A Reinvogorated America
It is embrrassing. It is ridiculous. He does not deserve it. He got it because he is not Bush. He has not accomplished anything yet. Most Republicans and Democrats have no clue why President Barack Obama was awarded the Nobel Peace Prize. They do not appreciate how transformative a leader Barack Obama is. People in foreign countries do, but we may be too close to see it too. Obama’s winning of the Nobel Peace Prize will lead to a reinvigorated America, an America that leads the world towards peace and prosperity.
Sure, everyone was surprised by the Nobel decision. I don't doubt that, at first, the vast majority of us reacted as David R. Remer did:
Republican National Committee Chairman Steele immediately set out a speech deriding the decision and Obama for having accomplished nothing; which, pretty much says it all.
Obama has accomplished nothing? This reaction is pretty universal. I can see why a guy like Steele, who is head of the Republican National Committee, would say it. He does not understand. He thinks like Bush and other far-right Republicans, such as Limbaugh. He believes you have to be the tough guy to be feared by all in order to get other countries to do what you want. This is what President Bush did and his policies failed.
But many Democrats are reacting the same way. They don't say that Obama has accomplished nothing but that the prize came too soon. He did not earn it yet. What disturbs me more than anything, is the way the Democratic National Committe retorted to Steele's outburst:
The Republican Party has thrown in its lot with the terrorists — the Taliban and Hamas this morning — in criticizing the president for receiving the Nobel Peace Prize.
The DNC does not understand Obama either. It insults Republicans the same way the RNC insults Democrats. The DNC and the RNC are so accustomed to throwing bricbats at each other, they do not know how to do anything else. The belligerent attitude of Republicans and Democrats towards each other is what keeps our society so polarized. This is why we have lost the American luster. This American luster, which for generations beckoned immigrants to our shores, is being revived by Obama.
He is doing it with his message of treating all countries with dignity and understanding, with humility and empathy, with fairness and compassion. His watchword is cooperation. Countries around the world have had their fill of selfish fighting and killing and wars, they are ready to follow someone who perhaps can improve their lives. To all these millions of people, Obama has sent a message of a better future for all.
True, Obama has not achieved anything in terms of concrete peace agreements, treaties or cooperative commercial agreements. But he has definitely changed the tone of international conversations. This is a tremendous achievement. I can think of nobody in the past who has been able to so influence the world in a positive way than Barack Obama. He deserves his Nobel Prize.
Obama's emphasis on cooperation is key to his influence and key to solving the most important world problems: war, recession and climate change. War comes about by too much emphasis on competition. To get rid of war you must learn to cooperate with those you have previously called enemies. The current recession was caused by Wall Street, but it spread throughout the world. We must discuss cures with leaders of other countries in order to achieve a system that brings prosperity to all. Climate change can not be solved at all without cooperation among all, or at least most, nations. What good does it do for U.S. to lower its carbon emissions while China or India increase theirs? We must work together to stabilize the climate so that all inhabitants of Earth benefit.
We need a leader like Obama to make us all see the value of cooperation for solving the world's problems. We also need cooperation within our country to solve our healthcare, energy and other problems. Here lies the big problem for Obama. He must find a way to get Republicans and Democrats to talk to each other. He's been trying for a long time. I'm sure he will eventually do it.
Obama's Peace Prize is a boon to America. It will help Obama reinvigorate America.
Posted by Paul Siegel at October 10, 2009 6:59 PM
Now he is going to have to live up to this award and if he fails it won’t be a boon to America it will be a disgrace. IMO he didn’t deserve it.
Suppose Obama succeeds?
That is a BIG IF. If he does succeed great. If he don’t then it is a disgrace and the end of BHO.
I think most people will view this over time as too soon.
Paul, I think you are wrong in that it will not be some transformation. The Nobel Prize committee are just people.
I do notice that Watchblog is very different from the rest of the world. Even the media who leans left are pretty skeptical of this award. Many who voted for Obama are skeptical.
Many here are from the far left. It’s hard to get a balanced opinion. It’s more of the crowd that says that if one disagrees with Obama you must be racist.
Of course there are the same types on the right.
Many Nobel Peace Prize winners fought for causes that ultimately lost, or failed, or turned out poorly. Most of the people taking a stand for peace have not, in retrospect, been viewed as disgraces, even when it did not turn out well. Standing for peace and for human rights is its own reward.
I don’t think President Obama CAN succeed to the extent of expectations. It is not humanly possible. Besides early indications of actual progress, as opposed to the PR progress, are not promising.
The problem for Obama accolades is that they think that everybody WANTS what Obama is selling and that we can find solutions. The Russians, for example, are aiming to diminish American influence. The Chinese would like to rearrange the world economy in ways that will help them at our expense. Various developing countries prefer to limit our CO2 emissions w/o making any of their own. Mexico would like relatively open U.S. borders. And that is only listing the aspirations of those who are NOT our enemies.
Dialogue is great but sooner or later you have to move beyond the talk. Beyond that, sometimes dialogue helps resolve difference, but sometimes talking about differences merely defines them and makes them worse.
“and if he fails it won’t be a boon to America it will be a disgrace.”
Typical conservative negative attitude KAP. You naysayers and Taliban sympathizers from the right have had your day and have demonstrated failure in international politics quite well, from the weapons for hostages mentality of Reagan to the neocon nation building of GWB. Just because you think he didn’t deserve it is of little consequence isn’t it? Afterall you thought GWB deserved a second term, which doesn’t reflect on your ability to judge who deserves what very well IMHO. What are you afraid of, KAP, peace itself, or Obama achieving success on the world stage through his message of dignity and understanding?
Exactly what do you think will happen to disgrace America any worse than GWB and his administration has the past 8 years? It seems those that nominated Obama for the peace prize and then went on to conclude he represented what the award was intended to represent by honoring him with the NPP have the foresight to see where his leadership is leading this Country and many other nations and deemed it worthy of award simply because it was such a change from the cowboy diplomacy of the past administration. Perhaps you are missing the big picture because of your failed ideological thinking. Or perhaps the conservatives have lowered the bar so much this past 30 years that just an indication of intelligence by Obama has been deemed worthy of the worlds most prestigious award.
You write: “I don’t think President Obama CAN succeed to the extent of expectations.”
Sometimes it is not about concrete, measureable achievements. Sometimes it is a matter of changing direction and changing attitude. Change can occur on such a large scale it cannot be perceived because it is too big for the observer’s frame of reference. Obama compared changing the course of the country to changing the course of a large ship. It takes time, and it happens slowly.
In concrete terms, I suspect the rest of the Obama administration will continue to be an ‘emergency clean up on aisle four, and bring a mop’ follow-up to the disaster of the Bush administration. I don’t want to go on about Bush. However, the fact is Obama is starting from square one to address and coordinate an international approach to Global Warming. Obama is dealing with two failed wars, and virtually no chance of success. Most importantly, the Obama administration is dealing with the failure of capitalism, the collapse of the financial sector last year, and the (so far) successful effort to stave off deep economic depression.
The problem with the economy dwarfs all others. As I said, capitalism suffered a catastrophic failure last year. Only massive government intervention prevented an even worse result than the bad one we already experienced. Bernanke, Paulson, Bush, and the Democratic Congress found themselves in an economic ‘A Few Good Men’ scenario. It was so bad, no one really wanted to look. Grayson & Paul want transparency from the Federal Reserve. They want to know what happened. Everyone else is uttering a collective moan and shaking their head.
So, if he pulls it off, Obama’s greatest achievement may be a kind of negative one; the economy did not spiral into a Second Great Depression. Instead, we merely have a Great Recession, or more accurately, a Second Bankiing Depression. It is not the kind of achievement that will merit a Nobel Peace Prize or fit anyone’s idea of a fulfilled expectation.
You naysayers and Taliban sympathizers from the right
God, I love politics and seeing how people change their attitudes when power changes hands… It’s almost comical and the best part is that neither side involved can see it!
As for the Nobel Prize, the committee are a bunch of tools, IMO. I don’t care if they gave it to Obama or not, that’s no skin off of my nose, but I feel sorry for the people who have done much more for the cause of peace but didn’t get a recognition or reward because of the political ploy of the committee. Of course, they are most likely not out for either recognition or reward, so I doubt that they feel the slight as much. That would be a bright side to being noble. :)
However, I especially love the irony of giving a peace award to someone who is about to ask for more troops to escalate a war… It’s just delicious.
Exactly what do you think will happen to disgrace America any worse than GWB and his administration has the past 8 years?
LOL, Oh I can think of a ton of things. The notion that we are at the ‘bottom of the barrell’ right now is cute, but far from reality. As far as our standing in the eyes of other countries, I wasn’t aware that was his job, making other countries ‘like us’.
The righties mouthy leader states he and his followers sides with Iran and the Taliban and against the sitting American president over whether Obama should be receiving this award. It is expected perhaps, but definitely not funny, to see talk radio conservatives in agreement with the same enemy our troops in Afghanistan are fighting in a war the very same righties supported when it was GWB in office. But then hatred for Obama runs deep in these guys.
“but I feel sorry for the people who have done much more for the cause of peace but didn’t get a recognition or reward because of the political ploy of the committee.”
Can you name some of these people that have earned your “sorry”? Did they reach out to as many people as Obama evidently has touched around the globe this past year, or was their focus smaller and more local?
“LOL, Oh I can think of a ton of things. The notion that we are at the ‘bottom of the barrell’ right now is cute, but far from reality.”
Perhaps Rhinehold but at least we have an administration not so bound to a failed ideology as the previous administration. This gives me encouragement and hope that we can work our way through the problems left behind by the cons and neocons this past decade as well as any new problems we may face as a nation.
“As far as our standing in the eyes of other countries, I wasn’t aware that was his job, making other countries ‘like us’.”
Well Rhinehold remember it was our conservative cowboy diplomacy that was gonna save the country… well until the terrorist attack on the world trade center. Seems our bully approach didn’t work so well. However as far as the president’s job description are you suggesting that good relations with other nations around the world is not the responsibility of the president? Would you prefer to bring back the good ol’ days of Bush diplomacy? Why? What would you consider the role of the president to be if not to protect the nation from hostile nations? Should he be starting fights at the G20 or something to make you libertarians feel better? ;)
What exactly has Obama done to deserve the prize? Except have a vision. I can think of thousands of people who have a vision of pease in this world and many are writers on this blog. Like I said he has a lot to live up to, if he suceeds great, but if he fails it’s a disgrace and the end of BHO. The eyes of the world are watching him now.
IMO - the whole Obama thing has been too much about changes in mood and attitude. We do have to have high morale and spirit. But if it doesn’t translate into real accomplishments it is merely a pathetic dreaminess, akin to how the losers triumph over the cool kids in the after school specials. Real life often requires real work.
The economy stopped spiraling down because of the first stimulus during the Bush Administration. This was bipartisan, BTW, both Democrats and Republicans can take credit. The second, Obama, stimulus passed early this year has barely begun and has not had time to do what you say it did. When we look back ten years from now, I think we will see that we rushed through lots of things and paid a lot for not much. The panic of the early Obama Administration, rushing through bills w/o reading them for example, was unjustified and costly.
“It is embarrassing.”
It was probably intended as such, since the committee knows we are ramping up in Afghanistan.
“It is ridiculous.”
Michael Steele is absolutely right. The monetary part of the award could actually have done some good to some other individual like Betancourt or group, like Medecins Sans Frontieres. 10 million SKR would be a large fortune to them, while our guy doesn’t want or need it.
“He does not deserve it.”
He has said as much himself. Has he negotiated a peace treaty that we don’t know about? Formed a new international orgnaization we haven’t heard of yet? Began an organization helping people build homes after a devastating hurricane that the media isn’t reporting? Maybe he should give the money to Brad Pitt or even Robin Strasser. They could schedule a meeting for when he goes to New Orleans Oct.15 if they’re available.
“He got it because he is not Bush.”
Also true, and not helpful to BHO for an elite group to recognize him as a fellow. I’m wondering if his failure to get the 2016 Olympics 2 blocks from his house may also have played into their decision-making.
“He has not accomplished anything yet.”
Gitmo should have been closed within a month of assuming the presidency. He should have started handing out less than honorable discharges for everyone involved in torturing people so they wouldn’t end up on your local police forces. Can he give Bush a less than honorable discharge?
I just learned from the Sunday morning program that the Nobel prize is awarded for what the person does BEFORE the nomination, so Obama was awarded the prize for what he did before February.
It reminds me of the Sir Robin character in Monte Python and the Holy Grail. His greatness was based in part that he had ALMOST fought the great chicken of Bristol.
Perhaps Rhinehold but at least we have an administration not so bound to a failed ideology as the previous administration.
Um, yes we do. It is a different ideology but has failed just as spectacularly in the past. BTW, ignoring the part that Democrats and liberalism/statism played into what happened to our economy is akin to an ostrich burying its head in the sand or a child putting their hands over their ears and saying ‘la la la la la’.
We keep retreading the same crap from both parties over and over again with the same results and no one wants to look at real alternatives that both strengthen our country by increasing everyone’s individual liberties and understanding of both personal responsibility and shared, non-forced, societal responsibilities.
Well Rhinehold remember it was our conservative cowboy diplomacy that was gonna save the country… well until the terrorist attack on the world trade center. Seems our bully approach didn’t work so well.
And Clinton was going to do the same thing as Obama has promised, save the country from Bush’s results of international diplomacy and ended up with a terrorist attack on the world trade center and the impeteous of al Qaeda’s numerous attacks on US targets around the world as well as letting Saddam funnel millions (or more) in international aid to terrorists through his networks while shooting at US and UK planes on a daily basis and blocking inspections into his WMD capabilities for his whole administration while getting involved into other country’s civil wars (as illegally as the cowboy) and being defeated by Somoli warlords that has helped keep that part of the world in chaos today…
Perhaps NEITHER party has a leg to stand on this regard, phx8? I have yet to see Obama achieve anything on these fronts, we are still in Iraq, increasing the number of mercs we use there, still in Afghanistan, increasing the number of troops there, increasing the spying on Americans that liberals were so bent out of shape on until one of their own started defending it…
Peace? We have yet to see anything close and whether or not peace is brought about by capitulation or not.
BTW, it is even more interesting that our government is now openly working towards a New World Order (words THIS ADMINISTRATION has openly used) and One World Government and no one seems to care.
Factcheck can be a useful resource, but that particular article is awful. First, it attempts to address a complex topic in one column. Second, while it includes many important contributing factors the economic downturn, it ignores other very important ones; the failure to create jobs, falling real wages, and outsourcing immediately come to mind. Third, and most importantly, the column does not weigh the relative importance of various factors.
Perhaps a recession would have happened anyway due to the various factors mentioned. However, the following two turned the recession into the Great Recession, or more accurately, the Second Banking Depression:
“Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.
The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.”
The lack of regulatory oversight allowed leveraging between industries previously separated by Glass Steagall. The leveraging magnified the problem by orders of magnatude. It turned a one or two trillion dollar problem into a tens of trillion dollar problem. THIS- and not the other factors- is what resulted in the failure of capitalism, and the spectacular collapse of the financial sector.
Is factcheck really your only source for economic citations?
Do you ever notice this is in the political elections section and answers a pre election debate stance, not an detailed economic analysis?
My favorite part is that it cites repeal of Glass Steagal as being helpful in the crisis. That sort of makes me think of the joke that it was lucky the pedestrian was run over by an ambulance.
“It is a different ideology but has failed just as spectacularly in the past.”
Rhinehold it seems to me the Obama administration has been much more centrist than you are giving them credit for, much to the dismay of many who thought him to be the more liberal than his actions have shown. Are you sure you are not listening to the far right a wee bit to much?
“Perhaps NEITHER party has a leg to stand on this regard, phx8? I have yet to see Obama achieve anything on these fronts, we are still in Iraq, increasing the number of mercs we use there, still in Afghanistan, increasing the number of troops there, increasing the spying on Americans that liberals were so bent out of shape on until one of their own started defending it…”
Uh Rhinehold doesn’t that confirm that perhaps the Obama administration is not as liberal as you would paint them? BTW you should probably apologize to PHX8 for confusing my thoughts with his. And for the record I was disappointed in the administrations decision to continue in the same vein as the previous administration as far as spying on Americans.
“BTW, it is even more interesting that our government is now openly working towards a New World Order (words THIS ADMINISTRATION has openly used) and One World Government and no one seems to care.”
Can you expand upon this and provide any reliable links for this statement?
“What exactly has Obama done to deserve the prize? Except have a vision. I can think of thousands of people who have a vision of pease in this world and many are writers on this blog.”
Perhaps KAP the wrong person or persons were nominated! You may have a point that the nominating committee did not consider, the American people that voted for Obama and rejected 4 more years of the same are the persons that should have been awarded the NPP.
True, American citizens deserve recognition and maybe even a Nobel Peace Prize for not electing a conservative Republican to the White House. On the other hand, 46% of the electorate voted for McCain/Palin. I suppose we already received our just desserts for that- a horrifyingly bad economy, two failed wars, a 10$ trillion dollar debt, and the embarrassment of having one candidate tell us the economy was actually fine, while the other accused Obama of “palling around with terrorists.”
“It is a different ideology but has failed just as spectacularly in the past.”
Rhinehold it seems to me the Obama administration has been much more centrist than you are giving them credit for, much to the dismay of many who thought him to be the more liberal than his actions have shown. Are you sure you are not listening to the far right a wee bit to much?
I don’t remember saying a thing about him being ‘too liberal’… I think you are arguing with someone else. I stated that his ideology is as failed as Bush’s was. Bush wasn’t much of a conservative and Obama isn’t much of a progressive, in fact they are both more interested in obtaining power and trying to use that power to shape society instead of letting society shape itself. It’s a special kind of narcisism that is…
As for the rest, you can start your reading here and so some research of you like. Ask yourself, what is going to be used when the US dollars fails under the weight of faulty governmental manipulation by the Fed (creating the housing bubble in the first place), spending like never seen before since 2000 and continuing on into the next decade and newer generations demanding something for nothing from a government more than willing to supply it for a few votes?
Hint: SDR is a as good of an acronym as any.
Factcheck can be a useful resource, but that particular article is awful.
I often see this type of language from people who like to use Factcheck when it helps them but reject it when they disagree with it…
First, it attempts to address a complex topic in one column.
And this is worse than most liberal posters or other pundits that try to address it in a single phrase ‘capitalism caused it…’ how?
The *FACTS* are very different when you go through them and do some real analysis. Government intervention into the economy in ways it shouldn’t be helped not only cause the situation to exist that derivatives were a viable option by exploiting a manufactured hole in the economy using the rules of unintended consequences (in the 70s when first discussed they were not followed because they couldn’t make money) but the direct manipulation by the FED to keep interest rates low in order to help Bush win the 2004 election (and stroke the ego of the chairman, of course) created the housing bubble in the first place, but again wouldn’t have been an issue if people hadn’t been out to try to get ‘easy money’ by refinancing their loans and making people who did the refi’s to become rich at their expense.
And the article does a great job of squashing the ideal that Glass Steagal had anything to do with the issue by pointing out that the banks who took advantage of the changes aren’t the ones who failed for the most part.
Actually, deregulated banks were not the major culprits in the current debacle. Bank of America, Citigroup, Wells Fargo and J.P. Morgan Chase have weathered the financial crisis in reasonably good shape, while Bear Stearns collapsed and Lehman Brothers has entered bankruptcy, to name but two of the investment banks which had remained independent despite the repeal of Glass-Steagall.
But, since they are disagreeing with your analysis, they must be wrong, right? When they point out when the Republicans are wrong, they are to be taken as gospel…
However, the following two turned the recession into the Great Recession, or more accurately, the Second Banking Depression
No, phx8, sorry but you are missing the most important one. The Mark to Market accounting rule changes put in after Enron. As was explained many times in the past, had the same rules been in place after the S&L crisis, 90% of the banks in the country would have failed. It would have made the Depression look like a flat quarter.
During the 1980s, our underlying economic problems were far more serious than the economic problems we’re facing this time around. The prime rate exceeded 21%. The savings bank industry was more than $100 billion insolvent (if we had valued it on a market basis), the S&L industry was in even worse shape, the economy plunged into a deep recession, and the agricultural sector was in a depression.
These economic problems led to massive credit problems in the banking and thrift industries. Some 3,000 banks and thrifts ultimately failed, and many others were merged out of existence. Continental Illinois failed, many of the regional banks tanked, hundreds of farm banks went down, and thousands of thrifts failed or were taken over.
It could have been much worse. The country’s 10-largest banks were loaded up with Third World debt that was valued in the markets at cents on the dollar. If we had marked those loans to market prices, virtually every one of them would have been insolvent. Indeed, we developed contingency plans to nationalize them.
If we had followed today’s approach during the 1980s, we would have nationalized all of the major banks in the country and thousands of additional banks and thrifts would have failed. I have little doubt that the country would have gone from a serious recession into a depression.
If we do not halt the insanity of forcing financial firms to mark assets to a nonexistent market rather than their realistic economic value, the cancer will keep spreading and will plunge the world into very difficult economic times for years to come.
If you want to read a good analysis of what really happened and why both parties are at fault for not fixing the problem sooner (it helped out a certain party who was trying to win an election…) then read that article, it makes it very clear that the issue was not that we had a hiccup in our economy but how we allowed the banks to RESPOND to that hiccup and why the overreaction to Enron nearly put us in a world of hurt…
The fact that we had it so mild and that so little has actually been done to our economy (has Glass-Steagal been repealed? and, in fact, new derivatives regarding insurance are now being implemented) OTHER than finally lessoning the Mark to Market rules and allowing people with those mortgages on their books to actually use them as collateral again that is proves the point.
BTW, you also want to forget that it was the Democrats who were in charge of both houses of congress at the time and have been blocking regulation of Fannie Mae and Freddie Mac for years.
It’s true that key Democrats opposed the Federal Housing Enterprise Regulatory Reform Act of 2005, which would have established a single, independent regulatory body with jurisdiction over Fannie and Freddie – a move that the Government Accountability Office had recommended in a 2004 report. Current House Banking Committee chairman Rep. Barney Frank of Massachusetts opposed legislation to reorganize oversight in 2000 (when Clinton was still president), 2003 and 2004, saying of the 2000 legislation that concern about Fannie and Freddie was “overblown.” Just last summer, Senate Banking Committee chairman Chris Dodd called a Bush proposal for an independent agency to regulate the two entities “ill-advised.”
So, continue on with your fairytales if it makes you sleep better at night, but don’t pretend that the left has any kind of authority to speak from on this matter at all…
The repeal of Glass Steagall played a critical role in the financial disaster, in tandem with the Commodity Futures Modernization Act (CFMA). Interestingly enough, Phil Gramm, McCain’s first choice for economic advisor, played a crucial role in the actions.
Glass Steagall provided walls between insurance, commercial banks, and investment banks. Repealing it allowed to the breadth of the collapse to spread beyond one potion of the fiancial sector. It hit the investment banks hardest, but also dealt insurer AIG a crippling blow, as well as commercial banks such as WAMU and also many, many others. B of A still stands, but just barely, and then only because of government intervention.
Gramm’s CFMA allowed the depth of the fall to be almost unlimited. The amendment prohibited government oversight of obscure commodoties markets in mortgage backed securities.
I am not as hard on Greenspan’s interest rate policies as most other people. I’m not saying I liked Greenspan’s policies and political opinions- just that his interest policies were dictated by the context with which he had to work. The economy during the Bush years was weak, even during the recovery. An increase in rates would have driven the economy into recession. The economy was just never strong enough to withstand the increase. Greenspan was pushing on a string. The alternative was to drive the economy over a cliff sooner rather than later.
You write: “BTW, you also want to forget that it was the Democrats who were in charge of both houses of congress at the time and have been blocking regulation of Fannie Mae and Freddie Mac for years.”
I thought the GOP was in charge of the House and the Senate for most of the time between 2000 and 2006. But it was the Democrats fault? Huh. Who would’s thunk it.
It is true both sides share blame with Fannie & Freddie. I’m not too worried about them. They were quasi-governmental agencies that tried to inject free market principles into lending, and injecting that principle failed. However, making Fannie and Freddie governmental agencies is fine, since the value of the loans will have some value, and undoubtedly not go down to zero.
Fannie and Freddie play only a small role in the overall crisis. They represent loan values of @ $5 trillion. If they suffer losses of 20%, a mere $1 trillion, that is a drop in the bucket compared to the amounts lost in the unregulated mortgage-backed securities markets.
There is a lot of blame to go around, and both sides of the aisle can take shoulder some. There are a lot of factors involved. However, the heart of the economic collapse, and the area where the vast majority of the money was lost, 90% or more, to the tune of tens of trillions of dollars, can be identified and attributed primarily to the following: an overall atmosphere of deregulation, the repeal of Glass Steagall, and the CFMA.
B of A still stands, but just barely, and then only because of government intervention.
LOL, really? B of A would be in much better shape had the government not ‘forced’ them to purchase Merrill Lynch. It is wonderful that the government was able to ‘bail them out’ after putting them in the tank in the first place.
I thought the GOP was in charge of the House and the Senate for most of the time between 2000 and 2006. But it was the Democrats fault? Huh. Who would’s thunk it.
Gee phx8, it seems to me that things were going pretty will until 2007. Who took over the reigns in 2007?
*I* never once stated that the Republicans weren’t partially to blame either. In fact, I stated it clearly in my comments. But you can’t accept that for some reason, as if anyone who disagrees with you or the administration is trying to defend the Republicans. You might want to realize that there are a lot more of us who are disgusted with both parties before making assumptions.
However, the heart of the economic collapse, and the area where the vast majority of the money was lost, 90% or more, to the tune of tens of trillions of dollars, can be identified and attributed primarily to the following
FAS 157. This accounting change had the most to do with the freezing up of credit. The ‘toxic loans’ were not worth 0, but because of 157 they had to be reported as such. This caused lenders with these loans to not have capital to lend, causing these institutions to suddenly have much less value thatn they did previously.
In reality, those loans were not worth ‘0’. They were worth something less than the stated value and more than nothing. But because the companies were, by law, required to list those assets at 0, it froze up their businesses and put them in a position that they could not operate themselves out of.
It was not the fact that Glass Steagal was repealed, otherwise those banks that did utilize the repeal of Glass Steagal would have been the ones failing, not the ones who didn’t take advantage, which was the case. In fact, by diversifying, which is waht the repeal allowed, they were better able to operate out of the housing market bubble bursting.
You are just stating things as being factual, phx8, without backing up the analyzation with anything that makes legitimate sense. What I have stated is very clearly the real issue with what occurred last year, not the repeal of a law that 1) hasn’t been reinstated and 2) wasn’t politically advantageous of the left to use in their presidential campaign. It was a nice shard to attempt to throw at McCain because no one would be able to really shout down a concerted, combined effort by the Democrats in enough time to counter the damage it did to McCain’s presidential bid, but it hardly holds up under real scrutiny except to the ‘True Believers’ who have a hard time accepting that it was in actuality increased government regulation, not a decrease, that made the situation as bad as it was.
BTW, the ‘overall atmosphere of deregulation’ is far to general for my tastes and falls into the ‘complex issues being dealt with a single phrase’ that I thought you were against?
EXACTLY what was deregulated? Why did the Democrats fight regulations in 2007 and 2008 and why should we believe that they are now uniquely qualified to enact good regulations that they failed to do during those two years?
Let’s get into actual details and not myopic platitudes, phx8…
>But you can’t accept that for some reason, as if anyone who disagrees with you or the administration is trying to defend the Republicans. You might want to realize that there are a lot more of us who are disgusted with both parties before making assumptions.
Posted by: Rhinehold at October 12, 2009 09:49 AM
I wonder what the actual ratio is…Rhinehold’s anti-Democrat to Rhinehold’s anti-Republican. It has to be a fearful number. I think he falls back on that defense every time he finds himself on the bad end of a debate.
I don’t know, Marysdude, what do you think it is?
It would, of course, preclude you have a clue about what you are talking about, RE:Rhinehold’s views. But since you rarely attempt to comprehend what I write it would make that a tough task indeed.
As far as being on the ‘bad end of a debate’, since that isn’t happening now it would seem a bit of an out of the place statement…
Maybe YOU can help, exactly what was or wasn’t done that caused the financial issues we are currently seeing? And how does it match up with the fact that one of the first things the Democrats did in 2009 was to releax the mark to market rules and yet there has been no attempt to reinstitute Glass Steagal? Why does Bill Clinton still think it was good law?
Facts are a niggly thing when it comes to partisan fairytales…
“I just learned from the Sunday morning program that the Nobel prize is awarded for what the person does BEFORE the nomination, so Obama was awarded the prize for what he did before February.”
Christine by any chance was this a Faux news show that made this determination? According to the link below the winner is picked in October when the awards are announced. Are you saying that those voting disregard anything relevant that may have occurred between January and October? Doesn’t seem to make much sense does it? As Fox is so biased I would not put much stock into anything they “report”. Either way is it really relevant to the fact that those awarding the prize chose our president as the recipient this year?
Perhaps those on the right can start a sour grapes award of their own, say with funding from Murdoch whose should follow the lead of Alfred Nobel and attempt to redeem himself for the disastrous effects on freedom of the press his news company has been responsible for over the years. After all it was Fox that has lead the way to the bottom for the media this past 2 decades wasn’t it?
“FAS 157. This accounting change had the most to do with the freezing up of credit. The ‘toxic loans’ were not worth 0, but because of 157 they had to be reported as such. This caused lenders with these loans to not have capital to lend, causing these institutions to suddenly have much less value thatn they did previously.”
Rhinehold are you sure about this? My understanding is the toxic loans were to be marked to fair value not $0 as you say. Unless of course $0 was fair value. You seem to be supporting the standard of well… Enron that allows for a bank or other entity to set their own value for the toxic loans. It seems to me it is a lose lose situation if what you say is accurate, which it doesn’t appear to be.
That aside do you really believe any of the institutions involved were forced to bundle, buy/sell, insure these toxic loans? As a individual who is a stockholder in these companies wouldn’t you prefer to have transparency in the books of these companies you are considering investing in?
I’m not ignoring your comments about mark-to-market. A long time ago I earned an MBA and even took two courses in Accounting, but I really don’t feel knowledgable enough to be able to comment or add anything useful to that side of the discussion. I do read what you are writing about them.
In very general terms, I think it is fair to note that both sides contributed to the economic disaster. However, one side contributed far, far more than the other…
Maybe we’ll all cover our eyes and sing ‘la la la’ and the economic problems will go away. However, I don’t think that’t the case. Obama and Geithner have chosen the route of putting Humpty Dumpty back together again, and they still really haven’t addressed the underlying causes with adequate legislation. Obama is careful. That is commendable. Hopefully is caution will still allow desperately needed reform to happen within the financial sector. Many people have noted that it isn’t happening yet.
Rhinehold are you sure about this?
My understanding is the toxic loans were to be marked to fair value not $0 as you say.
What is ‘fair value’? That’s the real problem. Is a loan that is most likely going to be defaulted on a 0 value? Or is it, based on the value of the house and possible recovery vaue, worth something more than 0 and less than the full amount?
The problem is that in trying to find a way to say what the Fair Value is, the mark-to-market rules were employed which puts the value at what a trading market (like the stock market but for loans). Which is a pretty good way of evaluating that value, except at a time when there is panic and the market essentially freezes, or collapses, as we had happen.
Now, according to that ‘failed’ market, the value would have been 0. But we all know better than that… Unfortunately, that evaluation of the value of the loans is always going to be subjective, but by forcing that value to be less than what most people would say it should be because of those rules put in place to ensure that the next Enron couldn’t defraud its investors, those companies that had that debt were suddely stripped of huge assets on their books. As a result, couldn’t lend or get lending as needed to function and move its way out of the situation. So instead of relaxing the rules, as was begged of by people like Former FDIC Chair William Isaac, our government felt that a bailout was the best method, to give tax money to the institutions inflicted with this problem so that their books had assets on them once again. This was why I was very against that TARP bailout, because a better method would have been to relax the rules instead of just handing them taxpayer loans, which was eventually done in March-June of this year, and why most of the banks that were in dire straights are doing much better now and are paying (or wanting to pay) back the loans.
Except Chase who was doing pretty well anyway and used the funds to expand their ‘too big to fail’ business even further…
Unless of course $0 was fair value. You seem to be supporting the standard of well… Enron that allows for a bank or other entity to set their own value for the toxic loans.
Not exactly. There has to be a happy medium OR allowances by the accounting agencies to allow for relaxation of the rules when it is necessary. In the original bill, there was no provision for that, but after the election the Democrats finally saw the light and amended the laws to allow exactly that to happen, for regulators to relax their regulations when a market that is being used to evaluate the value of an asset is no longer capable to do that. Had they done that in the fall of 2008, TARP would not have been necessary.
And, it wouldn’t have helped out the Democrats during the election as much either.
The only good thing that I see is that the Democrats, like Schumer, Dodd and Frank, finally came around to seeing what many of us had been saying before and decided that this was the best course of action this past February/March. I listened to the committee meetings and to their credit, once they started to understand the situation they were very good and strong on making sure the changes were put into place quickly when the regulators where trying to balk on how quick they could do it.
That aside do you really believe any of the institutions involved were forced to bundle, buy/sell, insure these toxic loans?
But, remember, they were only worth doing as a result of a manufactured hole in the market put there by the actions of the FED in trying to keep interest rates artificially low. When we move beyond regulating a market to manipulating, as the previous and current administrations want to do, we put ourselves at greater risks, IMO, of that very thing happening.
As a individual who is a stockholder in these companies wouldn’t you prefer to have transparency in the books of these companies you are considering investing in?
Of course, and they should be. I have no problem with that or with good regulation taking place, that is what government should be doing. Not trying to manufacture an outcome but ensuring that the markets are fair, open and free from fraud and corruption.
Any changes to market to market are moving forward. I believe meaning investments purchased/packaged after the FASB ruling. And do not apply to portfolios that exist. A bank can hold a security as “hold to maturity” or “available for sale”. Most were in “available for sale” therefore subject to market valuation. Most financial institutions are writing down these values through their income statements as I type. Despite the fact many of these securities are performing. For example a mortgage backed security that has 100% of its underlying mortgages paying, is still being written down to the value the market will pay, which has not been 100%.
It is crazy when you think about it. Say some 85% of mortgage backed securities are performing, all payments are being made. So those securities are providing the expected cash flow from payments to the investor that they promised. But if that investor tries to sell it, they get a lesser value. The vast majority of Americans are paying their mortgages.
On Glass-Stegall and Bank Modernization Act. Is there something wrong with competition? I thought this was part of the healthcare idea? By eliminating the restrictions between banks, insurance companies, and investment banks, the Bank Modernization Act that Clinton put in place allowed State Farm to compete with Bank of America to compete with Goldman Sachs. In theory I could go into a bank, make a deposit, pay my loan, get a life insurance policy, and then buy some GE stock all at the teller counter. Largely a function of technology and efficiency. I believe there is value, due to efficiency and convenience, that supports why consumers would want Glass Stegall eliminated.
Regulation could have been better.
Also, Citi and Travelers were working together in a thinly veiled partnership that connected insurance with banking, well before Glass Steagall was repealed. I can’t recall when their partnership was formed, but will assume during Reagan’s administration.
Paul Siegel wrote; “Obama’s winning of the Nobel Peace Prize will lead to a reinvigorated America, an America that leads the world towards peace and prosperity.”
Does anyone else read this as an extreme example of hyperbole? Obama winning a prize will reinvigorate America? Please…are American’s so easily lead and swayed?
Mr. Siegel also writes; “But he has definitely changed the tone of international conversations.”
Oh really…in less than a week Mr. Siegel has determined a changed tone? From where does he draw this conclusion?
M. Siegel writes; “To get rid of war you must learn to cooperate with those you have previously called enemies.”
Hmmm…I have read extensively about peaceful cooperation and appeasement by European’s of Hitler’s appetite to gobble up the entire continent. Does Mr. Siegel recall how well that worked out?
There was competition between the organizations within each financial sector. Investment banks competed with each other, commercial banks the same, and same for the insurers. The problem arose because investment banks deal in much riskier areas. Commercial banks have access to the Fed window, and are supposed to be risk averse. Same for insurers. When they crossed the Glass Steagall wall, they exposed themselves to excessive risk.
It’s true, a relatively small number of mortgages are non-performing (althoug foreclosure is certainly a financial tragedy for any family). The problem is that leveraging, through various mortgage related securities, magnified the effect of the foreclosures that did take place. Instead of a 10:1 ratio for each mortgage dollar to leverage, the magnification of leveraging resulted in 30:1 ratios. That should never have happened… It turned what could have been an ordinary economic downturn into a very destructive event.
“But, remember, they were only worth doing as a result of a manufactured hole in the market put there by the actions of the FED in trying to keep interest rates artificially low. When we move beyond regulating a market to manipulating, as the previous and current administrations want to do, we put ourselves at greater risks, IMO, of that very thing happening.”
Rhinehold you speak of risk but neglect to mention the risk those institutions took when the over leveraged their resources and blindly speculated on mortgage backed securities. Why is that the fault of the Feds?
Wasn’t the Glass Steagall act put into law during the great depression to prevent those banking and insurance sectors that did not have the experience from blindly speculating and over leveraging? By passing the Graham act that rescinded the Glass-Steagall act this allowed the “rookie” speculators to over leverage and go blindly into the world of subprime mortgage securities speculation and bring down the economy didn’t? Why is that the fault of the government?
After Enron and the accounting scandals why would one not want to have a mark to market type accounting of speculative mortgages? Mark to whatever you feel like accounting is misleading isn’t it? That being said the change to mark to market by the SEC was in reaction to the abuses by the market players. To blame the government for doing it’s job just doesn’t seem right to me.
j2t2 & Christine,
Faux News is having a field day with all their nonsense talk of Obama being selected before his works had a chance to be analyzed. Actually, the only thing done early was his selection as a nominee, and indeed that was accepted very early. Everything he’s done since then has been part of analysis…the Egyptian talk to the Muslim community, his easing things at GITMO, his throwing out torture as the great American pastime, his work on nuclear disarmament,etc., etc.
I’ve held sway many times on Watchblog, on both the left and right columns, on the subject of GLB’s dismemberment of American capitalism, and see no future in delving into it further. Suffice to say the trading of air by those in the stratosphere of high finance has not stopped, the foreclosure problem has not peaked and until and unless bankers/insurance companies and brokers accept at least a modicum of responsibility, our slide will continue until all the dollars they’ve accumulated are as worthless as they are. Gramm has had his day, and now he’s having ours as well.
phx8, good point there was competition. (1) I wonder how technology was commoditizing that competition so much that GLB was really the right move. It would be hard to argue, at that time, that technology was not going to revolutionize financial services industry. It was thought it would.
I had never thought of your point relative risk. It would seem that the idea was to leverage other lines of business to enter into the an untapped sector. The prevailing wisdom at that time (as a banker) was that it will be easy to convert the loyal bank customer to a loyal bank and stock customer. We were leveraging success in retail to get investments and investments to get that insurance policy.
Allstate, State Farm, both formed/chartered banks in Illinois. What has that gotten them? I do not know the answer to my question.
I agree lending was too aggressive on mortgages. Mortgage originators were the front line, and the banking/investment industry subsidized them. That said there is enough capital in system to absorb those loses. Bank stock holders will just have to deal with decreased value.
If you feel up to it, look at the FDIC. It has a mandatory funding piece. When bank closures soak up their funding they assess all FDIC banks. The first bills just went out recently, pretty steep and more to come. Do banks pass these assessments from the FDIC on to the customer, the share holder, or both?
Out of all foreclosures, I wonder what the percent of sales will be? If 100 homes go into foreclosure, that is someone else’s benefit in say what 80 cases 90? They get a $8000 tax credit right? So eventually the majority of foreclosures move back into mortgage territory.
No, the 8000 tax credit gets reverted if the house is foreclosed upon or the house is sold within 3 years.
Right now 1/3 (and increasing) of the homes being foreclosed on are for values over 400,000, btw.
I find it quite odd that when ever something happens that affects President Obama we go all nuts and start saying things like he dies not deserve it or He has done nothing. Not since president Kennedy has an American president excited the world as has this President. He has given hope to the world that there is another way than the status quo. The status quo is against his being honored by the Nobel Committee. WE have a leader that is percieved for once as the real leader of the Free world. WE don’t have a leader that is percieved as talking out of teh corner of his mouth. I have been alive for the presidentcy of 12 presidents. I have listened to all of them. None has inspired the world to form a more favorable opinion of the American people and America than does this President. He has won many quiet consessions on the diplomatic front that have not reached the papers for several reasons. I see those things daily in my duties for the government. He does a lot of things so quietly that when he does anything in the open it seems to be so great. But he is deserving of the Nobel Peace Prize becasue of what he has done to change wolrld opeinion not only about America but chances for real change in the World.
lieberman needs to be voted out!!! start immediately to train(as military)doctors !!! that pay to school & they pay us back by working just for us 5 years etc. this is already in military.
take the people laid off now!! start entrance the this college program now!!!
write president & congess &99-18-10 guy and demand they quit helping the banks & people running them & demanding them to stop this now or risk losing their jobs!!!
they are using our money to live on also!!! people need to rise up and join together & complain ,demand in any & all ways they can think of etc!! thank you again sir for letting your msnbc & the workers tell the truth.
what about them making millions & billions in profits?? while cd & bank accounts on safe fdic give high 3% & down to less than 1%. this is ridiculous. banks, insurance companies and stock market are tryiing to get people to gamble with their savings for other things—like retirement !!! we need better choices here too!!
and a lot of people have to put it in the stock market to get & keep a job!!! this is brokered and made by those same rich stock people who snuck into gov like donald regan etc on down.
What do u think of this????