was irrelevant to the causes of the subprime crisis, and second, by the time any legislation of ANY kind had been passed, it would have been far too late.

Your comments resemble the comment by Liam. It is a strange and uninformed attempt to point to irrelevant points in a lame effort to deflect blame.

Incidentally, at the urging of Bush, the Republican GOP passed legisation in 2005 allowing mortgages to be financed with NO money down. Zero.

Please read my earlier comment. I believe I did a pretty decent job of explaining a complex situation.

Posted by: phx8 at September 18, 2008 1:01 PM
Comment #263364
Incidentally, at the urging of Bush, the Republican GOP passed legisation in 2005 allowing mortgages to be financed with NO money down. Zero.

Which was one of the few good things that Bush did and something that the Democrats reversed.

Yippie.

Posted by: Rhinehold at September 18, 2008 1:36 PM
Comment #263366
Please read my earlier comment. I believe I did a pretty decent job of explaining a complex situation.

If you mean “parroting the Obama campaign talking points” then yes, you did an exceptional job.

Posted by: Rhinehold at September 18, 2008 1:37 PM
Comment #263367

dbs,

are you finally conceding the point that you were wrong in claiming capital gains had already been taxed once as income?

Posted by: Walker Willingham at September 18, 2008 1:39 PM
Comment #263369

>PS to dbs -
FWIW, the “taxed twice” mantra that I think you’re picking up on, is the one I’ve heard in repudiation of the estate tax. If I were writing the tax code, actually I would do away with the estate tax, but institute an inheritance tax whereby the heirs of an estate would have to claim their inheritance as income in the year they receive it for liquidable assets, or in the year that they divest it for non-liquidable assets (addressing the family farm/business issue), with perhaps a modest exemption for the first few thousand dollars. From the point of view of the inheritor, it is new wealth.

I also reiterate the point Lawn Boy made, that taxes are (or should be) our joint contribution to public projects (which ought to be) in the public good. Tax rates are simple the way to determine how to split those costs in an equitable manner, not a way to redistribute wealth. Because we can acknowledge that there is a certain base amount which people need to survive on, compassion demands that there be adjustments (whether in the form of an exempted deduction, a graduated rate, or both) to keep those taxes from depriving those already struggling to make ends meet of necessities.

Posted by: Walker Willingham at September 18, 2008 1:41 PM
Comment #263377

Rhinehold,
I don’t know what the ‘talking points’ are for Obama. I read various articles online. Would you care to address anything I said specifically? Do you doubt anything I said in my comments?

I’m sympathetic to the idea of letting people fulfill their dream of home ownership. After I was in the military, I purchased my first home with a VA loan and no money down. However, I did have to provide proof of income, showing I could support it, and the VA loan was probably the best tangible benefit I received for being in the service.

As we can see from the way things turned out, putting no money down is risky IF a home buyer has inadequate income or a solid work history. I will never understand how mortgage brokers could have been so greedy, but many mortgages were written with no money down, and no proof of income or work history. It boggles the mind.

Posted by: phx8 at September 18, 2008 2:08 PM
Comment #263379

walker


“If I were writing the tax code, actually I would do away with the estate tax, but institute an inheritance tax whereby the heirs of an estate would have to claim their inheritance as income in the year they receive it for liquidable assets, or in the year that they divest it for non-liquidable assets (addressing the family farm/business issue)”

i think this would be far more reasonable then the old system before the bush tax cuts when the top rate i believe was 55%. if it were taxed at the same rate as income, and that rate was not confiscatory, then yes i think that would be far more reasonable. i would make the exemption considerably higher though, and adjust it for inflation.


“taxes are (or should be) our joint contribution to public projects (which ought to be) in the public good. Tax rates are simple the way to determine how to split those costs in an equitable manner, not a way to redistribute wealth”

so long as those projects benefit all, then IMO that is fair, but taking income from one person and giving to another person by gov’t, is IMO redistribution of wealth.

Posted by: dbs at September 18, 2008 2:23 PM
Comment #263380
As we can see from the way things turned out, putting no money down is risky IF a home buyer has inadequate income or a solid work history. I will never understand how mortgage brokers could have been so greedy, but many mortgages were written with no money down, and no proof of income or work history. It boggles the mind.

I disagree, over 95% of the mortgages given out under this program are still solvent. It was a small group that actually were in foreclosure.

The real problem was not the new home buyers buying with no money down to get out of the cycle of rent, it was the people who were looking to make more money by refinancing their home loans with adjustable rates. When the readjust came around, they were shocked that their monthly payment went up so much. And by then they had already spent the money they had pulled out of the equity of their homes that they used to pay for the refi and ‘other things’. They could not afford the new rates and had no more money left to refinance to a realistic fixed.

Congrats on the left for ensuring that we don’t have a 95+% success rate on getting poor people into houses…

Posted by: Rhinehold at September 18, 2008 2:34 PM
Comment #263382

taxes such as the estate tax is needed to prevent an aristocracy from building generational wealth to the point where the family is above the law and able to influence our democracy negatively. The massive accumulation of wealth is damaging our democracy. Look at the corporate influence on todays election for a good example.

Posted by: j2t2 at September 18, 2008 2:36 PM
Comment #263383

Rhinehold,
You’re right, adjustable rate mortgages did play an important role. The problem with the relatively speaking, ‘small’ number of foreclosures is that their effect was magnified beyond all proportion by the credit default swap markets.

From what I can tell, Republicans Paulsen at Treasury and Bernancke at the Fed are doing a terrific job. They are moving fast, they are making bold and they’re not afraid of making controversial ones. I guess you could say we owe them a ‘debt’ of gratitude.

Posted by: phx8 at September 18, 2008 2:42 PM
Comment #263385

RickIl,

timmy is a flame baiter and has been banned for years. He continues to get back on from time to time under alternate ISP’s. His comments have been removed.

Your appropriate response in compliance with our Rules would have been to report his comments to WB management.

Instead, you chose to engage in a personal attack in our Comments section in violation of our Rules of Participation.

Since you have been a participant for many years without infraction, you are receiving this one warning, Comply with our Rules or lose your privilege to participate here.

Posted by: WatchBlog Manager at September 18, 2008 2:55 PM
Comment #263389

Walker Willingham-

So many people want all the benefits of living in this country and don’t want to pay their fair share to support the system that made their wealth possible.

Posted by: Mike Wrona at September 18, 2008 3:22 PM
Comment #263391

Supporting the system isn’t what people have a problem with, Mike.

Posted by: kctim at September 18, 2008 3:31 PM
Comment #263392

mike

“So many people want all the benefits of living in this country and don’t want to pay their fair share to support the system that made their wealth possible.”

not true mike. we all realize gov’t as being a nessecary component of our society that needs funding. where we differ is on what the size, scope, and how much of a role that gov’t should play in our everyday lives.

Posted by: dbs at September 18, 2008 3:35 PM
Comment #263393

At lunch I heard 15 minutes of Rush Limbaugh discussing the subprime crisis. Undoubtedly he is a source of a lot of the misinformation. He denouned predatory mortgage brokers, which is fine. He then turned on Frannie Mae and Freddie Mac, as if they were somehow the source of the crisis, and completel ignored credit default swap markets, as well as the repeal of the Glass Steagall, and other pieces of legislation involving Phil Gramm. I suppose it’s safe for him to count on his audience not to know about the credit default swap markets, but it does a huge disservice to every American to ignore this, because this is what transformed a downturn in real estate into an economic catastrophe. It was the discrepancy between the value of the mortgages sold and the magnified value of the their derivates in the credit default swap markets.

Posted by: phx8 at September 18, 2008 3:43 PM
Comment #263394

watchblog manager

Since you have been a participant for many years without infraction, you are receiving this one warning, Comply with our Rules or lose your privilege to participate here

Point taken. And I offer my apologies if I have offended anyone.

Posted by: RickIL at September 18, 2008 3:47 PM
Comment #263401

I will admit, as RickIL did, I am not savy on the economy, so sorry if this is a dumb question but it has been on my mind.
Would all of this have happened even if people did not take out loans they knew they could not afford to pay back?

Posted by: kctim at September 18, 2008 4:23 PM
Comment #263406

kctim,
No one can know for sure, but some version of this probably would have happened. Not many people can afford to buy their house without a loan of some sort. At some point, a large enough decline of housing prices would have put the most recent buyers “upside down” on their mortgages, and as people lost jobs in the downturn, there would have been foreclosures. As long as there was a discrepancy between the assessment of risk and the actual risk, the credit default swap markets would have imploded. The longer this fall took to develop, and the larger and larger the credit default swap market grew, the smaller number of foreclosures (that looked good, but weren’t in a downturn) it would have taken to result in multi-trillion dollar losses.

The real key here is not the buyers of mortgages, or issuers, or predatory lenders. The key is the credit default swap market. Those guys at Morgan Stanley and Lehman and Bear Stearns were supposed to be smart, and they were certainly very clever, and they made a ton of money in fees. They created a $45 trillion market (based on the face value of the contracts). The destruction of the firewalls between investment and commercial banks make it possible for the downturn to affect multiple financial sectors. Sadly, it turns out that those clever people were actually very, very stupid. Their greed blinded their judgment.

Posted by: phx8 at September 18, 2008 5:05 PM
Comment #263409

kctim

There are no dumb questions as far as I am concerned. I was always told that if you don’t ask questions you won’t get answers. I think I am lucky to have this site and the multitude of very sharp and knowledgeable people that drive it. Myself not included, but I can say that I have learned much from them and I look to them to help me form opinion and educate me on a wide range of matters.

I can’t give you a direct answer to your question but I can speculate a little. I heard one radio commentator ask a financial expert why, if the financial institutions knew they were doing wrong, did they allow this to happen. The answer was very simple. The money to be made was huge and there to be had. In a nutshell greed was the motivator. And there was no one to tell them no. To be honest I think the housing portion of this is only a portion of the problem. I think it is the activator that has begun a reckoning process that is the result of simply being to mired in debt and too reliant on oil as individuals and as a nation.

Posted by: RickIL at September 18, 2008 5:14 PM
Comment #263411

phx8

Their greed blinded their judgment.

We must be listening to some of the same analysts. You said it much better than I did to kctim. The word judgment is the key factor. They put judgment aside in favor of profits. I heard it explained that the money to be had was just too huge and easy for them to ignore.

Posted by: RickIL at September 18, 2008 5:23 PM
Comment #263415

RickIL,
I never thought I would admire a high official in the Bush administration, but Paulsen has been terrific. He and Bernancke arranged an injection of $180 billion into the credit markets, ensuring liquidity today, just when everyone thought the jig was up. Now there is talk that Paulsen is putting together a long-term solution for all the bad debt. It sounds like a version of the Resolution Trust Corporation from the S&L crisis. The amounts of debt are scary, and no one knows how much time we have, but at least the guy’s thinking, and not babbling some silly talking points.

Posted by: phx8 at September 18, 2008 5:49 PM
Comment #263418

phx8, I agree. Can you imagine the time it would have taken for 535 folks in congress to agree to anything, much less a working solution in time to do any good? No wonder Paulsen and Bernacke didn’t want congress looking over their shoulder. In my opinion, if brains were gunpowder, the majority of congress wouldn’t have enough brains to blow their nose.

Posted by: Jim M at September 18, 2008 7:23 PM
Comment #263419

Jim M,
There’s no way a legislative body can act fast enough. Once a proposal is put together, it will need to be fast tracked through Congress, which means making an important decision much faster than anyone would like. Then again, no one wanted this situation in the first place.

Posted by: phx8 at September 18, 2008 7:35 PM
Comment #263420

phx8

What Paulsen is doing is all fine and good but it does offer up some fundamental questions. I heard talk today that someone did research to determine if any other country had ever gone to this length to bail out a private entity. Ethiopia was the only other country he could come up with. They have now set a precedence that will most likely cause every joe blow financial institution and their off shoots to be looking for bailouts whenever trouble arises. It also puts a new meaning on the term free markets. Are they creating a no lose situation for investors in this country? I was always of the impression that investors made their money on risk. Sometimes you lose sometimes you fail. Those who lose go away and make room for the winners and new avenues of risk pop up in their place. When we remove the factor of risk from the equation is it still a free market or is it socialized investment? I guess what I would like to know is how far in the interest of being fair to all should our government take this and what sort of precedent are we setting for the future with regard to risk investment.

Posted by: RickIL at September 18, 2008 7:53 PM
Comment #263421

“Can you imagine the time it would have taken for 535 folks in congress to agree to anything,”

If it were only 535 but when you add in the 17,000 lobbyist that can really slow things down. Until we get the lobbyist and their money out of the way it will only continue to get worse.

Posted by: j2t2 at September 18, 2008 8:17 PM
Comment #263423

“It also puts a new meaning on the term free markets. Are they creating a no lose situation for investors in this country?”

The problem is the size of the corporation. Anytime 1 to 5 corporation’s failing can put the country in a depression its time to break up the corporations to a size that will not be a threat to the security of this country. The taxpayers of this country should not have to bail out the investors and speculators both foreign and domestic unless the investors can afford to pay us back. The bill should go to the RNC IMHO afterall its their policies and procedures that once implemented caused this problem.

Instead of another Resolution trust fund I support a bridge loan by the feds at an interest rate that reflects the large risk of the loan and let these corporations pay us back over time.To let them off the hook is unconscionable.

Posted by: j2t2 at September 18, 2008 8:33 PM
Comment #263425

phx8

As far as Paulsen is concerned there is little doubt he is one sharp cookie. I remember comments at the time of his appointment that Bush had gotten so desperate that he found HP by scraping from the TOP of the barrel. I also have heard speculation that it was Paulsen who finally convinced Bush that global warming was real and man-made, and he’d better get on that bus. Soon after his appointment Bush’s tune (though unfortunately not nearly enough policy) on climate crisis changed.

Actually the average quality of the current crop of Bushies has gone up over 3 & 4 years ago. No question Gates is better than Rumsfeld for instance.

Posted by: Walker Willingham at September 18, 2008 9:12 PM
Comment #263430

Walker,
Very true. Gates is a huge improvement, and Paulsen has been a big improvement, too. All of us were very fortunate Paulsen was in position when this happened. The previous Secretary of the Treasury, Snow, was a total bozo.

j2t2,
“Instead of another Resolution trust fund I support a bridge loan by the feds at an interest rate that reflects the large risk of the loan and let these corporations pay us back over time.”
I think that’s what they did with the AIG bailout. It was a two year bridge loan at a very high rate. Doing that gave AIG enough time to sell of assets to cover the loan.

That’s a good approach if the firm has the kind of saleable assets which AIG did. However, it approaches the problem piecemeal. What I like about an RTC style approach is that it is proactive. Rather than waiting to see if we’re all doomed, I’d rather see the problem attacked, which is what Paulsen is doing.

RickIlL,
Well, the more I read about the CSD markets, the more I realize I don’t know! Yikes.

Good point about the risks of an RTC style of approach. The thought of dropping $1 trillion dollars of taxpayer money on… nothing, just crap… is a pretty awful option. But it still beats waiting for things to go wrong. I’d rather see Paulsen and Bernancke try, and make a mistake, rather than passively react to the situation.

Man, the idea of bailing out people who do NOT deserve a break is galling. We’re looking at $1 trillion, who knows how much, I mean, I can’t even imagine that amount. For $1 trillion, we could provide an entire generation a college education, AND probably do national health care too! Some people need to be tossed in jail.

Posted by: phx8 at September 18, 2008 10:08 PM
Comment #263458

Bush On Fannie Freddie Reform
From his State Of The Union Address in January 2008, “My administration brought together the HOPE NOW alliance, which is helping many struggling homeowners avoid foreclosure. And Congress can help even more. Tonight I ask you to pass legislation to reform Fannie Mae and Freddie Mac, modernize the Federal Housing Administration, and allow state housing agencies to issue tax-free bonds to help homeowners refinance their mortgages. These are difficult times for many American families, and by taking these steps, we can help more of them keep their homes.”
Our President plead with Congress for reform and got none in the 8 months since then.

Posted by: poppy at September 19, 2008 8:12 AM
Comment #263462

phx8

I was listening to BBC news this morning and they were interviewing a short seller. They asked if he felt that short selling was responsible for the problems in the markets. The guy said absolutely not. He claimed that it is normal everyday practice and that he felt they were being scapegoated to mask the real problem which is banking mismanagement by way of taking undo risk out of greed. Now the taxpayer is going to be required to bailout the wealthy because the result of their inadequacies will have a negative affect on our well being. I see the headlines in the Chicago Tribune this morning is “The Mother of all Bailouts?” I haven’t read the article but I think the headline says it all. I find it interesting that conservatives who are so against government intervention in our lives are suddenly in favor of government bailouts since their money is at risk. A double standard in the form of hypocrisy perhaps?

At any rate, something is drastically askew in financial land and I think a lot of scurrying is being done in efforts to place or maybe even avoid blame. As far as I am concerned it simply boils down to poor fiscal policy and a gigantic financial market that has grown so fast and furious that unscrupulous financial dealers simply took advantage of an unregulated market with inadequate oversight. You are right some heads need to roll and as j2t2 says these folks who are being bailed out need to be tagged with high interest rates on their bailout loans, just the same as little folks who pay higher rates for less than adequate credit scores. My guess though is that our congress people will take care of these folks with a handshake and a handout. And in the end business will go on as usual until the next necessity for bailout comes around. What in the world would those wealthy scavengers do without access to our assets. Maybe they will remember us when it is time for that next pay raise.

Posted by: RickIL at September 19, 2008 8:17 AM
Comment #263479

CNN breaking news:

Treasury Secretary Paulson says “hundreds of billions” of dollars are needed to resolve U.S. financial crisis.

Posted by: womanmarine at September 19, 2008 10:47 AM
Comment #263483

Now I’m studying medicine right now, never owned a home or thought about buying one, nor did I invest in the market at all, my parents were poor after all, so I don’t really get the market or much of business. But isn’t all this money “virtual” anyway? What is it backed up by?

In “our” world, my friends and I, at least we don’t really think about these things, not because we don’t care, but I find it hard to look at the NYSE floor on TV and see hundreds of people shouting and arguing to sell stuff that dosen’t exist (excluding the obvious like food, goods, etc.).

So most of what I understand of this is, that some unfathomably large corporations with higher-than-thou guys on top and their partners(those that sold people’s assets?), stole/”mismanaged” a bunch of money, and then the government stepped in?

If that’s not what happened and I’m wrong, I’d like to know then, these simple questions, who caused it, when did they do it, and why aren’t they in jail yet?

I mean when someone steals or does something against someone else that hurts that person, we do put them in prison right?

Posted by: Jon at September 19, 2008 10:55 AM
Comment #263485

Jon:

My take is that they are not in prison because deregulation took away the laws that would have done so. A very simplified understanding admittedly.

Posted by: womanmarine at September 19, 2008 11:01 AM
Comment #263486

Interesting things:

Sixty percent (60%) of Americans now believe the U.S. economy is not fundamentally sound, and voters are evenly divided on whether any laws passed by Congress will make things better, according to a new Rasmussen Reports national telephone survey.

In fact, voters are slightly more inclined to blame Congress for the current problems on Wall Street than President Bush, 27% to 20%

It is funny because really, the economy is fundamentally sound. We have issues that need addressing (crushing taxation, out of control debt, interest payments on the debt, SS that will destroy the US if not dealt with, etc) and market readjustments usually bring out the ‘sky is falling’ partisan types, but most of us in our day to day lives will see no real issue from all of this.

Voters apparently believe that America is in a terrible recession — even though the gross domestic product grew at an annual rate of 3.3 percent last quarter and grew by some .09 percent in 2008’s first quarter. When the public is in full panic mode, McCain could take a lesson from Barack Obama, who is running ahead of the stampede.
You can tell it’s the most serious financial crisis in generations because the unemployment rate is 6.1 percent — which, The Chronicle reports, represents a “five-year high.” When the unemployment rate was 5.7 percent in July, that was a “four-year high.” The Associated Press reports that the number of troubled banks is also at a “five-year high.” Five-year highs? These are the statistics that herald the worst financial crisis since the Great Depression?
what has happened to politics, when a candidate “must pretend this is a recession or you’re seen as hard-hearted.” And: “What does it say when we can’t be nuanced? And we can’t say, ‘Look, we’re in a little bit of a slowdown, but the fundamentals are strong’?”

The answer, of course, is that Democrats can’t win without trashing the economy. In Obama’s famed anti-Iraq war speech back in 2002, the then-Illinois state senator suggested the war was waged “to distract us from corporate scandals and a stock market that has just gone through the worst month since the Great Depression.”

In fact, the stock market had four bigger one-month drops since the Great Depression, but facts don’t matter. The winning candidate in 2008 may well be the man who can say the worst things about the American economy. That’s how he shows he really cares.


Posted by: Rhinehold at September 19, 2008 11:05 AM
Comment #263487

Rhinehold:

Where did those quotes come from? Is there a link?

Posted by: womanmarine at September 19, 2008 11:08 AM
Comment #263492

The nutter Lou Dobbs aside, as a Brit whose country is not above reproof I’m nevertheless utterly disgusted with the interminable ignorance and political naivety, bordering on the crass, that afflicts so many US voters. Granted that huge numbers of you rely solely on lying rightwing cable networks for your obligatory soundbites, haven’t got passports and will never do so, have never left mainland USA and don’t even exhibit a child-like curiosity to do so or properly acquaint yourselves with what’s going on in the rest of the world, that doesn’t surprise me in the least.

What does, though, is your marked lack of commonsense and the power of rational deduction. How can anyone seriously contemplate voting for a dimwitted, failed US military pilot who trumps his abysmal failure in the battle arena (he crashed five planes for Christ sake before mercifully be taken as a POW) as an unmitigated success or even heroism; or a man who is a known womaniser, serial adulterer, groper, home wrecker and callous wife deserter, with a vile temper, as a paragon of moral virtue? And these blemishes constitute just the tip of the Alaskan iceberg as regards John McCain’s seriously flawed character.

Just observe the body language whenever he seizes any and every opportunity to grab hold of Sarah Palin in a supposed instinctive embrace but whose own body language shows how repulsed she is by his attentions; but as the unabashed opportunist that she is, simply allows it to please her neo-con handlers and help further their New Century America agenda.

And in case you think I’m too hard on John McCain may I suggest that you get him to release his “closed” military file that unequivocally shows why, with substantial influential string pulling, he was bundled out of the military and sent off to the bolthole that, in his case, was Washington, and where he’s been for the past 26 years. For it was either that or him doing serious time in jail for his unwarranted, predatory, sexual predilections.

The White House has hosted all sorts as residents since it became the official home of the US president. But do you Americans really want a predatory, sexual miscreant and unstable paedophile as your head of state? How do I know? Now that would be telling, won’t it?

Professor Dr. Stanley Collymore
London, England.

Posted by: Prof. Dr. S. Collymore at September 19, 2008 11:27 AM
Comment #263494

Rhine,

You posted that, but having all these companies fall like dominoes can’t be a good thing can it?

I mean, did the government even check to see, years ago, that these guys were going to declare bankruptcy or looking for bailouts?

How does a company with 10-40 trillion some odd dollars in holdings or worth go bankrupt without anyone noticing or putting a stop to it?

As far as candidates, you see the GDP and growth rate, but it can be higher than anything in years, but all that matters is people’s outlook and trust in the economy and government. If a report says we are doing good, and 10 million people say they’re worried, it’s the 10 million that have leverage. Both candidates are guilty of that, but to be honest, in mid-Pennsylvania, and especially Philly and Pittsburgh, for the past 8 years, less and less small stores have opened, more have closed and I see more people going into Wal-Marts and other warehouse stores for cheap stuff than anything.

Posted by: Jon at September 19, 2008 11:33 AM
Comment #263495

Jon,
The Credit Default Swap Market may be arcane and practically unknown, but like any virtual investment, the face value of CSD contracts represent money, and it has an underlying buy/sell value. Part of the problem right now is that the CDS market has a face value tens of trillions of dollars, but no one knows what the contracts are actually worth. No one will buy or sell them. Large financial institutions suspect they may be worth very little, and therefore they do not trust each other enough to extend credit for the contracts, or anything else, for that matter.

Poppy,
‘Party Pooper’ posted the same comment earlier in the thread. I specifically refuted it. It is extremely rude to do what you are doing. Please stop.

Rhinehold,
I have to get going, but remember the current downturn is a credit crunch. It is not going to look like other recessions. It takes longer to start, people are slower to recognize it, it lasts longer, cuts deeper, and is harder to get out of….

Posted by: phx8 at September 19, 2008 11:35 AM
Comment #263502

Stanley

and what would be your take on barrack obama ? just curious.

Posted by: dbs at September 19, 2008 11:49 AM
Comment #263505

“The White House has hosted all sorts as residents since it became the official home of the US president. But do you Americans really want a predatory, sexual miscreant and unstable paedophile as your head of state? How do I know? Now that would be telling, won’t it?” Professor Dr. Stanley Collymore London, England.

You cite “closed” military files to further your fantasy. Are you some kind of James Bond spook? I doubt it as Bond displayed intelligence and didn’t appear to disrespect those of us in the former colonies.

John McCain = Bill Clinton as a misogynist? Hardly. With all the troubles in Great Britain and your Gordon Brown led government, how do you find time to meddle in our affairs?

Posted by: Jim M at September 19, 2008 12:42 PM
Comment #263508

Who Gets Fannie Freddie Campaign $


Who are the top 5 recipients of Fannie Mae and Freddie Mac Campaign Contributions from 1998 to 2008? According to public records reported in the press, of the top 5 candidates, its as follows:
1. Christopher Dodd, Democrat, US Senator
2. John Kerry, Democrat
3. Barack Obama, Democrat
4. Hillary Clinton, Democrat
5. Paul E. Kanjorski, Democrat.
Of the top 25 politicians countrywide Mr. Obama’s Presidential Opponent does not appear on the list. So who is really in the pocket of lobbyists? Who was Fannie and Freddie counting on to keep the regulators away as the mess was underway?

Posted by: pom pom girl at September 19, 2008 1:16 PM
Comment #263511

RickIL wrote, “I find it interesting that conservatives who are so against government intervention in our lives are suddenly in favor of government bailouts since their money is at risk. A double standard in the form of hypocrisy perhaps?”

RickIL, I am a conservative but can only speak for myself as no consensus has yet formed that I am aware of. And, it does bother me and I am now dealing with a mixture of emotions and thinking that are at odds with each other.

However, being a conservative does not make me irrational or unable to take detours when the solid road presents a sudden danger. Purchase of nearly 80% of the assets of AIG by government with a buyback arrangement earning 11% interest may be a sound and profitable investment. Similiar arrangements with Chrysler some years ago went well and American’s profited from the deal as did Chrysler and its thousands of employees.

Just as the real assets of Chrysler were collateral for their loan, AIG also has assets exceeding liabilities representing collateral for this deal. As I understand, this loan gives AIG time (two years) to sell some assets without having to unload some of its subsidiaries at fire-sale prices. And, there is a reasonable expectation that AIG will pay back the loan with interest.

Boiled down to the essentials, this is a business deal between government and a publicly traded corporation. Whether it turns out to be a profitable deal, for both sides, remains to be seen.

I take comfort in knowing that unlike Social Security, Medicare and Medicaid, this deal has 1) time limits, 2) is backed by real assets, not IOU’s, 3) has a finite limit of possible red ink, and 4) is an emergency action not a planned scheme designed to transfer wealth.

With regard to today’s action of the mass infusion of funds by central banks all over the world, I am pleased to see such cooperation. The world’s financial well being is on fire and all the world’s firemen are helping to quench it. I have seen quick action and not the usual slow pondering and politicking.

To summarize RickIL, as a conservative I hope such government intervention is rare, limited to emergencies, and helps all at the expense of none.

Posted by: Jim M at September 19, 2008 1:34 PM
Comment #263568

Jim M

I have heard that the assets of AIG are questionable and because of their size the totality is unknown at this time. There was no time to sit down, do the math and look closely into their books to determine positives from negatives. As you say time will tell. It will also tell if this infusion of big big bucks will do the trick. I heard tonight on the radio that this is the same approach Japan took at the onset of their financial crises back in the 90’s. They said it took them a decade to recover because it failed to address the underlying causes. I most certainly am no financial expert but common sense tells me that there is much more to this crisis than a few short sellers, and mortgage debt. To be honest I think our financial engineers are in the learning process with regard to survival in a global economy. I suspect there will be much grief and much debt before they figure this thing out. But then I tend to be a bit of a pessimist.

Posted by: RickIL at September 19, 2008 9:18 PM
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