Third Party & Independents Archives

March 09, 2009

Myth: Homeowner Borrowers Are At Fault

A number of folks are trying to affix responsibility for this recession and financial crisis on home buying borrowers. That is illogical, and here is why.

First, for as long as there has been credit, a couple thousand years at least, it has been the lender who bore the responsibility for the quality of the loans they chose to issue. It is the lenders with the experience and mathematical expertise to assess the credit worthiness of potential borrowers. Not the sharecropper, cobbler, or Indian Chief. In a society which functions along lines of specialization of labor, it is the creditors specialized in assessing risk, not their potential borrowers.

As lenders have always known, there are borrowers who never intend to repay. Interest payments are intended to compensate for lending risk by extracting a premium from the loans that will equal or exceed the defaulted unpaid loans a lender experiences. In the case of lending, it is a fool who does not assess the risk and follow the rule, 'Let the Lender Beware'.

Specialization of labor dictates that the sharecropper's experience is in working and growing from the soil. The Cobbler's experience is in making and repairing shoes. The Indian Chief's experience is in avoiding treaties with the White People. There experience and background is not in validating their creditworthiness, or doing financial projections into the future to determine their carrying capacity for debt. Determining the carrying capacity of debt for a borrower is the lender's job, expertise, and responsibility. Where was a first time home buyer G.M. worker or Kirby Vaccuum cleaner salesperson in their 20's to have gained the experience and expertise to determine just how much home they could afford to buy, and comfortably make payments on for the next 30 years? The only accurate answer is, from their lender.

Anyone who has ever lent money to a friend or acquaintance knows that they, the lender, are the one's who will suffer the loss of the loan if the borrower fails their end of the contract. The lender may blame the borrower, but, blaming the borrower does not get one's loan repaid. The responsibility for determining credit worthiness lies with the borrower, just as the responsibility for lending one's car to a drunk, rests with the car owner, should the drunk smash their vehicle into a tree while swerving to avoid the Medusa hallucination in the middle of the road.

This principle of lending and determining credit worthiness as a lender responsibility applies to all forms of lending, credit card lending, home lending, small business loans, and commercial loans. What should be as clear to everyone as the noses on the Mt. Rushmore faces, is that the responsibility for this financial meltdown rests directly upon the lender's shoulders, from CountryWide to AIG to General Motor's. It was their responsibility to insure that the total risk posed by loan defaults was one they could recover from and remain in business. They failed to assume their responsibility. Their failure now threatens our entire economy and nation.

Second, sound lending principles don't change with the identity of the lender. When mortgagors lent money based on the the collateral value of the property, it was the responsibility of those banks to test and assess both the current and future value and risk of that collateral. They failed by deferring to greed, ignoring the incredibly dramatic rise in property values in recent years for both residential and commercial property. And the insurers of lenders were also guilty of deferring to quick easy profits, ignoring their responsibility to deposit premiums into a reserve account to offset the rising potential of defaults and decline in collateral values.

Which brings us to the federal government. Sound lending principles do not change with the identity of the lender. If the federal government is going to lend money, it has the responsibility to insure that the vast majority of that money will be repaid, and with a premium sufficient to offset the realistic projected percentage of loans which will default and never be repaid. Our federal government has centuries of experience with borrowing. It also has decades of experience with the role of loan guarantor dating back to the 1930's and including the Chrysler bailout loans, and a significant part of the Savings and Loan industry bailout.

Our government, has little experience or expertise in direct loans and providing such loans on a sound lending basis, which includes risk assessment and reserve set asides. Fannie Mae and Freddie Mac were presumed to have such acumen, but failed to protect their business and the tax payers. Of course, given the 12 trillion dollar national debt, reserve set asides are a joke, not to be taken seriously. Yet, our federal government assumes the responsibility by popular mandate, to rescue our economy from implosion resulting from the lending industry's multitudinous failures of responsibility. Which begs the question, should the federal government lend money to rescue the private sector, grant money without condition of repayment, or, guarantee loans which requires federal officials to engage in risk assessment as an insurance company should?

There is no simple answer which rescues the economy, as each corporate entity threatening our economy has a unique financial condition which defies a 'one size fits all' answer to the previous question. Some corporate entities cannot be loaned money with the hope of repayment; their debts are beyond their capacity to take on more debt and recover profitability within a reasonable time to repay their debts. Other corporate entities will recover substantial revenue streams when the recession abates and afford reasonable risks for lending them money to get beyond this recession slump in their core business. Still others whose balance sheets are only barely in the red, but whom find it difficult to get loans to move forward require only a guarantor for their short term loans from other private lending institutions. Yet, taken together, these corporations constitute the greatest threat to the American economy and indeed, the worlds' economy, as has been seen since the 1930's.

Inaction is not an option. To be fair, Democrat's claims that Republicans choose to do nothing is grossly inaccurate. Republicans would choose to allow many more corporations to fail, thus reducing the government's outlays to rescue them. However, we know that there is a tipping point wherein, if X number of corporations fail, their inability to honor their debts to other corporations cascades like dominoes, geometrically causing greater numbers of employer insolvencies, which our economy can ill afford. Just what number X actually represents, is unknownable, and hotly contested.

Just allowing Lehman Bros. to fail, nearly caused the domino effect to kick in. So, while Republicans offer an alternative plan, which does not include doing nothing, their alternative poses the greatest short term risk of corporate failure cascading, which in turn would elongate and deepen this recession. Democrats on the other hand, acknowledging they don't know what the number is that X represents, are choosing to rescue all the financial corporations, reducing or eliminating the risk of the economy entering a depression. However, this plan of action will incur enormous additions to our national debt and the interest on that debt for decades to come.

Inaction, which some more libertarian leaning voices call for, will result in a wholesale collapse of both private industry as well as federal, state, and local government revenue streams, leading to a bankrupt nation. It is not possible to say how long it would take for a bankrupt United States to get back on its feet and restore the great Middle Class which now exists, but, it would certainly take decades, if possible at all. That is not a road the majority of Americans want to travel.

Home buyers borrowed. But, home buyers seeking a personal residence, generally relied upon their lenders to advise them as to how much loan they could afford. One can blame the home buyers for not having a college degree in finance, or not understanding the real dollar impact of adjustable rate mortgages in coming years, or not being able to compute future risks and allowances, including this national recession, in their calculations. But, blaming the borrowers is an exercise in futility designed to make some feel better by assigning a target for ventilating their anger and disappointment over this recession, unless it leads this nation to educate all high school graduates in consumer finance.

Others argue that this is no time to affix blame, and that we need to focus efforts on getting out of this recession intact with a sustainable economy. While it sounds all peace and love and 'let's all just work together', the logic is seriously flawed. Affixing blame is absolutely necessary to getting out of this recession and insuring that its causes are not allowed to occur again. This crisis resulted from multiple failures in responsibility, and there is no reason to believe that those who failed their responsibilities, have suddenly and overnight, become responsible people to be trusted again with trillions of dollars.

In other words, part and parcel of our nation's recovery from this recession must include measures to insure that such failures to respond appropriately to the desires for wealth and the power are not allowed to continue to act irresponsibly, or threaten the nation's economic health in the future. From the 1930's through the 1980's, America remained economically viable by observing the hard learned lessons of the 1929 stock market crash and Great Depression that followed in the following decade.

Many measures were set in place to prevent another Great Depression including items like the Glass Steagal Act maintaining corporate separation along lines of business, and GAAP or Generally Accepted Accounting Procedures which corporations were required to observe to insure transparency and allow for regulatory oversight. In the 1990's however, much of the legal measures designed to insure against another Great Depression were either altered, or allowed to atrophy in the wake of innovative and creative measures whose purpose was to sidestep transparency and accountability in pursuit of corporate and private wealth and power.

It is therefore, absolutely essential that our federal government incorporates prophylactic measures along side rescue efforts. Blaming the borrowers meets neither of these needs, unless it leads to wholesale education in consumer finance. A workable definition for the concept of a national economy is: The design for distribution of limited resources amidst a population with infinite demand. Pay close attention to those words, 'infinite demand'. This is not a new concept or definition. The idea of individual's collective demand for goods and services as infinite is as old as the Ancient Greeks and Romans, and was very much a focal point in the writings of Adam Smith in his two great works, The Wealth of Nations and The Theory of Moral Sentiments, which many of our founding fathers deliberated upon.

If, demand is infinite and resources are finite, then it follows that lenders must undertake the responsibility for insuring the credit worthiness of their borrowers. It also follows that many borrowers will always tend to want more than they can afford, especially if their education and experience do not prepare them to accurately assess what they can afford, in the way of borrowing. We can aspire as a nation to improve education by teaching in our public schools concepts of warranted and capable borrowing. But, as long as infinite demand for more is an integral part of the nature of a nation's citizenry, the responsibility for sound lending practices lies with the lenders. When loans fail, the blame and costs should ultimately rest with the lenders, their overseers, and insurers. Attempting to recover a bad loan from an unemployed and bankrupt borrower is an exercise in futility. Blaming the borrower is simply unproductive blame shifting.

If lenders are prone to fail their responsibility, in deference to greed motivated quantity lending contrary to sound quality lending, and if a nation's economic security rests upon the results of lenders and borrowers, as it clearly does in the United States, then it is essential that our laws put in place practices and enforcements for sound lending practices. Our government is responsible for such laws and enforcements, laissez faire be damned.

There is no getting around the obligation of our governments, as representatives of the interests and welfare of the nation's people, to insure that its laws and enforcements effectively oversee, and require compliance with, sound financial practices. The primary motive for institutional lending is greed and increasing one's wealth. Greed and the desire for wealth eventually subscribe to quantity, not quality, of pursuits in lending profits. The borrowers on the bottom rung of our commercial finance industry, played a part in this financial crises. However, the responsibility clearly lies with each rung of the ladder above the first.

Posted by David R. Remer at March 9, 2009 09:57 AM
Comments
Comment #277153

This article is a laundry-list of utterly absurd statements.

First, for as long as there has been credit, a couple thousand years at least, it has been the lender who bore the responsibility for the quality of the loans they chose to issue. It is the lenders with the experience and mathematical expertise to assess the credit worthiness of potential borrowers. Not the sharecropper, cobbler, or Indian Chief. In a society which functions along lines of specialization of labor, it is the creditors specialized in assessing risk, not their potential borrowers.

Complete nonsense. As with ANY contractual agreement, each party is responsible for evaluating the cost/benefit to themselves before deciding whether or not to take on the burdens the contract obligates them to.

The creditor is responsible for his end of the agreement and the borrower is responsible for his. It’s a shared agreement and a two-way street.

What’s even worse about David’s argument is that it does not even adhere to the specious logic it sets forth.

If specialization of labor means that each party in a contract only understands (and can thus only be held responsible for) their own field of professional expertise, then banks (according to David’s reasoning) cannot be held responsible for making bad loans either.

David’s argument, if it were consistent, would hold that a cobbler, for example, does not understand finance and so can’t be held responsible for taking out a bad business loan.

What David’s argument ignores is that if “specialization of labor” really pigeonholes people into narrow fields beyond which they cannot think, then a financier doesn’t understand cobbling either and doesn’t know if he’s making a good business loan or a bad one.

The truth is much simpler and more obvious. Before entering into a contractual obligation concerning a loan, a cobbler needs to educate himself a bit about finance and a financier needs to educate himself a bit about cobbling. The same is true with anyone seeking a mortgage or anyone providing one.

Responsibility is shared. Sometimes when a loan goes bad it’s both party’s fault and sometimes it’s only one party’s fault—it depends entirely on the circumstances. It’s simplistic and absurd to claim that homeowner borrowers are never at fault.

Posted by: Loyal Opposition at March 9, 2009 11:40 AM
Comment #277154
David R. Remer wrote: Myth: Homeowner Borrowers Are At Fault - A number of folks are trying to affix responsibility for this recession and financial crisis on home buying borrowers. That is illogical, and here is why.
Some irresponsible homeowners were at fault too.

However, you are right that most of the blame lies elsewhere.
Those mostly to blame for this mess are as follows, in order of most blame to least blame:

  • (01) Some greedy banks and corporations who knew a lot of the loans were risky, and bundled up the toxic debt and fraudulently peddled it to the rest of the world. Greedy banks also hiked up interest rates on Adjustable Rate Mortgages, despite massive numbers of foreclosures (10,000 per day by AUG-2008). While banks would rather have the money (i.e. monthly mortgage payments), banks are not at all opposed to receiving foreclosed property, because they have then essentially converted money created out of thin air into real property and assets. And when the banks cash reserves fall dangerously low due to so many foreclosures, the then receive massive infusions of trillions of dollars from the Federal Reserve.

  • (02) Some greedy agents of the banks (loan officers, investors, and mortgage brokers) who wrote the bad loans, received their commissions, with no regard for the riskiness of the loans. In many cases, there was outright mortgage fraud.

  • (03) The rating agencies (e.g. Fitch Ratings Ltd., Moody’s Investor Services Inc., and Standard & Poor’s Ratings Services) who rated toxic debt as AAA securities, to pave the way to bundle up the toxic debt and peddled it to the rest of the world.

  • (04) The federal government, for ignoring many warnings, the Gramm-Leach-Bliley Act, and the SEC’s (Security and Exchange Commission) incompetence (as evidenced by many ponzi schemes; one $50 Billion dollar ponzi-scheme that lasted many years). To say Congress had its head up its butt is an understatement. Also, the federal government created the Federal Reserve (see # (05) below) in 1913, and the debt-pyramid has been growing ever larger ever since. Nation-wide debt has steadily grown from less than 100% of GDP to almost 500% of GDP, because the debt-pyramid is doomed to eventually collapse when the debt-pyramid finally becomes untenable. That’s the fate of all pyramid schemes.

  • (05) The Federal Reserve, which is essentially running a massive Ponzi-scheme, which creates money out of thin air at a very steep ratio of 9-to-1 of debt-to-reserves. Member banks receive low-to-ZERO interest loans from the Federal Reserve, and then try to loan money to everyone possible. The federal government gets 5th place, but it may possibly deserve 1st place, since the government (and voters) are ultimately responsible.

  • (06) Some home owners, who couldn’t afford the loan from the start; especially if the interest rate of the Adjustable Rate Mortgage (ARM) increased. However, the banks and their agents should know who qualifies, and who doesn’t. So the borrowers (except for some borrowers committing outright fraud) are the least to blame.

  • (07) Some voters, who fail to hold government accountable. 40%-to-50% of all 200 Million eligible voters don’t even bother to vote at all, and many merely blindly pull the party lever. Regardless of the reasons (e.g. apathy, complacency, laziness, blind partisan loyalties, delusion, greed, selfishness, etc.), there will be painful consequences. Adequate governance requires adequate voter involvement. Thus, while the majority of voters may not be directly at fault for the massive debt-bubble, voters are indirectly culpable, but allowing it by failing to hold incumbent politicians accountable. Voters should never underestimate the propensity of tenacity of human selfishness to breed corruption wherever it can find a foot hold, and grow, … , and grow, at least until that becomes too painful.

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at March 9, 2009 12:00 PM
Comment #277156

There’s still the issue of who is more responsible. Certainly that falls to the banks as they are the ones with the expertise and the ones lending the money. Homeowners can educate themselves only so much, and are subject to listening to the “expertise” of the lender. This happened to us.

We refinanced our home, and they tried hard to talk us into a ARM. I put my foot down and said no.

Good thing, because my husband has been out of work for a year.

Posted by: womanmarine at March 9, 2009 12:12 PM
Comment #277158

Looks better without the lines. WM Said “”I put my foot down “To A ARM” and said no.

Good thing, because my husband has been out of work for a year.”“”
I’m Sorry to Hear About your Husband Being out of work and You did the right thing About the ARM Nothing Better than a “women’s intuition”

Posted by: Rodney Brown at March 9, 2009 12:22 PM
Comment #277159

Loyal Opp said: “Complete nonsense. As with ANY contractual agreement, each party is responsible for evaluating the cost/benefit to themselves before deciding whether or not to take on the burdens the contract obligates them to.”

Loyal Opp, when the borrower skips with the proceeds of the loan, who loses out? The lender. Therefore, the responsibility for insuring the credit worthiness of the borrower is the lenders. You can call this nonsense if you wish, but, it does not change the reality of the relationship between lender and borrower, and their intrinsic responsibilities in that relationship. The borrower has the intrinsic responsibility to assess their own ability to borrow, ONLY if, 1) the need to borrow does not outweigh the risk of defaulting, (consider a parent with a child who will die without surgery the parent can’t afford), and 2) or, if that borrower intends to build a reputation for credit worthiness for future borrowing.

The lender ALWAYS and unconditionally carries the responsibility for determining a borrower’s credit worthiness because it is the lender who loses if the borrower is NOT credit worthy.

If you wish to introduce contract law into the equation, you then must also accept the reality of bankruptcy law which relieves the borrower of debt. Again, putting the intrinsic responsibility for credit worthiness determination upon the Lender, not the borrower.

American lenders went for the profits of lending without participating in the responsibility of lending, to determine the credit worthiness of the borrower. That is how the Wall Street investors, the Insurance companies, the mortgagors, and the credit rating agencies all, allowed this financial system meltdown to occur. They abdicated the responsibility to determine credit worthiness BEFORE extending credit to each other and consumers for home purchases.

To argue against this now historic reality defies both logic and common sense.

But, thank you for your initial knee jerk Republican apologist reaction to rush to the defense of corporate America. Such a typical response was not unanticipated.

Posted by: David R. Remer at March 9, 2009 12:24 PM
Comment #277160

d.a.n said: “Some irresponsible homeowners were at fault too. “

Yes, and to quote in agreement with you from the last paragraph of the article: “The borrowers on the bottom rung of our commercial finance industry, played a part in this financial crises. However, the responsibility clearly lies with each rung of the ladder above the first.”

The issue is one of responsibility, ie. ability to respond appropriately. One can blame home buyers, but the responsibility for assessing their credit worthiness rested with the lenders, insurers, credit rating agencies, and marketers of asset back securities.

Their pursuit of quantity based profits instead of quality, combined with their abdication of their responsibility is what created the meltdown, not the home buyers who subsequently lost their jobs, or found their mortgages upside down, higher than the property was worth, or those who, as any of us would, experienced a medical emergency which drained their funds and which superceded repayment of the mortgage as a budgeting priority.

Posted by: David R. Remer at March 9, 2009 12:31 PM
Comment #277161

womanmarine, quite right, and why America needs to incorporate consumer finance education into every high school curriculum. We are after all, the largest consumer nation on earth. It is absurd to create the largest consumer nation on earth and not teach the population consumer finance principles and responsibilities.

Somewhere along the way, you acquired some sound information about potential pitfalls of A.R.M.s, and that is to your credit. (No pun intended).

Posted by: David R. Remer at March 9, 2009 12:35 PM
Comment #277162

Loyal Opp’s faulty logic continues, saying: “If specialization of labor means that each party in a contract only understands (and can thus only be held responsible for) their own field of professional expertise, then banks (according to David’s reasoning) cannot be held responsible for making bad loans either.”

The specialized education of bankers, Loyal Opp, is lending, which includes risk assessment of borrowers, actuarial statistics and application, laws applicable, and industry and economic trends that could affect their profitability. That is all included in the specialization category called banking.

Here is a reading list of the philosophy and industrial applications of the theories of specialization of labor.

Your comments would be well served by some of these writings if attempting to broach this subject in the future. So, far, your comments only demonstrate a black hole of information on the topic.

Posted by: David R. Remer at March 9, 2009 12:43 PM
Comment #277172

I think many of you are missing the real point behind lending and borrowing for whatever purpose. The government, rightly or wrongly, has worked mightly to instill a dependency on government feeling in the public. Goverenment regulates every thing from how many stitches on a baseball to how many and what kind of ants you can carry back home from Pago Pago. Therefore, people, rightly or wrongly, go into some deals thinking that if the government approves them they must be reliable and above board, etc. Unbeknownst to the public, there has been a myriad of deregulation in backwater issues going on for about 20 years. For instance, if we had a usury law that would have limited most of the CC debt and defaults. Frank, Dodd and others are directly responsible for much of the consumer debt problems but like Phil Gramm and others they will never receive so much as a reprimend.
Again, thats why we need accountability in government. Little to nothing will change until that happens. Sure there is culpability with the public and as long as they rely on government for the straight skinny they will keep getting burned.
I remember the government pushing housing as ‘the great Americaan dream”.

Otherwise, we have the government we deserve.

Posted by: Roy Ellis at March 9, 2009 01:19 PM
Comment #277173

David R. Remer

If you went to the bank and borrowed $5000 on your signature and then refused to repay the bank, do you think not think you would be sued and the suit upheld in a court of law?

Posted by: Doubting Thomas at March 9, 2009 01:32 PM
Comment #277174
But, thank you for your initial knee jerk Republican apologist reaction to rush to the defense of corporate America. Such a typical response was not unanticipated.

What defense of corporate America?

I said very clearly that responsibility is shared. You are the one making a simplistic black-and-white argument in which one side is totally to blame and the other side is an innocent victim. It’s bad enough to present illogical and absurd arguments without falsely characterizing the arguments of others.

“Such a typical response was not unanticipated.”

Posted by: Loyal Opposition at March 9, 2009 01:46 PM
Comment #277175

Roy said: “I remember the government pushing housing as ‘the great Americaan dream”.”

The idea of owning a home as part of the American Dream is NOT incompatible with a mortgage and lending industry which exercises due diligence and responsibility in determining credit worthiness, both when lending to retail consumers as well as other financial institutions.

Oversight, regulation, and transparent accounting procedures are mandatory where greed is the primary motive of for profit organizations in dealing with consumers, whether those consumers be retail of other for profit organizations.

The dirty little secret Wall St. doesn’t want to let out, is that they engaged in cannibalism, deceiving each other, ripping each off, and leveraging ‘deals’ to each other through the credit default swap markets in wholly unsustainable fashion.

Whether that cannibalism took place due to diners being unaware of the source of the meat (great deals), or whether they fully recognized their mutual vulnerability in transacting business through real estate asset backed securities, is very much a raging debate amongst insiders and forensic economists, currently. But, the clearly fed on each other’s leveraging, and that house of cards was doomed to collapse sooner or later in response to one of many potential triggers. The end of the property value bubble just happened to be the trigger in 2007.

Posted by: David R. Remer at March 9, 2009 01:48 PM
Comment #277176

Loyal Opp, you need to stop equating blame and responsibility as synonyms. They aren’t, and hence, are causing your read of the article to result in faulty comments of logic.

Responsibility is the ability to respond appropriately. Blame is affixing causal blame for some negative outcome.

You can blame home borrowers till your blue in the face, it won’t change the fact that lenders were responsible for determining credit worthiness before lending, and CHOSE not to be.

Whereas the vast majority of home buyers believed they could and would be able to afford the homes they bought, based on their education in finance (little to none) and reliance upon lender’s assurances that the specialized language in the mortgage contract would permit them to afford the home.

Lenders, CHOSE not to be responsible. Buyers thought they were being responsible as far as they could tell.

When logic combined with accurate reality based information fail to persuade, one must look to a motive other than a willingness to accept reality and learn from it.

Posted by: David R. Remer at March 9, 2009 01:57 PM
Comment #277178

Doubting Thomas asked: “If you went to the bank and borrowed $5000 on your signature and then refused to repay the bank, do you think not think you would be sued and the suit upheld in a court of law?”

First, the question assumes, in the context of the current article topic, that home buyers had a choice about repaying. A great many did not and still don’t as unemployment eliminates millions from the option of repaying.

Second, yes, the lender may sue, but, if the borrower is broke or bankrupt, what is gained by suing? Lenders have the responsibility to insure the credit worthiness of buyers. There is no getting around this simple fact of real life.

Third, I have to ask the question, Do you not think lender’s have a fundamental responsibility to their shareholders to determine the risk a particular borrower poses before making a loan, as opposed to relying on the courts after the fact of default?

I have to ask that, because whole corporations like CountryWide were built on the practice of disregarding credit worthiness as the core of their business. Which constituted an open invitation to unreliable very high risk borrowers, such as the 10’s of thousands speculative buyers who held and sought more than one mortgage to profit from the real estate valuation bubble. Needless to say, CountryWide is bankrupt. As are a number of mega financial institutions relying on paper generated by corporations like CountryWide who loaned money to CountryWide.

Posted by: David R. Remer at March 9, 2009 02:08 PM
Comment #277179

Remer writes; “If, demand is infinite and resources are finite, then it follows that lenders must undertake the responsibility for insuring the credit worthiness of their borrowers.”

As a former personal finance manager I loaned out many millions of dollars to individuals. I was trained in the three “C’s” of lending; Character, Capacity and Collateral in order of importance. And, I do agree with Remer that it is the responsibility of the lender to assess the risk when lending money.

While I was lending stockholder money, banks are loaning depositor money which requires even more careful assessment.

I would like to take Remer’s argument a step further and apply the principles of finance to government. If, as Remer writes, “demand is infinite and resources are finite” then it becomes the responsibility of government to carefully weight those infinite demands as they are using finite taxpayer dollars to meet those demands.

Are PO and congress carefully weighing and choosing the most pressing infinite public demands for their spending guidelines? Some liberals say that all public spending, including that which is clearly “pork” is good and wise. I would disagree.

We must hold our government to the standards which we wish to impose upon our lenders; that being for government, reasoned and targeted spending in the least amount to accomplish the greatest good.

Posted by: Jim M at March 9, 2009 02:14 PM
Comment #277181

Loyal Opp said: “I said very clearly that responsibility is shared.”

In practical reality based dollar and cents terms, how can consumers be held responsible for the complex terms of a mortgage contract when the majority of consumers have no consumer finance education? Do they understand that their principal balance will not decrease substantially for the first 10 years of a 30 year contract, and are they educated in contingency financing and budgeting to allow for that fact? When told under an ARM, that they will never have to pay terminating high rate in years 4 - 30 because they will want to refinance before then, are they responsible for believing what they are told? Are they responsible for failing to consider that a Recession might throw them out of employment and therefore should not engage in any long term consumer financing at all?

Posted by: David R. Remer at March 9, 2009 02:19 PM
Comment #277182

David R. Remer

First, My response assumes that when you recieved the loan from the bank that you had a job or other means to repay. The same assumption could be made of a mortgage receptiant. If your situation changes, It doesn’t remove your responsability to repay.

Second, If you are sued and a judgement is rendered against you and you are broke or/and unemployed, the bank can and often will sieze other assets you have. It does not relieve you of your responsibility

Third, Absolutely they have a responsibility to their shareholders to determine your creditworthiness before granting you a loan. The courts are and should be the last effort to collect a debt, However, it still don’t relieve you of the responsibility to repay.

Posted by: Doubting Thomas at March 9, 2009 02:27 PM
Comment #277183

Jim M said: “If, as Remer writes, “demand is infinite and resources are finite” then it becomes the responsibility of government to carefully weight those infinite demands as they are using finite taxpayer dollars to meet those demands.”

Absolutely right! And we voters are responsible for holding them accountable to this manner of running of government. When in times, absent national emergency or crisis (2003 - 2007 for example), our government officials choose to rack up deficits, voters have only themselves to blame for electing and reelecting those officials.

Jim M said: “Some liberals say that all public spending, including that which is clearly “pork” is good and wise.”

As do Republicans like Rep. King of N.Y. who just last Friday on TV said he, as a representative, has an obligation to impose earmarks upon the budgeting process, and he insists he can defend every dollar of the large earmarks in this Omnibus bill from last year’s budget.

This is not a liberal vs. conservative issue, Jim M. Republicans defend openly their right to bring home the bacon from the federal appropriations process, just as many Democrats do.

Posted by: David R. Remer at March 9, 2009 02:31 PM
Comment #277184

Doubting Thomas said: “However, it still don’t relieve you of the responsibility to repay.”

But, the bankruptcy courts do. And you are wrong about broke borrowers being responsible to repay nonetheless. The real definition of responsibility is “ability to respond appropriately and doing so”.

If a borrower has lost their income, their ABILITY to respond appropriately is gone. Ergo, by defintion, they are no longer responsible to repay the loan. This principal definition is canonized in our laws establishing bankruptcy courts and the outlawing by our civilized nation of debtor prisons, once commonplace.

You can reject reality if you wish, but, reality remains, nonetheless, real.

Posted by: David R. Remer at March 9, 2009 02:34 PM
Comment #277185

I guess I want to interject some old fashioned libertarian ideals here,

ala Bill Shakespeare:

Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
This above all: to thine own self be true,
And it must follow, as the night the day,
Thou canst not then be false to any man.

In some cultures charging interest is usury.

There was a time when one actually built his own house. It was part of the skill set of being independent.

Practical today? Maybe not. But it is good to remember a time when one’s abode was humble and functionary rather than stylish and a status symbol. I wouldn’t mind seeing a reset of those values.

Posted by: gergle at March 9, 2009 02:36 PM
Comment #277186

David R. Remer

“The real definition of responsibility is “ability to respond appropriately and doing so”.

Wrong. I don’t know where you got that definition, but The American Heritage Dictionary defines responsibility as follows:


(rĭ-spŏńsə-bĭĺĭ-tē) - 2 definitions
The American Heritage® Dictionary
responsibility (n.) The state, quality, or fact of being responsible.
responsibility (n.) Something for which one is responsible; a duty, obligation, or burden.

And as a further note, Bankruptcy courts very often will make you sell other assets to repay a loan. If you have no assets, everyone involved loses. That in no way puts the responsibility on the lender.

Posted by: Doubting Thomas at March 9, 2009 02:48 PM
Comment #277187

Remer writes; “This is not a liberal vs. conservative issue, Jim M. Republicans defend openly their right to bring home the bacon from the federal appropriations process, just as many Democrats do.”

Clearly a false statement as Remer equates Republican to mean conservative. That some R’s are liberal and some D’s are conservative is factually true. That all R’s are conservative is, as evidenced by your own writing, not true.

Posted by: Jim M at March 9, 2009 02:54 PM
Comment #277189

David R. Remer

Another not about bankruptcy. I never said you can’t be relieved of your responsibility to repay the loan. That is a seperate action and is subject to the courts disgression.

Posted by: Doubting Thomas at March 9, 2009 02:58 PM
Comment #277190

Jim M said: “Clearly a false statement as Remer equates Republican to mean conservative.”

Clearly, a gross misconception by Jim M since Republican party candidates are the candidates which MOST self-declared conservatives vote for. Thus, in practical terms when discussing our two party government, the Republican Pary is the Conservative Party, and vice versa.

I understand your need Jim M, to neatly segregate conservatives from Republicans, since so many Republicans turned out to be disasters to so many conservatives. But, hey, conservatives voted Republicans into office, hence there is no merit to attempts to segregate conservatives from Republicans.

Unless one wishes to remove this discussion from government altogether, and talk about Libertarians, with their minority voter support in elections. But, then you are talking politics, not governance. There are no Libertarian candidates elected to Congress.

Posted by: David R. Remer at March 9, 2009 03:12 PM
Comment #277191

gergle writes; “There was a time when one actually built his own house. It was part of the skill set of being independent.

Practical today? Maybe not. But it is good to remember a time when one’s abode was humble and functionary rather than stylish and a status symbol. I wouldn’t mind seeing a reset of those values.”

I am not a carpenter and until 17 years ago had never built anything more complicated that a tree house platform.

One of my life goals had been to build my own home. My work situation and finances 17 years ago were such that I had the time and strength and money to build my own home. My first task involved clearing a space on my 20 acres for a home site. I didn’t pour the slab myself or do the drywall or carpet laying, but did everything else.

I bought some good framing and carpentry books along with wiring and plumbing books and a few power tools. It took me nearly a year to finish the home and I commuted 120 miles each day round trip from our previous residence to the home site.

I can tell you that few things I have done in my life give me as much pleasure and satisfaction as lying in my bed at night in the upstairs bedroom during a heavy thunderstorm and feeling warm, safe and dry in the “House that Jim built”.

Since then I added a 2 1/2 car garage and a room to connect the garage to the house all of which I also built myself. It is still hard to believe that the home and attachments I built with my own hands is still standing and insured now for over $200,000. It is just amazing what a man can accomplish if he has the desire and determination. I must also add…that God had no small hand in my success as He constantly answered my prayers during the construction in times of doubt and danger.

Posted by: Jim M at March 9, 2009 03:12 PM
Comment #277192

gergle, all the laws, ordinances, and financing industry preclude one from sensibly building their own home, today. I know, I built my own home from the foundation up with no contractors whatsoever, save the septic tank installation.

I funded the building which took 10 years to complete, partly with credit cards and the rest with and incoming cash flow. I did not save anything due to the credit card companies jacking up the bait and switch interest rates. Only two of them got a away with it, as I closed accounts as the old bait and switch routine came into play.

Insurance on an owner built home is 3 times that of a contractor built home. And good luck finding a jurisdiction that would even permit one to build one’s own house. My county does, (which explains why I live in Texas), but very, very few others do and of those, most are not near metropolitan employment centers.

If I had it to do over again, I truly do not know if I would elect to do so again. There were tremendous intangible benefits, though. The psychological benefits of such a complex undertaking and mastery of so many specialized skills, are hard to measure in dollars and cents, but have to be included in the benefits column.

Posted by: David R. Remer at March 9, 2009 03:20 PM
Comment #277193

Doubting Thomas said: “Another not about bankruptcy. I never said you can’t be relieved of your responsibility to repay the loan. That is a seperate action and is subject to the courts disgression.”

Thank you for conceding the debate.

Posted by: David R. Remer at March 9, 2009 03:22 PM
Comment #277194

Sadly, Mr. Remer simply doesn’t have the honesty to admit there is a difference between party and philosophy.

Using Remer’s logic, all the various churches under the banner of Christianity are the same. Could anything be further from the truth? Put a Baptist in the same room with a Catholic and you will soon see spirited differences in religious belief while both will claim adherence to the same Savior.

Put a liberal R or D in a room with a conservative R or D and you will see and observe the differences that that Remer denies.

That conservatives voted for Bush or McCain is a no-brainer. That some democrats successfully ran as conservatives to defeat liberal republicans is a no-brainer as well. Simply lumping most voters into two camps, without acknowledging huge differences in those individual camps is silly.

Posted by: Jim M at March 9, 2009 03:27 PM
Comment #277195

David R. Remer,

I never conceded anything. I stated that bankruptcy is a seperate issue to be decided by the courts.

It’s very convenient for you to ignore my basic challenge of your definition of responsibility and focus on my note about bankruptcy. Is this a common tactic of yours?

Posted by: Doubting Thomas at March 9, 2009 03:30 PM
Comment #277196

Remer wrote; “Insurance on an owner built home is 3 times that of a contractor built home. And good luck finding a jurisdiction that would even permit one to build one’s own house.”

While that may be true for him, and I don’t know why, it certainly has not been true for me. I have had only two different home insurers since I built my home and neither one cared one whit that I built it myself. My current insurer is Allstate because they had the lowest rates and best coverage from among the five insurers I was considering. Both insurers sent company reps to my home to inspect the inside and outside, take photos, and determine the current value upon which they determined the amount of coverage I must carry to secure a policy with them.

Posted by: Jim M at March 9, 2009 03:35 PM
Comment #277197

Jim M said: “Sadly, Mr. Remer simply doesn’t have the honesty to admit there is a difference between party and philosophy. “

Yep, I know why it is sad. Because the majority of voters like me voted to remove conservatives and Republicans from office in 2006 and 2008, failing to distinguish between the two.

People when given a choice between words and behavior, will choose behavior. Conservatives voted for Republicans. This behavior dictates that the Republican Party is the conservative’s political choice. Pres. Bush ran as a conservative and won, and then promptly proceeded to govern regardless of ideology. And conservatives reelected him. What conservatives do speaks far louder than what conservatives say.

I am of course discussing voters and the real world of governance. If you want to divorce the debate from the real world, then I will accede that in the academic world, there is a debatable difference between conservative ideology and the ideology of most Republicans elected in Congress which one can only gather from their actions in Congress.

But, that is akin to saying true Ferries have white wings of gossamer. It is a true statement only in the fantasy world one invents to make it true.

The Libertarians Party is where academic conservatives are drawn, because there, ideology is more important than winning elections and reelections. And they can’t win elections at the federal level because their ideology makes no sense to the voting majority.

Those conservatives who support Republican candidates subscribe, wittingly or not, to the Republican ideology, which is winning election is more important than applying conservative ideology to governance.

Nope, I see no difference at all between Republicans and conservatives who vote Republican. They share the same top priority in their ideology, winning elections.

The same is true, I might add, of liberals and Democrats. No fundamental difference between liberals who vote Democratic and the Democratic Party, ideologically. To find true adherents of liberal ideology, one has to go to the Green Party, where winning is not the governing ideology.

Posted by: David R. Remer at March 9, 2009 03:52 PM
Comment #277198

Jim M said: “I have had only two different home insurers since I built my home and neither one cared one whit that I built it myself.”

Well, either the agent did not ask when it was built and by whom, a dereliction of responsible insurance practice, or you failed to tell them that you built the house yourself and were not a licensed contractors, or, you did in fact hire contractors to install your electrical and plumbing for example.

The risk to insurers of owner built homes who are not licensed contractors, is perceived to be substantially higher and historical actuarial charts demonstrate this. Unlicensed electrical installation poses a higher risk of fire and a claim to the shareholders of the insurance company.

In addition, I can irrefutably say that your insurers are NOT aware that your house was built by an unlicensed owner/builder. Look up the word, “subrogation” Jim M. The law does not allow insurance companies to subrogate against the homeowner with the policy.

I worked as an insurance claims adjuster for a homeowener’s insurance company for five years, and can speak from first hand industry experience, that NO insurance company is going to knowingly abrogate their subrogation rights without charging a substantially higher premium. That is an empirical fact verifiable by asking any insurer or homeowner’s claims adjuster.


Posted by: David R. Remer at March 9, 2009 04:00 PM
Comment #277200

Doubting Thomas said: “I never conceded anything.”

Sure you did, when you then said: “I stated that bankruptcy is a seperate issue to be decided by the courts.”

Which of course it is not. Our bankruptcy laws define in the real world the term ‘responsibility’ in the context of those who are broke and default on a loan. There are general definitions which you can pull from Webster’s, and then there are the more specific definitions defined by the real world of the specific.

Additionally, aren’t you even the least bit curious by the OBVIOUS fact that the word, responsibility has, as its roots, the two words, ‘ability’ and ‘respond’? Does it not occur to you that the roots of a word contain the original intent and definition? Does the word, etymology ring any bells?

You may not wish to acknowledge it, but, when one resorts to declarative statements which are obviously untrue, in order to salvage their argument, they in fact, concede the debate to their opposition.

Again, I thank you. It was enjoyable, though brief.

Posted by: David R. Remer at March 9, 2009 04:15 PM
Comment #277201

Jim M, good on ye! I think most states these days would not allow you to do any work that requires certified labor skills such as plumbing, electric and carpentry. The county I live in Va. did allow my son to act as the general contractor as he purchased a modular home. But, the work had to be done by qualified/certified folks.
I think thats a shame for rural parts of the country. I can understand it for big developments or where the looks of a house effects the value of homes nearby.
I put this inflexibility under the heading of ‘having too much democracy.’ Wheras, it might be ok where you’ve signed you rights away with an HMO, are in a big city, but not ok for a hayfield in the country.

Posted by: Roy Ellis at March 9, 2009 04:15 PM
Comment #277202

Roy, yes, and good point regarding the difference between a private residence and public building.

The law should extend to insure safety and compliance where public buildings and constructions are concerned. However, with, private residences, one can make a logical libertarian argument for government introducing itself only to the legal requirement of full disclosure, should an unlicensed owner/builder seek to sell their owner/built home, making it a fraud to sell such a house without such disclosure. Then, the buyer can protect themselves either by refusing to buy the home or hiring an inspector to verify code compliance was observed in the construction.

I built my house entirely to Southern Building Code specs, or beyond. If I choose to sell it, I would foot the cost of compliance inspection for a potential buyer. That is the responsible thing to do.

Posted by: David R. Remer at March 9, 2009 04:30 PM
Comment #277204

Remer proudly writes; “People when given a choice between words and behavior, will choose behavior.”

Obama ran on words and was elected. McCain ran on experience and was not elected. I believe that behavior is a result of, and expression of, experience.

It always tickles me when Remer bristles at being though of as a big-spending, taxpayer dollar-wasting liberal, but by his own definition, he voted democrat and thus voted for liberalism and all they espouse.

I read today that PO has even managed to enrage the Brits by his latest actions. I fear that Potomac Fever has robbed PO of his mental faculties and await Mr. Biden’s ascension to that highest office as PO appears to be incapacitated. Those minions covering for his outrageous recent actions tell us that the poor man is just tired. It is apparently a bigger strain than he imagined to run a country. Better he go back to Chicago and run a welfare program which matches his experience, proclivity and expertise.

Posted by: Jim M at March 9, 2009 04:39 PM
Comment #277210

Jim M, I voted for THIS democratic president named Barack Hussein Obama. That is not the same as the implication in your statement, that I voted Democrat, which implies that I voted for Obama BECAUSE he was a Democrat. Which I did not.

Once again, your comment’s logic fails. Nice try though at the labeling the messenger instead of critiquing the messenger’s message.

Jim M said: “It always tickles me when Remer bristles at being though of as a big-spending, taxpayer dollar-wasting liberal,”

As for bristling at what you think of me, again, your comment fails to observe the obvious.

I don’t participate here with my perspectives and arguments in an attempt to win everyone’s approval. That should be obvious to you by the ratio of approval comments to counterpoint comments I receive in nearly article I write. But, then, the empirically observable is not always the foundation for your comments, are they?

Posted by: David R. Remer at March 9, 2009 05:27 PM
Comment #277215

David R. Remer,

Nowhere in your original post did you mention bankruptcy. Are you trying to expand your article now that you are challenged? I say again that bankruptcy is a seperate issue and is determined by the courts.

I did a quick search fot the definition of “responsible” and “responsibility” in both the U.S. bankruptcy and Virginia’s bankruptcy laws and I can’t find it defined anywhere in them. Maybe you can post a link to it or at least quote it.

That leaves the dictionary definition and your definition. I’ll take the dictionary definition.

As for etymology, I did a little research on the word responsible and it seems it’s not so OBVIOUS that it came from the two words ability and respond.

From Online Etymology I found this:

“responsible
1599, “answerable (to another, for something),” from Fr. responsible, from L. responsus, pp. of respondere “to respond” (see respond). Meaning “morally accountable for one’s actions” is attested from 1836. Retains the sense of “obligation” in the Latin root word. Responsibility is from 1787.”

” may not wish to acknowledge it, but, when one resorts to declarative statements which are obviously untrue, in order to salvage their argument, they in fact, concede the debate to their opposition.” I’ll agree with this statement that you made. Maybe you should do more research next time.

Posted by: Doubting Thomas at March 9, 2009 06:26 PM
Comment #277223

David,
Thanks for this article and it’s statement:

In the 1990’s however, much of the legal measures designed to insure against another Great Depression were either altered, or allowed to atrophy in the wake of innovative and creative measures whose purpose was to sidestep transparency and accountability in pursuit of corporate and private wealth and power.

If, in fact the measures were altered and accountability were pushed aside, it is our/the voters responsibility to hold these individuals, entrusted to protect this country and given generous status, to account.

It cannot be the homeowner, the lender, the Wall Street financier because they were working under the law. It must not be a person whose criteria is met with a (D) or an (R) affixed to their name.

The Act, it should be noted, passed the House by an overwhelming majority and passed by unanimous consent in the Senate, though it was introduced on the last day before Christmas holiday and never debated by either congressional body. [11]

The Washington Post in 2008 named Gramm one of seven “key players” responsible for winning a 1998-1999 fight against regulation of derivatives trading.[12] Gramm’s support was later critical in the passage of the Commodity Futures Modernization Act of 2000, which kept derivatives transactions, including those involving credit default swaps, free of government regulation.

It must be a vote that affixes blame. It is the person who voted along with Phil Gramm who should be held accountable and their position of trust taken from them and the benefits of that trust confiscated. One by one, each state must be addressed and educated as to their elected official’s action and a moral imperative be instilled in their electorate as to the reason why their senators and representatives should pay a price for their reckless mistake.

Posted by: Weary Willie at March 9, 2009 07:26 PM
Comment #277226

Et All:
Excellent debate for it does show how litte is known by the average citizen on what truely happened to the Cash Cow that the Democratic and Republican Civil, Political, and Religious Leaders are in chrage of protecting.

David,
Why I agree that the average homeowner is not to blame for the mess we find ourselves in. I also recognize that many Brokers and Vagabonds took advantage of the housing programs and low interest rates to leverage self-profits. For from zero down to flipping a house for quick profit I do believe that if you look deeper into the issue that you will find that “The Margin Call” or assets needed to support such an adventures were never shown to exist by the Bankers or Vagabonds. And why the fault begins with Congress not limiting the housing programs to Low and Middle-Income First Time Homeowners in exchange for Sweat Equity or Public Service IMHO. I can point to a direct connection between the SEC not calling Market Margin Loans and No Money Down Stock Purchase as the reason the Banks no longer have the Capital Assets to cover the short and long term effects of Home Loans. Because how can a Bank loan you the money to buy their stock with No Money Down or a Margin Call and still have the money of such profits to loan you more money to buy a house. At some point the bucket becomes empty does it not?

Loyal Opposition,
In America, the Lender assumes full responsibility for the actions of the Loan. Hence, the reason they can call a loan at any moment and for any reasonable reason. For a loan is given in the Hope of Repayment thus allowing interest to be charged to cover the risk of Non-payment, Death, or other unforeseen conditions. Now, “We the People” could change that argument; however, I do believe that history will show us why we shouldn’t. Since I do believe that if one writes a loan so that repayment in mandated at any cost that they would find themselves without a sellable product and service.

Now, you can make a loan on “Good Faith” which does require both parties to agree to certain favorable and unfavorable conditions; nevertheless, the Lender in the Eyes of Government and Society accepts full responsibility if the worse outcome comes to pass. For example; your cobbler can get a loan from a Bank, Family, Friends, etc. and say he can repay the loan by increasing his accounts receivable and increased in store sales. And at the time of conception the Lender can accept, deny, or regulate the terms of payment and remedy methods of the loan. However, if the Clobber extends credit to a Consumer and the Consumer fails to repay the company which in turns makes it impossible for the Clobber to meet the conditions of the loan than why shouldn’t the Lender be able to have the Authority to call the Loan?

Now, reverse that argument and you will see why the Homeowner is not at fault of the decreasing Home Prices that has lead to many of them defaulting on their loans. For how can the Average Home Owner be responsible for the B.S. manner that Banks and others in Government and Society assign values to Assets and Liabilities? Give “We the People” that power and I’ll tell you that My Tent is worth $20 trillion under an Act of God.

Roy,
Why I am limited to my personal opinion on the subject I do believe that President Bush thought he was doing the Right Thing when he allowed the sale of ARMS. For if the Federal Reserve would have been allowed to raise the Prime Interest Rate to 5% and the Landers would have kept their Loan Interest Rates the same over the next 5-10 years I do believe that Americas’ Government could have begun to pay down the national debt and thus in turn increase the Value of the Average American Home. For why the Government did or does (not sure of current standing) believe that the best way to Trickledown the Wealth of America is though Home Ownership. As an American Layman Citizen, I do not want to believe that somehow the President of the United States of America would use their power of office to willfully conspire with the Forces of the Market to strip the Average American of the Wealth of their Ancestors.

Doubting Thomas,
Why the Courts of Law may hold up the suit I still am not required to repay it if I can prove that in doing so would cause undue hardship. Hence, the same Domain covers the Logic and Reason why Corporations do not have to repay their Stockholders for losses or worse.

Jim M.,
Excellent Point; however, (and don’t ask me to explain it) unlike the Bank and the Lender Americas’ Government is not bound by Infinite Demand and Finite Resources. Limited Resources absolutely, but through Knowledge and Wisdom “We the People” can expand the Pie just as our ancestors has been able to expand the yield of crops on an acre.

Now how does President Obama, Congress, and the Market Leaders use that ability over the next 4 years depends on folks like Newt GinGrich who is calling for a 3rd Generational Summit to begin now instead of waiting for 2012. For only by building a Better World than the Youth of the 60’s and Silver Spoons of the 70’s can My Peers and Their Children stand up to the weight of Government and Society.

Posted by: Henry Schlatman at March 9, 2009 07:38 PM
Comment #277227

Here Remer gives two choices, “or, you did in fact hire contractors to install your electrical and plumbing for example.”

I used a 3rd way which apparently escaped Remer. When I had completed the electrical and plumbing I had it inspected by persons licensed in both.

I might add that in the years since I built my home I have visited contractor homes being built. If anything, I overbuilt my house. My brother-in-law upon seeing the insulation commented…”You can heat it with a candle and cool it with an ice cube”.

I will remain suspicious of Remer’s claim to know everything about homeowner’s insurance as he made claims as a financial expert, in a previous post, which I also question.

One should be very cautious of the person who knows something about everything but….(well, you know the rest).

Posted by: Jim M at March 9, 2009 07:51 PM
Comment #277228

Weary Willie, while I agree with the direction of your comment as having some logical merit, I have to disagree with you regarding “It cannot be the homeowner, the lender, the Wall Street financier because they were working under the law.”

The lender and Wall Street, regardless of legal requirements, had a fiduciary duty and obligation to their shareholders to NOT leverage by such large multiples as to fail in the event of a recession or real estate bubble bursting. Those corporations which have failed or been forced to sell into mergers or to the tax payer trough to remain in business, failed their fiduciary duties and obligations which require that management conduct their business with anticipated or obvious adverse contingencies prepared for.

If one listens to the Wall St. apologists, one would think that Wall St. hadn’t a clue regarding the leveraging or the real estate valuation bubble. Unfortunately for these apologists, there is ample evidence and documented warnings of these contingencies and the Wall St. firms ignored them entirely, even when the stats were part of their normal information base for operations.

Yes, no question, government failed in its oversight responsibilities to insure fair, accountable, and transparent commercial transactions. But, this does not diminish the corporation’s fiduciary obligations to their shareholders, nor the shareholders and boards of directors from their oversight and review obligations.

The notion that government, corporations and consumers are adversaries, has some very real negative consequences as an ideology. It prefaces their pulling in different directions, as opposed to pulling together to meet overarching objectives like a stable, viable, and over the long term, prosperous economy to be shared in by all.

This is the difference between greed and enlightened self-interest which Adam Smith contrasted a couple centuries ago.

And as I see modern politics through Adam Smith’s perspectives, this marks a significant philosophical difference between the Republican and Democratic Party ideology.

The GOP presumes the competitive and often adversarial relationship between government, business, and the consumer. The Democratic Party presumes a cooperative relationship between these as essential to economic health.

This difference generally, and peculiarly since few voters have read Adam Smith, does not go unnoticed by voters either, as voters tend to vote Democrat during difficult economic times, and Republican during prosperous times.

Prosperous times times give the GOP’s anti-tax ideology some footing by the greedy, and recessionary times give Democrat’s enlightened self interest ideology (as in the greatest good for the greatest number for the longest period) ideology some footing by those witnessing an undermining of economic stability.

Posted by: David R. Remer at March 9, 2009 08:18 PM
Comment #277230

Doubting Thomas said: “Nowhere in your original post did you mention bankruptcy.”

But I did mention the core concept behind bankruptcy law, that broke and bankrupt borrowers are not able to respond to demands to repay, and by the definition of being unable to respond, they are not responsible (from the words able and response) to repay.

Guess you missed the connection. Bankruptcy was raised by me as a legal foundation example of the veracity of my claim that those who are bankrupt no longer have the ability or responsibility to repay.

I am aware that Republicans reformed the bankruptcy laws to conform to their ideological position that bankruptcy does not absolve the poor from their defaulted loan obligations. Even as Republicans retained absolving businesses from creditor obligations. But, that hypocrisy will not stand as anything but a short lived aberration in history under the GW Bush presidency and Republican Congress.

The bankruptcy concept was cemented as Just and appropriate by the abolition of debtor prisons and generational indentured servitude. Republicans began to reinstate policy in those directions, but, quickly afterward lost out to Democratic governance. Not surprising given the direction the economy and unemployment were headed. Voters knew which side of this issue was the intuitively correct one for their future.

Posted by: David R. Remer at March 9, 2009 08:31 PM
Comment #277231

I’m asking the question:
Who is to blame? The answer, history proves, are the representatives who changed the law. It’s that simple. To cloud the issue with Wall street’s ignorance of what was happening is moot because it was legal. To blame the homeowner is also moot because it was legal. Whether the vote was cast by a Democratic or a Republican is moot because both parties shared the responsibility.
Your latest response ignores the individual who voted for this Act. Why must blame be broadcast amongst this or that party and in so doing, dilute accountablility?


Posted by: Weary Willie at March 9, 2009 08:35 PM
Comment #277233

Jim M said: “I used a 3rd way which apparently escaped Remer. When I had completed the electrical and plumbing I had it inspected by persons licensed in both.”

What state do you live in Jim M. so I can check the veracity of your claim? And please, tell me, about how long did the electrical inspection take and how thorough was it?

Lastly, regardless of whether inspectors inspected, no insurance company would insure it at standard rates due to their subrogation rights.

Guess you didn’t look up the term. And hence, are not aware of the catch-22 your comments have painted themselves into.

Posted by: David R. Remer at March 9, 2009 08:36 PM
Comment #277235

Weary Willie, as I advised someone else further back in the comments and as I wrote at the end of the article, which you seem to have forgotten or not read:

The borrowers on the bottom rung of our commercial finance industry, played a part in this financial crises. However, the responsibility clearly lies with each rung of the ladder above the first.

If you want to blame borrowers who lost their jobs and thus were unable to honor their mortgage, that’s fine. But, they are not responsible for the foreclosure if they weren’t fired, but instead, laid off by the recessionary contraction in consumption. And their are millions of American workers who have been put into that category of not being responsible for their foreclosure as this recession continues.

Foreclosures are not the cause of this economic downturn, they are a consequence of it. Hence defaulting homeowners are not the cause of it either, but a consequence of it. This economic downturn began at the asset level of corporation’s balance sheets in the context of the real estate valuation bubble bursting. This cause, and therefore the responsibility for this economic downturn does not rest on home loan borrowers. For this and other reasons I outlined above.

You can blame them if you wish. But, they are not responsible for this economic downturn. Their ability to avert it, never existed.

You are making the same mistake someone else made above, in reading the words blame and responsibility as synonymous. They aren’t.

Posted by: David R. Remer at March 9, 2009 08:50 PM
Comment #277236

David R. Remer

Bankrupty is not what your post is about. and I have debunked your claim of responsible meaning able to respond with the Etymology reference. (I think you tend to ignore what you don’t want to see.) It seems to me that you are really reaching to keep from admitting that you are wrong.

I won’t debate you any more on this issue since you can’t do so honestly.

Posted by: Doubting Thomas at March 9, 2009 08:52 PM
Comment #277237

David,
Below are quotes from my previous responses. Perhaps you have me confused with another. I am not blaming the homeowner, nor the wall street type. I’m blaming the politician that voted Yea for the Act that you claim is the foundation of this this fiasco. The politicians responsible knew better, and I believe was a calculated effort to rip off the accumulated wealth of 3 generations of the American Public. The politicians responsible for this fiasco should be relieved of their position and status.

To blame the homeowner is also moot because it was legal.
It must be a vote that affixes blame. It is the person who voted along with Phil Gramm who should be held accountable and their position of trust taken from them and the benefits of that trust confiscated. One by one, each state must be addressed and educated as to their elected official’s action and a moral imperative be instilled in their electorate as to the reason why their senators and representatives should pay a price for their reckless mistake.


Posted by: Weary Willie at March 9, 2009 07:26 PM

Posted by: Weary Willie at March 9, 2009 09:12 PM
Comment #277240

Why must blame be broadcast amongst this or that party and in so doing, dilute accountablility?

Posted by: Weary Willie at March 9, 2009 10:06 PM
Comment #277243

Looking at the FED’s information the following is the stated penalty for reserve members making false statements about assets. “The punishment for making false statements or reports which overvalue an asset is also stated in the U.S. Code:
Whoever knowingly makes any false statement or report, or willfully overvalues any land, property or security, for the purpose of influencing in any way…shall be fined not more than $1,000,000 or imprisoned not more than 30 years, or both.
These aspects of the Federal Reserve System are the parts intended to prevent or minimize speculative asset bubbles which ultimately lead to severe market corrections.”

Aren’t you really getting tired of reading in the newspapers, just everyday, about the poor bankers being fined and imprisoned. Not their fault … they are just passing on a lie…

Only $2B of the $7B stimulus will be spent in 09. Paul Volker, whom I respect as a leading economist, recently said something like ‘some banks are to big to fail and some banks are to big to exist’ which I take to mean, let em go under which is preferable IMO.

China is ramping up harrassement of Navy vessels in international waters even while Hillary is calling for greater military cooperation with China.

Saw some tent cities in operation in, I believe, Sacramento and Seattle. I wonder if FEMA and the Red Cross has any idea about what’s coming?

Strangely, Californians are protesting against higher taxes.

Lou says illegal immigrants will have access to about 300k jobs or 15% of the 2M jobs that is likely to be created under the stimulus. E-verify is now conveniently on the back burner until May 26th. Larasa to receive $473k from Omnibus billl. 78% of Lou’s audience feels that the administration is working to stop enforcement of immigration law altogether.

The nursing shortage came up again with folks wanting to import 50k nurses from the PI. $330M in the Omnibus to deal with nurse shortages. Supposedly 100k job openings for nurses. Universities turned away 50k US applicants in 08 due to, get this, a lack of faculty and classrooms.

When you can’t take it anymore come on over to Republic Sentry and let’s get started. 2011 will be here before we know it.

Posted by: Roy Ellis at March 9, 2009 10:46 PM
Comment #277246

The Fed did nothing wrong. It’s action/inaction was legal. The responsibility lies with the politicians who passed the laws allowing previously illegal activity to flourish.

Identify the problem.

Posted by: Weary Willie at March 9, 2009 11:26 PM
Comment #277248
Strangely, Californians are protesting against higher taxes.

When I was in California I was told I could get free education if I was a resident of California for 6 months. I declined this invitation because I though it was too good to be true.

Perhaps it is!

Posted by: Weary Willie at March 9, 2009 11:40 PM
Comment #277249

Weary Willie,
Why Congress removed the tape around the door and unlocked it they did not intend or indtructue the Bankers and Their Stockholders to walk through it. For as Mr. Greenspan has commented “Who would have thought that CEOs, their Broads, and Stockholders act against their Inherent Best Interest?”

However, it does go to show once again why Parents should not give their children enough rope to hand themselves.

Posted by: Henry Schlatman at March 9, 2009 11:48 PM
Comment #277252

I believe much of the stimulus is intended for building more and better classrooms…then hiring more and better teachers to man those more and better classrooms…perhaps those more and better medical students can utilize those more and better classrooms which will house those more and better teachers?

Posted by: Marysdude at March 9, 2009 11:58 PM
Comment #277255

This will be an exercise in fun! Albeit at Mr Schlatman’s expense.
for I believe his prose are intended to mislead us to the correct path. A simple-minded endevour into my favorite relatives minds are made to account for the simple minded endevours of our elected officialles.

I agree, Henry! I feel your pain.

YOur’s too, Marysdude!

Posted by: Weary Willie at March 10, 2009 12:05 AM
Comment #277268

Weary Willie,
At least point you in the direction of the Light at the end of the tunnel. For anything else would be Civilized.

Marysdude,
The Federal Goverment limited to funding the building schools, I do believe that if yu look deeper at the American Recovery and Reinvestment Plan you will find under the Funds to the Local and State funds to hire and keep teachers as well as other education programs and projects.

Posted by: Henry Schlatman at March 10, 2009 03:27 AM
Comment #277270

Doubting Thomas’ comment now asserts a blatant and obvious falsehood in his argument’s defense by sayinng:

“Nowhere in your original post did you mention bankruptcy..”

I use the word bankrupt on several occasions in my original article, and raised it again in the comments section. As evidence I offer the following relevant passage from the article:

Attempting to recover a bad loan from an unemployed and bankrupt borrower is an exercise in futility. Blaming the borrower is simply unproductive blame shifting.

Thank you again for conceding the debate by default.

Posted by: David R. Remer at March 10, 2009 06:03 AM
Comment #277271

Weary Willie said: “When I was in California I was told I could get free education if I was a resident of California for 6 months. I declined this invitation because I though it was too good to be true.”

That was decades ago that California provided state citizens tuition free college. It was real. You thought wrong. It helped make California the 8th largest economy in the world and created a magnet for silicon valley and other innovative and creative scientific and technological centers.

There are many reasons while their free access to undergraduate education did not last longer, I am sure. But, I have yet to come across a rational non-partisan examination of the topic. My Uncle, lucky guy, got his pre-med degree through the free system attending Pierce Junior College and then UCLA I believe it was, before going on grad school to become a Dentist. I can’t recollect with certainty, but, I think ‘free university’ did not refer to being entirely free. I think he still had to pay certain fees and buy his books and lab materials. Tuition was free for in-state residents.

I visited him in the late 1960’s when he took me into the anatomy and physiology lab to watch him work on a cadaver. I think he thought it would make me squeamish and faint, or something. We had a bit of rivalry left over from our youth as we were only a couple years apart in age.

Posted by: David R. Remer at March 10, 2009 06:16 AM
Comment #277272

Weary Willie, my apology. Your comment below was not addressed to anyone by name and I picked up on the word blame, moot or not, to respond to.

Who is to blame? The answer, history proves, are the representatives who changed the law. It’s that simple. To cloud the issue with Wall street’s ignorance of what was happening is moot because it was legal. To blame the homeowner is also moot because it was legal. Whether the vote was cast by a Democratic or a Republican is moot because both parties shared the responsibility.

Your latest response ignores the individual who voted for this Act. Why must blame be broadcast amongst this or that party and in so doing, dilute accountablility?

My reply to your comment, on review, does not really address the point you were making which was on a different aspect of the topic. Again, I apologize for misreading your comment addressing the blame affixed to parties.

The voters however, can only respond to elected official’s failures AFTER the FACT, not prophylactically. And the voters DID hold a large minority of Republicans and very few Democrats accountable in the 2008 election. I am unclear what you refer to using the words “this act”. Democrats could make the logical argument that voters are not to blame and did act responsibly by removing Republicans from power. I have made that same argument myself, as it is evidenced by the election results and polls on the topic, which hold Republicans responsible for the most part.

Posted by: David R. Remer at March 10, 2009 06:27 AM
Comment #277280

The central point, that lenders are responsible for the loans they make, is unfortunately sound. In asking for a loan for a house, a worker does not, in fact, have a responsibility to assess the probability of that loan’s fulfillment. His greater responsibility to meet his own needs and/or those of his family forces him to consider only his ability to acquire the loan, not the lender’s profit.
Given our recent collapse, we may not be able to save the nation’s economy so much as put it into a prolonged regimen of therapy with the expectation of repeated relapse. Decision-makers at lending and investment institutions are paid, at least to a degree, to find new ways to secure their company financially and to increase its profits, and in the past such ways have included investment on loan (cause of 1929’s “Black Friday” and thus the great depression), computer programs meant to sell vast amounts of stock quickly during a price slump (which produced a vaster sales slump and the “Black Friday” of the middle eighties) and the subsidizing of sub-prime loans into other investments (the at least reported cause of our current woes). In short, people are always going to have bright ideas which looks good on paper, and at least some of those ideas, because of their reliance on the consistency of some factor, will fail when that factor fails to operate as expected, some failing in big ways. This problem is simply too pervasive for any quick-fix; in fact, it may well be unalterable. There are, in a sense, too many such “good ideas” for the government to remove them; and, given human ingenuity for finding a way around the law, the government will probably not be able to prevent other ones.
Worse, though, given the pre-economic need for social stability (basically the reason why we may have to save such monoliths as GM and AIG), the government may well have to permit just such mistakes as have shrunk the economy in the past given the possibility of increasing the economy and/or the citizen’s satisfaction with his life in the immediate future. Those sub-prime loans, for instance, may look idiotic now, but just a few years ago a common consumer complaint was of the unavailability of such loans to working individuals with bad credit histories. Given that elected leaders do, in all probability, want to please their electorate, any such demands occurring in the future will probably result in loans to just such people again, with all the risks. Likewise any such thing popularly perceived to increase jobs or wealth at a risk.
Interestingly though, government loans may not be the awful thing we commonly suppose them to be. A government investing in a successful company, even one successful for only a limited amount of time, may gain tax revenue from, if not the company itself, its workers, their purchases and perhaps even the wages of those producing and selling their items of purchase. Certainly this is at least some degree of defrayment of their cost, and given a company which has repayed its loan, it would be a source of profit. Perhaps someone should do a cost-benefit analysis of this question?

Posted by: The Armchair Explorer at March 10, 2009 11:04 AM
Comment #277289

Good Luck trying to build it yourself as a home owner up here They’d laugh at you, This town is buttoned up so tight they don’t miss a trick, And i’m not sure if it’s a bad thing I’ve seen some work here by the local DIY Guys. My House was built by a contractor and my attorney knew of him and his attorney, The house was sitting empty for over a year and was at $299,000 semi custom I bought it at $190,000 and he had to put in a radon system he was mad but he was ready to lose it and i helped him as much as he helped me.

Posted by: Rodney Brown at March 10, 2009 12:51 PM
Comment #277290

Armchair,

My gut reaction to your commentary was that it was loaded with pessimism and I wanted to debate the other side with you.

However, upon rereading, I find it too much effort to try to counter your points. I agree with them, and their conditional nature.

I would however, being an optimist ever in search of reasons to remain so, offer the following.

While I agree that our economic future likely holds “a prolonged regimen of therapy with the expectation of repeated relapse”, following this recession, with mini-contractions compared to this one, will have a profound psychological effect on our citizenry and hence, their representatives, as such mini-contractions will raise the specter, still fresh in American’s minds, of the Great Recession of ‘08.

This constitutes an entirely different psychological backdrop for the relationship and interaction between citizens, workers, their representatives in government, and shareholders and board rooms of corporations going forward.

Whereas the 01 - 02 Recession was experienced by the public as a shopping opportunity with the added benefit of helping your nation’s economy out, this recession will not be remembered so favorably or with such aplomb. This Recession will be remembered for at least the next 2 decades as the Great Warning of the next Great Depression.

Hence, I would add to your commentary the following. While some structural components of our economy like the growing opportunity cost of national debt service costs, and complexity of market ingenuity remaining a step ahead of regulation and oversight, there are many conditions and actions being taken now, to more effectively deal with these and other challenges raised by this Recession. I would bet that the concern and even expectation that the national debt be treated as a nightmarish monster to be defeated, is unavoidable. Further, I would bet that Americans will no longer take education for granted, as they have in the past. Its cost is growing to dear, and its growing importance to remaining in the middle class of the future will not abate. The more educated the electorate is, the more likely they will be to hold not only their representatives, but, their corporations accountable for consequences which threaten the the quality of life of American citizens.

Lastly, there are encouraging statistical data coming available. Christianity is shrinking in America. This is a measurable statistic. Though its impact will no doubt be hotly debated, I see a growth in good old Missourian “Show Me” attitude from board rooms to school rooms as a result, as opposed to accepting dis and mis information on faith by virtue of the author’s reputation. The experts will remain necessary, but, the citizenry will demand more in the way of experts selling their case to the people before the people will grant the experts the credibility to lead them.

Global Financial and Economic cooperation are looming large. When I read Thomas Friedman’s The World is Flat, I saw the dark clouds of economic warfare and international capitalistic rivalries protending wholesale large global losses from the middle class toward a two tiered have and have not world citizenry. (I know, that is not what Friedman postulated as the consequence of interdependence of nations created by international and widely dispersed operations of corporations, but it was my read of the direction.) Of course when a whole lot is now changing very fast in the global oversight and regulatory arena outside the hands of international corporate boardrooms and Exec Suites, that was not foreseeable when Friedman’s book was published, as a consequence of this Great Recession.

Ben Bernanke’s speech this morning before the International Economic Forum was eye opening despite his heavy lidding delivery style. International oversight and regulatory capacity was something Friedman did not imagine at all. And though it is not a reality yet, it appears to have enormous appeal to the governments of the major nations now reeling from this American led Great Recession. If such an entity or entities (regional) come into being, it will have the effect of putting oversight and transparency on steroids. And that could have an enormously stabilizing effect on the economic future of not only the U.S. but all the economies throughout the world. It is generally accepted as true, that where there is economic stability and predictability, markets and consumerism and labor can prosper along with innovation and creativity.

In other words, these revelations give me hope for my daughter’s future, not hope of economic utopia, and not fear of world wide economic collapse resulting in partial reestablishment of feudal systems centered around food production centers. But, instead, a future where in fits and starts, a more stable economic future can be achieved as the tug of war between structural impediments is won out over time by economic cooperation and a degree of oversight and transparency never seen before, permitting progress without as much cyclical cost due to bubbles and unintended consequences of unforeseen market place activities.

Posted by: David R. Remer at March 10, 2009 12:59 PM
Comment #277292

Rodney Brown, there is a qualitative difference between DIY’ers who build to sell, and owner builders who intend to live in their construction for years before considering selling, if at all.

I went to great lengths and effort in self-education to insure that my home was built to or above specs. My family’s health and lives depended upon my building this structure to be as safe for them and myself as possible. It is not a guarantee that a builder owner did everything according to spec, but, there are no guranatees commercial housing builders get it right either. San Antonio, Tx. has been plagued for decades by new subdivisions of middle to upper middle class homes with defects in workmanship due to the readily available falling wage migrant workers who now populate most work crews.

Posted by: David R. Remer at March 10, 2009 01:08 PM
Comment #277295

My Homeowners insurance is $40 a month here and in california it’s $112 And i have better coverage in ny. The school tax is higher but everything else is less. Auto insurance is like 1/3 less . R 50 in attic and R 24 in walls I heat with a 94 plus 100,000 btu and cool with a 3 ton 16.0 with 3000 sq ft . I need a 5 ton ac in ca in a smaller house. I’d like to do a coal stove in the lower level wood pellets are expensive and coal has a much higher btu content it has a converter on it and no smoke at all .

Posted by: Rodney Brown at March 10, 2009 01:21 PM
Comment #277297

Oh for sure tract housing Keeps the attorneys busy and for a good reason i’ve seen thousands of them and did the sheet metal and ac and heat on them good thing for drywall!

Posted by: Rodney Brown at March 10, 2009 01:25 PM
Comment #277299

We did good work my dad was a nut about quality .but my gosh you know what i’m talking about.

Posted by: Rodney Brown at March 10, 2009 01:29 PM
Comment #277303

He was Union all the way he came out in early 1950s to ca and fought with the unions . There History now on all the small jobs.

Posted by: Rodney Brown at March 10, 2009 01:40 PM
Comment #277306

Yeah, you couldn’t pay me to live in Ca. I specifically chose to return to this particular location in Texas for a host of reasons which included no state income tax, no building ordinances save for septic systems, and a very low risk area for natural disasters. We reside at the southern most tip of tornado alley, and therefore, tornadoes are our only known natural disaster risk. Which prompted me to build hurricane ties into all the 2x8 and 2x12 framing, with 2x4 diagonal wind bracing let in to the 2x8’s at the corners of the rectangular structure and spaced every 20’ along the length walls. Chose the low end of the 5 acres to site the structure in the hope that a tornado coming from the South or West, would ride up the high side of the property and skip right over the house setting some 35 ’ lower on the property.

Better safe than sorry. This house has already withstood 75 mile per hour gusts with nearly 3’ of roof overhands, (which I designed to withstand the lift). Couldn’t be prouder of the engineering. Of course, it would not survive a direct tornado strike, but, the odds on that are negligible.

We camped out on the property until a monsoon moved through so we could estimate the maximum height of our wet weather creek before siting the house. It could rain 40 days and nights and our house would not be threatened by the creek, even though its lowest point is only about 140’ from the house foundation. The slope of the creek across our property is steep, so the water runs fast and doesn’t swell out more than about 50’ in total width of flood plain.

I still have great concerns over government’s presumption that individuals cannot be allowed to act on the basis of self education when it comes to building their own homes. Even though I understand that they regulate for the vast population which buys and sells homes every 5 to 10 years. I will die in this home. I have poured to much of my life’s effort into it, why on earth would I consider selling it if I had a choice in the matter? Something governments won’t accommodate in their regulations generally as I represent too small a minority.

Posted by: David R. Remer at March 10, 2009 02:08 PM
Comment #277313

Remer, it would appear that you did a great job in building your home. It is not a project I would recommend for everyone as it is hard work and requires a great deal of discipline and attention to detail.

Yet, for those hardy souls who live in an area where it is permitted I would highly recommend such an endeavor. Rarely will you take more pleasure or enjoy more self-worth than when you live in a home built by your own hand and mind.

I selected every stick of lumber, every pipe and every wire that went into my home. I layed my own tile and finished my windows with wood trim, not drywall. The contractor that poured and finished my cement slab thought me foolish when I demanded bolts be placed in the cement around the perimeter to fasten my sole plate to so the house could better withstand huge winds. I used 3/4 inch plumbing and can run three baths or showers at the same time without loosing water pressure. My backup heat source is a wood-burning “earth” stove which I can only use in the very coldest weather without having to open the windows to lower the heat.

There is not a single hallway in my home as I designed it to use every single square foot for living space. I installed ceiling fans in every room except the bathrooms.

Well…that’s enough bragging for now. You could only appreciate what Remer and I feel if you had built your own home also.

Posted by: Jim M at March 10, 2009 03:49 PM
Comment #277319

Jim M,

All I can say is WOW. For me, that explains a great deal why you are such a steadfast conservative. Although I may disagree with many policies of conservatives, I still admire the efforts it took to build your own home.

Posted by: Warped Reality at March 10, 2009 05:38 PM
Comment #277322

Thank you Warped Reality for your kind comments. You know, I think many folks under-appreciate their own abilities. All my relatives and friends thought I was crazy when I told them of my plans. But the only failure in life is not trying.

Most folks can accomplish much, much more than they can imagine if they but try. If we set our goals high, if we try, if we persevere, if we believe…we all can lead a much richer and rewarding life.

Good Luck to you Warped in all your life’s endeavors.

Posted by: Jim M at March 10, 2009 05:55 PM
Comment #277332

Sounds like you Both did a Great Job on your Houses I remember David saying a few years ago he and i think his wife hand poured there Foundation! I did some Masonry work as a kid and They put you grout and block detail and after lugging around a thousand buckets a day of grout and blocks and them yelling at you for more i said forget that.

Posted by: Rodney Brown at March 10, 2009 07:35 PM
Comment #277337

Jim M.,
Thanks! You just gave me an idea on how many of the Low and Middle-Income Citizens can help save their Home, increase the supply of affordable housing, and put a larger down payment on their loan. For as David and you have worked to put Sweat Equity in building your own house and all the clients of Habitat for Humanity have put Sweat Equity in their homes. I do believe that the Banks and the Federal Government can create a program that would allow the Homeowners to get credit for offering Sweat Equity in helping their Local and State Governments implement the American Recovery and Reinvestment Act.

For what better way to show support for your community and lower your monthly payment than spending a few hours a week assisting in the renovation of schools, buildings, and other facilities. For why you show pride in your home over that which is done commercially. How much more pride would you show in your community if you worked hard over the next few years helping yout Neighbors and Community Elders become more energy efficient.

Two birds with one stone and the icing on the cake of experiencing what our ancestors came to know. Now you and David can figure out the Details of how Our Democratic and Republlican Leaders can spend a dollar and get a few hundred in return.

Posted by: Henry Schlatman at March 10, 2009 08:17 PM
Comment #277341

Actually David, the government is most at fault here for jigging with the rules of the market.

And for the record it was the Bush administration who saw the problem and democrats who stopped the solution.

“Nothing wrong with freddie mac and fannie mae…

Posted by: eric simonson at March 10, 2009 09:03 PM
Comment #277343

David,

I know you will find some way of completely discounting the fact that Bush actually did try to head off this situation but I can only put the info out there…

Seventeen. That’s how many times, according to this White House statement (hat tip Gateway Pundit), that the Bush administration has called for tighter regulation of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. Congress has cooperated only once. ~usnews.com

Posted by: eric simonson at March 10, 2009 09:13 PM
Comment #277358

Eric,
Nice try; however, if Fannie and Feddie only had to deal with their house problem than the Economic Meltdown would not have happened. For why I don’t remember the exact day President Bush allowed the Federal Government to back up the regular mortages of the Market. I do know that if Fannie and Freddie did not have to take on that extra burden due to AIG being unable to cover the Insurance Policies than it would not be Low-Income Housing that we are talking about. For why is all the Home Mortages now backed up by the Full Faith of the U.S. Government?

Posted by: Henry Schlatman at March 11, 2009 12:32 AM
Comment #277367

Eric, you would be wrong. Why would I discount facts if they are true? Freddie and Fannie however were not the impetus to the financial system meltdown, though they certainly contributed to the mess and threat to the economy after the money market run and failure of Lehman Bros., in concert with the many other financial institutions which had leveraged themselves into insolvency.

So, Eric, why is it Republicans in Congress failed to support Bush’s efforts to regulate Fannie and Freddie, and why ONLY Fannie and Freddie, whose primary fault was buying collaterized assets sight unseen into a property valuation bubble in order to make loans, many unsound, through mortgage brokers and real estate personnel driven by the profit of quantity lending over quality lending?

Without regulation of all these different aspects of the real estate financiing industry, our economy would still have ended up threatened even if Freddie and Fannie had received the kind of reforms Bush was pushing. Jon Markman warned of the coming crisis in June of 2006. I know, I wrote an article here about it.

So, why was Pres. Bush so unaware and unprepared to act? Was this a similar case to the 2001 CIA Fact Book providing all the information necessary to the public to determine that invading Iraq would be anything but a short, fast, and easy invasion and victory? Pres. Bush, for whatever reasons, simply failed to stay abreast of information which was in the public realm for all to read and heed. Which left his second term in office reactive, defensive, dumbfounded, and isolated in the extreme.

Posted by: David R. Remer at March 11, 2009 06:58 AM
Comment #277368

Rodney, yes, pouring the foundation was a nightmare. We had a small hand portable cement mixer in which we could pour 4 60lb. bags of concrete mix at a time. Of course the pour has to be done all at one time, as you can’t allow wet concrete to be poured against cured concrete. So, once we started, we could not stop to take a break until the entire 64’ by 15’ foot perimeter foundation was completely done. It was the longest day and part of the night we ever lived in our lives.

That is one task I would never undertake again with 2 people and a portable cement mixer. But, we proved it could be done and done well. Part of the foundation rests on bedrock at one end, and on compressed limestone gravel over clay at the other. A decade later, not a single crack in the foundation. Which also says welding, instead of wiring the overlapped ends of the rebar together was a prudent move. And the foundation was stepped down along its length to accommodate elevation drop. To this day, I am both impressed and proud of our foundation. How many homeowners can say that? :-)

Posted by: David R. Remer at March 11, 2009 07:09 AM
Comment #277369

Jim M, a fine design indeed. We too heat our home with a single wood burning stove, with an installed suction duct above it to distribute the warm air to all the other rooms. The stove however sits adjacent to the stairs to the 2nd floor, and hence, we rarely have to turn on the air movers to heat the house. Natural convection does the trick unless temps drop below 20 degrees.

Despite R33 walls and R45 ceilings, cooling our S. Central Texas house requires 3 window air conditioners running during the days of the two hottest months, (2 upstairs and 1 downstairs) and one during the evening upstairs. Which is a lot more electricity consumption than we had anticipated. Next year I will be double roofing the house, with an air space from eave to peak between the two roofs. That will hopefully cut our cooling cost in half.

Financing a build your own home is what has ruined the experience of most folks who have attempted to build their own, from what I have read. Many a horror story are readily available due to the such folks inability to get a builder’s loan without hiring a general contractor, which sort of defeats the purpose of building your own. Contractors can be come after by insurance companies if a construction fault results in an insured claim for damage. Therefore, reputable contractors will not permit their signature to be affixed to a home which the owner built, instead of the contractor. Of course, there are contractors willing to have their palms greased in exchange for their signature, but that presents another set of potential legal risks should the homeowner file a claim and the claim investigator discovers the fraud.

Posted by: David R. Remer at March 11, 2009 07:31 AM
Comment #277372

David,

While a foundation without construction joints is preferable in some situations, it is by no means a requirement for a good foundation. Where and how construction joints are made is critical. I’m also not sure why you think welding rebar is superior to wire tying, but congrats on a job well done. The main consideration in foundation design is even distribution of the loads, and a stable subase which the limestone (Austin Chalk) and compacted limestone gravel provided. Clays can be more problematic, if they are expansive. The Austin Chalk formation is a very stable
place to build a foundation.

Sorry, if I’m contradicting you a little, but that is my area of expertise;)

Posted by: gergle at March 11, 2009 07:50 AM
Comment #277393

Mr. Remer I congratulate you on pouring your own slab. I thought about doing that also and wisely (after reading your comments) decided to hire it done.

Another great adventure in home building was the roofing. My wife and I shingled the roof in July in Texas. My roof is very steep being a chalet style home and I had to nail 2X4’s to the sub roofing to have something to kneel on and not fall off. The roofing paper became so hot that we had to kneel on towels to keep from burning our knees. Not owning a nail gun, and being too frugal to buy one, we hand pounded all the shingle nails. We hand cut all the metal flashing in the valleys and around the chimney and even with gloves I managed a few deep cuts in my hands in that operation.

The most enjoyable part of the job for me was the interior finishing. I love working with wood and trimmed all my doors, windows, base boards and ceiling trim. My goal was to always get a perfect fit and I can tell you frankly, that in the beginning I had to recut many boards. The old carpentry adage…”measure twice and cut once” certainly is true.

Needless to say, I have a profound respect for the building trades and those folks really earn a day’s pay.

Posted by: Jim M at March 11, 2009 12:26 PM
Comment #277394

BTW, I get winded using a hand mixer to pour a square of sidewalk! My parents poured a driveway 100’x30’ using rock, sand and cement and a wheelbarrow and a hoe. You guys all have way more energy than me. I’m now closing in my porch with screen. I think I’m the slowest contractor on the planet.

Posted by: gergle at March 11, 2009 12:30 PM
Comment #277408

The major fault for the recession lies with Congress. This whole thread of discussions shows how dependent we have become on government. So many folks believe that if an investment or lending plan is on the market they must have been approved by government. And, sadly, they were approved by government.
I see where Obama is going for more ‘change’ regarding earmarks. Maybe even going to change the print color of the new regulations in the law books just to make a believer out of some of you doubting Thomas’s.
And, he did make a speech on education while pandering to the Hispanic Chamber of Commerce. Talked about a whole lot of free stuff but nothing of substance. Just sealing up the crack as to which side of the immigration deal he is on. Talked about money for early childhood preschool, merit pay for teachers and no child left behind. Said Latino’s had been hardest hit by the recession. Not totally clear as the jobless rate for blacks in twice that for Latinos.
Meanwhile, the heads of five bodies showed in in five coolers in Guadalajara yesterday. Prompting a renewed call for more double wide fencing. So, if they tear down the Bush fence to install double wide we ought to be ready to go with a real fense sometime around the end of O’s second term.

Some interesting experiences shared on doing your own construction. I have to politicize the discussions by saying, again, we have too much democracy. The developers can take care of the politicians needs for a while and get just about any law they want put on the books. Could build them upside down if they wanted. Its too easy for the small minority to buy control of the majority. I wonder, if you opted out of fire insurance would the fire department come in case of a fire? If not, thats a loophole the insurance lobbyist should be working on.
I have a cousin who, while living in Detroit, used his vacations to cut, saw and air dry all the materials needed for him to build a place in N. Ga. for retirement. He cut heart pine for support beams and built ever stick of his home by himself. Just before he finished it he cut off a thumb with a skillsaw. Now he fishes off his front porch for trout, living the good life.

Posted by: Roy Ellis at March 11, 2009 01:44 PM
Comment #277430

Roy said: “And, sadly, they were approved by government. “

To be accurate against reality, that sentence must be modified to read:

And, sadly, they were approved by government, or ignored entirely.

Posted by: David R. Remer at March 11, 2009 04:08 PM
Comment #277433

Gergle said: “My parents poured a driveway 100’x30’ using rock, sand and cement and a wheelbarrow and a hoe.”

Can’t tell if your parents were were modern masochists or prehistoricly primitive. Must have taken them a week or more with many hours per day to pour 3000 s.f. in that manner. But, their having done it is a testament what can be done when necessity and will combine.

We expect way, way too little from our elected officials, in contrast to your parent’s accomplishment.

Posted by: David R. Remer at March 11, 2009 04:13 PM
Comment #277436

I would like to add to Mr. Remer’s statement; “We expect way, way too little from our elected officials and ourselves, in contrast to your parent’s accomplishment.”

Posted by: Jim M at March 11, 2009 04:23 PM
Comment #277437

Jim M, that must have been torture doing the roof. We were lucky as it was Spring when we put our roof on, and it was 2’ wide by 10’ long V crimp metal panels which made the job go very fast. I think we had the roof finished in 2 days, less gutters. I designed my roof so that there were NO protrusions through it, no vents, nothing. Took some creative plumbing but, it worked and according to code.

My main regret which I will fix next year, is that our metal roof went on stringers, perpendicular to the rafters, instead of a plywood substrate. Which means when it rains, it is very loud. When it hails, it is deafening. Experience is a great teacher.

The neat thing is, we can re-use our metal roofing, so, upgrading the roof to a double roof air flow design will waste no material. With air passing between roofs and under the bare metal roofing, heat will be carried away before it has a chance to transfer into the attic area and subsequently through the ceilings. Should do the trick for cutting our summer cooling costs in half.

We pay some of the highest electric rate in Texas. After the roof is redone, we will install solar electric, about 2 years from now, when we can benefit from the Obama policies making home solar more affordable and forcing all utilities to buy electric power from homeowners with power to spare. That should cut our electric bill in half again, if not more. GoBama!

Posted by: David R. Remer at March 11, 2009 04:25 PM
Comment #277451

David, good idea on not puncturing the roof. Folks spend a lot of time looking for and repairing leaks over the years. And, the double roof scheme should work well also. Do believe you would be well served to have sofit vents and a ridgeline roof vent installed. Don’t even know if that’s done with metal roofs. Sounds good.

Otherwise, we have the high cost for housing codes that we deserve.

Posted by: Roy Ellis at March 11, 2009 05:22 PM
Comment #277452

Failed to mention that some fella has come up with a solar fan/ventilator system for cooling attics. Sounds like a great American idea.

Posted by: Roy Ellis at March 11, 2009 05:24 PM
Comment #277460

Roy,

How was that possible before Obama was elected president and spent the trillion dollars to get us to those ideas?

Posted by: Rhinehold at March 11, 2009 05:58 PM
Comment #277472

Yeah Rhinehold, even ‘free trade’ and the globalized economy hasn’t completely stopped entrepeneural spirit. But, he had better sale a lot of fans quik as China will be coming on line with the same, but cheaper model fan toute suite.

Jamie Dimon, CEO ? and the CofC was blasting the administration today for badmouthing the economy. Said that if the admin would start talking up the economy he believed we would be recovered by years end. Now there’s an entrepenue for you!

Congress was bitching about the too big to fail banks using TARP money in making huge loans to Dubai, India and China while trickle leaking in the US. What in the world is wrong with them people? Who, or what bank in their right mind, would loan a business money to build in the US. Maybe a loan for healthcare or pharmas but not for any production type business. Maybe Congress was pandering to the public sentiment. Otherwise, they are out of their rabbit assed minds.

NBC was exemplifying a $70k fortune 500 mgr who has taken a job as a janitor at $12/hr. Not good. More work to do. A janitor is going to have to get down to around $4/hr so that mgrs can top out around $18/20/hr. Now it looks like the middle class worker is getting competition from both ends of the pay scale, ex-mgrs and illegals.

Otherwise, we have the government we deserve.

Posted by: Roy Ellis at March 11, 2009 08:20 PM
Comment #277478

Their Feeling the Pinch. http://finance.yahoo.com/banking-budgeting/article/106712/World’s-Billionaires-2009

Posted by: Rodney Brown at March 11, 2009 09:39 PM
Comment #277483

David, not sure of the time frame, I was very young. They did pour it in sections, though. It did taper down about 2/3rds of the way down to a single car width. I agree, they must have been gluttons for punishment.

My father also rebuilt an airplane in the garage. Engine, Fabric and Frame. My mother didn’t work, and my father made a good income, working 9 to 5. He worked as an electronics technician for the University of Dayton research department.

In his later years, when he built the house he retired in, he did the interior finish out, but paid others to frame it, and pour the foundation.
I got roped into helping him. My Dad always was industrious, until he lost a leg to diabetes. He always worked the crap out of me.

In my generation, all my friends worked and still work long hours, often with both parents working. Few can afford flying as a hobby,(It was somewhat cheaper then) and have little time off, anyway. It’s a different time.

Their parents were farmers, mostly, they had flexibility in their schedules, but little actual free time or money.

Posted by: gergle at March 11, 2009 10:36 PM
Comment #277490

Although the discussion kind of ended a while ago it seems. Another reason why I think it is lenders responsiablity to make loans that should be able to be paid off is because they use what most people call risk, or interest. By them charging people that have worse credit a higher interest rate, they are there by accepting the fact, and risk that they might not get paid back all the way. It is contractual by action, even though it is not in the contract per se.

Posted by: kudos at March 12, 2009 01:50 AM
Comment #277495

Kudos, I think years ago lenders did have more responsibility in making loans. But, with deregulation and spreading the risk over so many holding institutions, and believing that US housing prices would never go down, the banking industry generated zillions of loans that otherwise would have been seen as too risky. And, the banks know that in the end times the risk will always be shifted to the government (taxpayers).
So, I’m sticking with my premise in that government is major culprit although there is some fault with all the players.
And, why did government deregulate? Because we have the best government money can buy. So, the blame goes first to the government and then to the financials and lastly, to the people.

Otherwise, we have the government we deserve.

Posted by: Roy Ellis at March 12, 2009 10:07 AM
Comment #277497

Sorry !one more bit they do make Ridge vents and caps for metal roofs we’d leave a 1-2 inch gap at the top and the ridge vent/ cap sat on top and was self sealing it’s a very simple design and can be used for new or old get those soffit vents in to. http://www.marcogroup.com/ also A white roof will Lower temps by up to 40 degrees. I’m not trying to plug anythng so you can remove this !

Posted by: Rodney Brown at March 12, 2009 10:49 AM
Comment #277500

Roy,

While I agree it’s a failure of due diligence on the part of the government and investment banks to not have properly assessed the risk, not the homebuyers, it WAS collusion on the part of financial interests and PAID lobbyists, some of which included guys like Phil Gramm, to create the vehicles which defrauded so many. Will that ever be prosecuted? Doubtful. We live in an imperfect world, and some people are very slick thieves.

This morning I heard a talking head mention the death penalty for Madoff. If we could extend that to these guys, I’d join the throngs at the guillotine.

Posted by: gergle at March 12, 2009 12:03 PM
Comment #277509

Agree with you gergle. Yeah, Phil and his wife walked away with not even a reprimend as far as I know. She left gov and went directly to an oil company I do believe and Phil retired and went directly to UBS, the Swiss bank that is under investigation for assisting US citizens to avoid their tax responsibilities.
Too late to nail those two, but this new 3rd party you may have heard about, Republic Sentry, is geared up to put accountability into the political equation. This Party can hold elected and appointed folks accountable through its membership. Check out www.repdems.com and let me know what you think.

Otherwise, we have the government we deserve.

Otherwise, we have the government we deserve.

Posted by: Roy Ellis at March 12, 2009 01:30 PM
Comment #277539

I think punishment may stop just short of the guillotine, but I have doubts that Madoff will ever leave prison under his own power.
There seems to be a sincere commitment to continue following the trails in search of more diverted funds. The man and his lackeys were a direct cause of the deaths of no less than two people. Perhaps that’s why the death penalty is a consideration…….

Posted by: jane doe at March 12, 2009 10:26 PM
Comment #277547

Again deregulation is the culprit. You can blame the consumer and you can blame the lender, but what created the atmosphere that allowed loans to bad risks was the ability to raise interest to usurious proportions for risky loans. As long as lenders were restricted to how high of interest they could charge, they vetted borrowers with much more thought about getting good debtors. Ronnie Raygun strikes again…

Posted by: Marysdude at March 13, 2009 12:04 AM
Comment #277548

If we want this to never, ever happen again, we need to make the punishment fit the crime.

Strip the guilty party’s family of their assets. Make them start from scratch. Let them know what it feels like to lose everything.
In reality I don’t think we would need to do this more than once or twice before they get the message.

Rocky

Posted by: Rocky Marks at March 13, 2009 12:27 AM
Comment #277558

Geithner is calling for spending billions to prop up world economies and pushing Europe to do the same.
A growing consensus that the IMF needs some new shoes. It put out $50B in November, a record. Expects to put out tens of billions more and the recession hangs on. The US makes two types of contributions to the IMF. One, it provides $10B in loans that backstop the fund, which the administration wants to increase to $100B. And two, as the worlds biggest economy the US makes the single largest contribution, $45B, to the IMF’s general operating fund. IMF said China, which has the worlds largest currency reserve, but does not provide supplemental funding is being asked for a fresh commitment. Traditionally, contributions to supplemental accounts have been a way for countries to lay down a marker to play a larger role in the fund according to an anonymous IMF’er. International talks this weekend precede a meeting of the G20 scheduled for April 2nd in London.
Also, Geithner said he wants to move forward with global regulatory reform. This weekend meeting will take up expansion of the membership of the Financial Stability Forum for world central bankers and regulators in Switzerland and coordinate the oversight of financial markets beyond the traditional banking sector.
The drug cartels are hiring US Latino teens as hitmen. A young fellow will get $500/wk for being on standby and $500k for making a hit. One young fellow said he has killed 14 people. The cartels like them as they speak the language, have the tickets and can move around the border areas with drawing attention. They drive around in big cars and tell tales of their adventures. A half dozen Congresspersons have requested that troops be put on the border.

Sports arenas are being torn down and replaced using some recovery money. Generally, they are constructed with 75% tax monies and 25% private. Sports associations like the arenas replaced frequently as the newer the facility the more seats they fill. Regular seats are around $11 while top end seats are around $18K.

Otherwise, we have the government we deserve.

Posted by: Roy Ellis at March 13, 2009 09:25 AM
Comment #277561

China is telling the U.S. to be careful, not to overspend and keep an eye on the dollar,” said http://biz.yahoo.com/ap/090313/as_china_us_economy.html Otherwise! and vote Until it becomes to Painful!

Posted by: Rodney Brown at March 13, 2009 10:38 AM
Comment #277562

David Spray some environmentally-friendly foam insulation on the inside of the metal roof to Get rid of the sound and help with heat gain/ Loss

Posted by: Rodney Brown at March 13, 2009 10:42 AM
Comment #277574

Roy, to be accurate, Geithner is calling for all the major economies including China and India to inject 2% of their GDP, (I think), into the IMF and economic stimulus. He is calling for the IMF’s 50 Billion to grow to $500 Billion, or 1/2 trillion dollars. When one economy’s falering can bring down all other major economies, as our has done to other nations, the IMF’s capacity to prevent that from occurring is both logical and warranted, IF one accepts that our economies cannot be decoupled without major suffering for major portions of society’s citizens.

What good would it do the U.S. economy to spend to stimulate our economy if the other nation’s of the world don’t do the same? Do you not see the impact on our own import - export markets and consequences for our own economy if other nations don’t boost their insurance premiums to the IMF? Our economy won’t recover if the world’s economies don’t also. That is the one of the realities of globalization, for good and ill.

Posted by: David R. Remer at March 13, 2009 02:01 PM
Comment #277575

Rodney, but then I wouldn’t get the benefit of the air passthrough double roof design. I did my storage shed with this design and it is very effective to halting the migration of heat from the metal roof to the interior.

Thanks though, for the suggestion. If I wanted to avoid the double roof, your suggestion would be one I would go with.

Posted by: David R. Remer at March 13, 2009 02:03 PM
Comment #277578

China is rapidly becoming the new mixed capitalism - socialism mixed economy leader in this new century. Their advice even appears sound along with their economy. Of course, China has centuries of cultural experience in the veneration of wisdom, as opposed to data integration. Gives them a leg up now that Mao is out of the way, and wisdom has been restored as central to their policy and ideology.

And just as America’s wealthy surround themselves with security measures against the would be predators on their wealth, China is increasing its budget for military growth. Who can blame them. They are on a path to becoming this century’s dominant economic power.

America can’t even protect its own sovereignty or agree to, with Mexican drug cartels in operation in 236 American cities, and growing. These drug cartels are now responsible for 7000 murders in just the last 14 months, to include politicians, police, military, and innocent bystanders. They now control a 12 billion dollar a year underground untaxed economy within U.S. borders.

And ignoring Americans could care less, China, Iran, Iraq, and N. Korea are their bogeymen, half way around the world. Even though Mexico’s criminal elements are taking over the drug trade in the U.S., and central American gangs are taking over in Northern Va. and other areas, and even though Pakistan, with its nuclear weapons only a coup away from al-Queda and the Taliban, is destabilizing. Americans and their ignorance of foreign affairs is truly disturbing.

I surely hope Obama is studying the foreign affairs situation as closely as he is studying the domestic economic situation. Hillary seems to be on top of it, as does Gates. But, staying abreast of these situations is wholly insufficient, as action, diplomatic and otherwise are required to prevent these situations from becoming the next crisis for America requiring additional trillions of deficit spending.

Posted by: David R. Remer at March 13, 2009 02:21 PM
Comment #277585

Whew. For anyone who works all the way down the reply string, I did not notice what I am posting as having been stated explicitly (apologies if I missed it).

Here are my views:

First, I believe that nearly everyone applying for a home loan does so to either live in the home and knows he can afford the downpayment and monthly payments; or for speculation purposes and measures his personal risk accordingly.

Second, there is a lot of fault to go around on this: the Congress, Federal Agencies, Presidential policies, political criminals, excessive greed in the private sector. But buyer ignorance is not one of these. I would wager that there are precious few adult souls in this country who possess all their faculties, that do not understand their own personal money and cashflow.

Lastly, let me add one more thing to the mix. If you were a private lending institution and were being heavily pressured by Washington to make loans to individuals you would not normally grant,
to protect your own interests would you not start to look for ways to rid yourself of this acquired risk?

I know for a fact that happened. That these high-risk loans were combined with other debt and turned into trading instruments which were then bought and sold is basically immaterial.

Indiana Oracle :: The Truth is Hard to Find

Posted by: Indiana Oracle at March 13, 2009 02:59 PM
Comment #277587

Indiana, one error in your hypothetical: “If you were a private lending institution and were being heavily pressured by Washington to make loans to individuals you would not normally grant,
to protect your own interests would you not start to look for ways to rid yourself of this acquired risk?”

Bears no relation to history. Private lending institutions were not being heavily pressured by government to make risky loans. CountryWide and others led the way with a business strategy based on profitabilty from quantity of loans, not quality of loans, and other private lenders were pressured by market share losses to CountryWide, to follow CountryWide’s business model.

Of course, this was aided and facilitated by government’s low interest rates, and the Bush administration’s ‘Ownership Society’ rhetoric, but, these did not constitute pressure, which is the word you used.

Then the abject failure of the entire credit default swap insurance & rating model, and inhouse accumulation of colateralized debt instruments as assets upon which even greater borrowing and leveraging were based by mega financial institutions like Bear Stearns and Lehman Bros. and AIG and Fannie and Freddie, in the face of a known housing property valuation bubble, was purely and simply a chasing of profits and abandoning of risk assessment and offset measures with any meaning.

Posted by: David R. Remer at March 13, 2009 04:03 PM
Comment #277589

Remer writes; “I surely hope Obama is studying the foreign affairs situation as closely as he is studying the domestic economic situation. Hillary seems to be on top of it, as does Gates. But, staying abreast of these situations is wholly insufficient, as action, diplomatic and otherwise are required to prevent these situations from becoming the next crisis for America requiring additional trillions of deficit spending.”

You pointed out some of my top concerns. You failed to mention perhaps one of the most worrying of all. That being, Iran with a nuclear weapon and a delivery system. Within a short time I believe this will come to an ugly head. Should an action be taken by Israel and countered by Iran with blocking ports in the region and damaging Saudi and other nearby oil fields, oil and the gas produced from it will not be available to ordinary American’s at any price.

Just curious, what would cause you to believe that “Hillary is on top of it?”

Posted by: Jim M at March 13, 2009 04:13 PM
Comment #277591

To Remer.
We disagree on the fine points of the pressure issue but am in agreement with you on everything else.

Your posts are very well thought out and expressed.

Posted by: Indiana Oracle at March 13, 2009 04:25 PM
Comment #277608

Jim M, I have never been overly concerned with Iran. Iran’s primary target is Israel, and Israel has its own nuclear weapons. And Iran knows this. Mutually Assured Destruction prevented the Cold War from becoming hot. I think it will have the same effect on the Iranians and Israelis.

That is of course, assuming that Iran is working on nuclear weapons. There is no evidence of that as yet, as their developments are equally necessary for supplying either nuclear weapons or nuclear energy. Safe bet however, that if their primary adversary, Israel has nukes, Iran will want them too.

The primary concern of the U.S. is whether Iran attempts to build intercontinental ballistic missiles, with or without nuclear warheads. That would constitute a direct threat against the American people. And there is neither evidence nor reason to believe Iran is developing those. That would work against their future interests, not for them.

Our role is diplomatic. Not militaristic where Iran is concerned, unless they attempt to close the Straits of Formuth or develop ICBM’s. That is something we should want them to know in the strongest terms, and a message both Bush and H. Clinton continue to make clear.

Posted by: David R. Remer at March 13, 2009 09:51 PM
Comment #277609

Indiana, thanks. Your posts are of interest to me for their abidance with the rules of logic. If your data and premises are valid, your conclusions seem to be as well. That makes for educational debate which is always a good thing in a public forum.

Posted by: David R. Remer at March 13, 2009 09:55 PM
Comment #277613

Using phony documents and the identities of a dead man and a 5-year-old boy, a government investigator obtained U.S. passports in a test of post-9/11 security. Despite efforts to boost passport security since the 2001 terror attacks, the investigator fooled passport and postal service employees four out of four times, according to a new report made public Friday.

Another too big to fail scenario on the horizon with the merge of Merck and Schering.

From a yahoo article:

The deal announced Monday would unite the maker of asthma drug Singulair with the maker of allergy medicine Nasonex and form the world’s second-largest prescription drugmaker. Merck and Schering are already partners in a pair of popular cholesterol fighters, Vytorin and Zetia.
The deal is being structured as a reverse merger in an attempt to avoid triggering change-of-control provisions in Schering-Plough’s partnership with Johnson & Johnson for two biologic drugs for rheumatoid arthritis, the blockbuster Remicade and golimumab, which is in the late-stage testing. The companies said this will improve their finances, giving them annual cost savings of about $3.5 billion each year after 2011, and will boost earnings per share in the first full year after the deal closes.

Obama is making more changes. The term terrorist is being replaced with enemy conbatant.

Lou Dobbs said this evening that its clear to him the Obama admin will pursue amnesty and open borders policy.

Two dozen banks charging fees for folks to access their unemployment benefits via debit card. Over 30 states have contracts with banks to provide the debit cards. Dept of Labor says they are concerned…

Four Dem’s are requesting an investigation of Sheriff Joe Arpaio. The DOJ is investigating Arpaio for civil rights violations. Silence from McCain and Kyle, two senators from Ariz. ACORN is one of the groups that brought a petition against the Sheriff. ACORN is under investigation in 13 states for voter registration fraud.

A Mexican drug lord made Forbest billionaire list.

Posted by: Roy Ellis at March 13, 2009 10:27 PM
Comment #277636

Correction. Obama admin is changing from enemy combatant to detainee.

Posted by: Roy Ellis at March 14, 2009 11:57 AM
Comment #277648

Roy, yes, the myriad problems facing our nation appear overwhelming. Which makes Republican official’s calls for Obama to do one thing at a time to conclusion before taking on another, just about the most counter-productive and dumbest notions to ever come out of a political party in recent memory.

Posted by: David R. Remer at March 14, 2009 01:23 PM
Comment #277664
Which makes Republican official’s calls for Obama to do one thing at a time to conclusion before taking on another, just about the most counter-productive and dumbest notions to ever come out of a political party in recent memory.
I don’t know if it’s only Republicans recommending tackling fewer problems at once, but that is a dumb notion. In my opinion, I’d like to see more. With the federal government being the biggest employer in the nation, and employing more people than all manufacturing jobs in the U.S., there’s no reason why the federal government can’t work on more than one (or a few) things at a time.

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at March 14, 2009 03:06 PM
Comment #277681

Well, Obama is certainly not paying any attention to the Repub’s in that he has several irons in the fire at this time. The G20 meeting planned for 2 April is going to discuss worldwide bank bailouts, egged on by the Obama admin. I’m thinking if the recovery doesn’t recover us Obama is going to be a one term Pres.

Posted by: Roy Ellis at March 14, 2009 06:18 PM
Comment #277708

Russia announced Sunday that it is cutting oil exports — welcome news for OPEC oil ministers looking for ways to bolster prices by reducing supply without further hurting the global economy. Back to $3.20 Gas? That will put a little pinch on recovery, Obama IMHO Should try to get them to Leave it alone for a while. http://biz.yahoo.com/ap/090315/eu_opec_meeting.html

Posted by: Rodney Brown at March 15, 2009 11:19 AM
Comment #277710

China and Iran have cut a $3.2B deal for natural gas supply. A third EU country is involved but not named. This is the third recent deal for China’s energy supply.
Well, T. Boone and other sages have said oil prices are expected to be back to $4/gal in the near future. IMO the oil industry is convinced the era of big oil is on the horizon and they had better make hay while the sun shines. Even the Saudi’s are investing in solar. That the Republicans (Texan’s) are out is the worst thing that could have happened to big oil.

David, I tried to talk my son into ducting his wood stove into his AC ventilation system and he said the installer wouldn’t buy it because it would dust up the coils in the ductwork and cut down on efficiency of heat/ac unit.

Posted by: Roy Ellis at March 15, 2009 11:38 AM
Comment #277713

Is there any way we can capture the hot air emanating from the WH and congress to heat our homes, fuel our cars and run our industrial machinery?

It is amusing to find congress so willing to decry bonuses in private industry awarded to those who have done a good job and to reward themselves with continual pay increases for doing a horrible job. Some say those bonuses are an abuse of taxpayer dollars. From where does congress and PO draw their salaries?

Posted by: Jim M at March 15, 2009 12:03 PM
Comment #277716

Important to provide makeup air for the air that is expelled out of the home Combustion and Makeup Air Or you could burn off all the oxygen . And We started to add fresh air in the 1980s as the houses got tighter.

Posted by: Rodney Brown at March 15, 2009 12:23 PM
Comment #277724
It is amusing to find congress so willing to decry bonuses in private industry awarded to those who have done a good job and to reward themselves with continual pay increases for doing a horrible job.
More like disgusting.

Congress has given itself a raise 10 of the last 12 years. And this year, they also gave Congress persons a raise for their $93,000 per Congress person for petty cash and expenses. Cha Ching!

Yet, voters continue to reward incumbents in Congress with 85%-to-90% re-election rates. Suckers!

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at March 15, 2009 01:46 PM
Comment #277725

BTW, AIG executive managment are giving out bonuses AGAIN ! Cha Ching!

Posted by: d.a.n at March 15, 2009 01:48 PM
Comment #277731

d.a.n said: “AIG executive managment are giving out bonuses AGAIN ! Cha Ching!”

Contracts, including those for bonuses have the force of law behind them. If the CEO’s or Boards of Directors arbitrarily breache those contracts, the bonus recipients may sue in court, in all likelihood win, because our courts MUST uphold contracts if our society is to function peaceably at all, and AIG will then incur the costs of those lost law suits easily equaling or exceeding the bonuses. Are we a nation of laws, or not? A highly debatable question in the face of circumstances such as these at AIG.

AIG is the pinnacle example of a product of the repeal of the Glass Steagal Act, which would have prevented a financial institution from becoming involved in insurance, international investment banking, retirement services, asset management, and other financial services (including financing commercial aircraft leasing) in more than 130 countries. In otherwords, had Glass Steagal Act or comparable protections been in force from the Clinton era, AIG would not constitute the threat it now poses to our entire economy. We could afford to let if fail as ONLY an insurance company, sell its parts off in bankruptcy court, and move on. But, the Gramm-Leach-Bliley Act, a primary example of history repeating itself due to ignorance of history, became a reality and AIG now threatens the viability of not only our economy but our government as well as it takes on the task of underwriting AIG’s losses to keep the economy from grinding to a halt.

AIG with all it subsidiaries tentacled throughout the balance sheets of so many other financial institutions, is the classic definition of a corporation grown TOO BIG TO ALLOW TO FAIL, due to the fact that if it fails, 100’s of other financial institutions chained and dependent upon it, would in turn fail as well. And this would cascade into a wider circle of smaller institutions dependent upon AIG’s dependents, failing as well, in a domino effect.

There is no clean, simple, effective, and common sense solution to preventing this domino effect from collapsing the heart and arteries of our economy, credit and repayment of debt. If the economy fails, the circle of people defaulting on their credit card debts, auto loans, homes, student loans, small business loans, ripples throughout our entire society grinding the pace of economic activity down to that of a snail.

And reducing government revenues by half and more in coming years, creating insecurity and fear amongst the American government’s creditors, who in turn will stop lending to the U.S., and worse, begin to demand payment from a bankrupt government whose only option to pay is to print money out of thin air, adding hyperinflation to a new Greater Depression.

There is a path that potentially avoids, in the foreseeable future (10 years) these calamities. It is one which requires insuring the financial institutions do NOT fail and keeps them from defaulting on their obligations, while at the same time maintaining and eventually stimulating the consumer demand economy back toward growing employment instead of unemployment, which in turn will increase federal government revenues.

This requires someone to step in with a few trillion dollars to make this happen. The only entity with the capacity to produce a few trillion dollars is the federal government. Is it guaranteed to work? No. But, refusing to try to make it work is guaranteed to bankrupt our government and throw workers out of jobs in numbers not even seen in nightmare scenarios before.

Our best option is to try, support, expect, and demand that these efforts work. And hold those responsible for making it work, accountable on election day.

And yes, if we are successful in preventing an economic meltdown resulting from the financial community balance sheet black hole, we will then face the crises of debt, inflation, and their mitigation, in conjunction with insuring the continuation of a healthier economy with low unemployment into the future.

The very most fundamental requirement in meeting those challenges will be developing and agreeing to stick to a plan to manage those challenges. Just as a paddler in a canoe heading upstream will make no progress if they paddle hard for two miles progress, and then rest while the current takes them back two miles, switching parties from Republican to Democratic back to Republican will guarantee failure in meeting those crises, as these parties will reverse each other’s plan and direction.

Hence, it is essential that a plan be developed which the American voters can understand, embrace, and hold future elected politicians to, regardless of their party or political persuasion. That is going to prove to be the tallest order of all in saving America’s future. And it will require a great communicator equal to or exceeding the capacity of FDR or Ronald Reagan. I see no one in the political realm at this time more qualified for that role than Barack Obama.

Whether Obama’s administration can develop a viable long term strategy to overcome the challenges ahead which the American public can understand and embrace and adhere to, is of course the question which cannot be answered at this time. Only time can answer that question.

Posted by: David R. Remer at March 15, 2009 02:41 PM
Comment #277740

Yes, I’m aware of the legal problems. There are constitutional problems with ordering private corporations not to be greedy.

So, AIG has received $180 Billion so far.

Was it worth it?

$180 Billion comes to about $590 per person (based on a U.S. population of 305 Million).
For a family of three, that’s $1,770.00 so far.

Besides, it looks a bit silly for Congress to criticize AIG for greed when Congress just gave itself its 10th raise in 12 years and $93,000 per Congress person for petty cash and expenses, while U.S. troops risk life and limb, go without armor, adequate medical care, and promised benefits, and have to do 2, 3, 4+ tours in Iraq and Afghanistan?

Propping up all of these bad banks, insurance companies, auto companies, financial corporations, etc., etc., etc. is going to cause inflation, and by the time the inflation starts rising, it will be too late to stop.

Whether Obama’s administration can develop a viable long term strategy to overcome the challenges ahead which the American public can understand and embrace and adhere to, is of course the question which cannot be answered at this time. Only time can answer that question.
Yes, time will tell, and my educated guess (based on these 20 reasons) is that there will be a more and much worse pain in a few years from now by trying to avoid pain today. The math is beyond dismal, and the massive fedreal and non-federal debt, and the federal government’s and Federal Reserve’s ability (and propensity) to borrow and create money out of thin air does not change that, and will make matters worse later by creating more debt, inflation, and then hyperinflation.

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at March 15, 2009 06:25 PM
Comment #277755

David,
You ask “Whether Obama’s administration can develop a viable long term strategy to overcome the challenges ahead which the American public can understand and embrace and adhere to, is of course the question which cannot be answered at this time.” But say that you know of no one who can challenge him.

Well, with all due respect to My Community Elders and Peers this Anti-Authoritarian Child of the 70’s takes ezception to that question. For why Newt Gingrich and others can explain a 3rd Generational Discussion to the Children of the 21st Century I do see and am amazed that President Obama is smart to include the Powers-that-Be in the group discussion about moving the nation forward.

For why I agree that AIG could and should be broke up and sold through a Global Fire Sale just as happened to many corporations of the 70’s did in the 80’s and allow the chips to fall as they may throughout the Market. However, knowing that My Elders would rather keep a vehicle intack that can provide the Global Insurance for projects that I cannot explain can be covered by anyone else. I have to question about just how far can the Children of the 21st Century take their Generational Discussion.

For if “We the People” could build a Bad and Good Insurance Company instead of a Bad Bank to cash out the bad investment once the Banks start relending and the Market is stablized. Wouldn’t that allow the Government and Society to pay (I say $.15 on the dollar)on the bad paper held by AIG and other Investors. As well as provide “We the Corporation” with an Institution capable of covering the new contracts for Insurance of doing Business?

Because why I am not sure that My Peers would agree to a straight 85% lose of their equity in exchange for insuring their Childrens’ Future. I do know some Lawyers would have fun making those deals happen for their clients. And provided that All Parties agreed in advance that any profit made by the sell of the Bad Paper be held in Community Trust for “X” years in order not to unlevel the playing field in the Insurance Sector I can see no harm until the time X year happens.

Oops! isn’t that a political solution that is different than President Obama and does not say “No” or obstruct America moving forward. I’ll let you be the judge.

Posted by: Henry Schlatman at March 16, 2009 01:37 AM
Comment #277761

The United States and other industrialized countries are sure to applaud OPEC’s decision not to cut current production levels. But while alluding to reports that President Barack Obama called Saudi king Abdullah and U.S. Energy Secretary Steven Chu’s pledge to lobby OPEC ministers, el Badri said his organization did not bow to pressure from Washington. FDR and Reagan Clout!

http://news.yahoo.com/s/ap/20090316/ap_on_bi_ge/eu_opec_economy

Posted by: Rodney Brown at March 16, 2009 10:07 AM
Comment #277764

For a contract to be a contract there must be something stated to the effect that due to nonperformance, time period, or some mitigating circumstance that would allow the contract to be null and void. Maybe it’s not a contract, dunno. Never received a bonus.
For AIG and similars to hold such sway in the US, just imagine how much power they have in a small developing country. Republic Sentry calls for anti-trust law to break up any biz reaching $100B in assets. Recognizing that Obama has only been in office for approx 100 days, nothing has been done about the too big to fail institutions and the loopholes that brought us this recession have not been tightened or closed. I’m just saying, David. And, as history has taught us, again and again, BEFORE the old loopholes are closed new ones are put in place for the next great thing.
The Justice Dept continues to work at UBS for assisting US citizens to evade taxes on their accounts. Germany and other countries are piling on but Britain is being real quite as they host some of the best tax havens in their off shore isles, such as Gurnsey and Jersey. Monaco and Lichtinstein are also big players. Kinda like too big to fail in a way. Don’t expect much to come of the investigation. Just the duopoly pandering to the voter.
And, speaking of elections - - I can see the Dem’s holding off on hot ticket issues like amnesty in hopes of taking enough seats from the Rep’s in 2010 to give them the 64 member majority in the Senate ensuring everything they bring to table gets passed into law. Already, the Dem’s are gearing up to beat up on Southern red states. Could it be that some Indies will have to vote for a few Republicans to keep that from happening? Politics makes strange bedfellows.

Otherwise, we have the government we deserve.

Posted by: Roy Ellis at March 16, 2009 11:05 AM
Comment #277772

Remer writes; “Just as a paddler in a canoe heading upstream will make no progress if they paddle hard for two miles progress, and then rest while the current takes them back two miles, switching parties from Republican to Democratic back to Republican will guarantee failure in meeting those crises, as these parties will reverse each other’s plan and direction.”

Good analogy Remer. I will expand upon it and say that the liberal PO and congress paddling madly downstream are unaware that the next few hundred feet will bring them to a giant waterfall causing the canoe to overturn and spill the occupants into the swirling waters.

Conservative prefer to stop paddling to disaster, reverse course and return to calm and safe waters.

Posted by: Jim M at March 16, 2009 02:17 PM
Comment #277773

Roy said: “Recognizing that Obama has only been in office for approx 100 days, nothing has been done about the too big to fail institutions and the loopholes that brought us this recession have not been tightened or closed.”

56 days, I believe, not 100. Finding the legal path to breaking up these too big to fail institutions is not something that can be accomplished in a matter of weeks. It requires legislative action. But, before that, it requires a thorough study of both the Glass Steagal Act and Gramm-Leach-Bliley Act, to find the deficiencies in the former, and the rational for the latter, in order to insure that new legislation does not replicate the weaknesses of the Glass-Steagal Act, incorporates compensatory measures which made sense in the Gramm-Leach-Bliley Act, and avoids completely the “too big to fail” propensity for acquisitions and mergers. There are a number of approaches, each to be carefully reviewed from modification of the anti-trust laws, (perhaps the easiest route), to executive authority over defining what constitutes too big to fail posited in the FDIC or Fed. Reserve (not an ideal solution due to political changes over time).

Breaking them up will have less impact on consumers and workers if it occurs AFTER their financial threat to the economy has been ameliorated. To break them up now, would complicate and exacerbate the inertia in money flow in lending markets. There is a rational, objective, and optimal prioritized sequence to these things, and so far, I have seen it observed remarkably well by the Obama administration.

This morning’s announcement for Small Businesses being just one of many examples beginning with attaching onerous strings to financial institutions accepting any of the remaining 350 billion of TARP funding. No free lunch from the TARP anymore as was the case under the Bush Administration’s distribution of TARP funds.

I continue to be positively surprised by the rational order of the steps taken by the Obama administration, and in light of his cabinet still remaining unpopulated in key areas, all the more remarkable.

Posted by: David R. Remer at March 16, 2009 02:31 PM
Comment #277774

Jim M said: “I will expand upon it and say that the liberal PO and congress paddling madly downstream are unaware that the next few hundred feet will bring them to a giant waterfall causing the canoe to overturn and spill the occupants into the swirling waters.”

Have you planned on what you will write if that proves to NOT be the case, since credibility in your comment’s certainty about such things would be in grave doubt? Perhaps a simple nom de plume change would be the most efficient solution?

Posted by: David R. Remer at March 16, 2009 02:37 PM
Comment #277775

Rodney Brown said: “The United States and other industrialized countries are sure to applaud OPEC’s decision not to cut current production levels.”

Applause or not, the simple fact of the matter is, a host of countries are NOT even abiding current output quotas, exceeding them rampantly in order to create revenues to shore up sagging economic conditions. Ergo, it was illogical for OPEC to enact further production quotes, highlighting their impotence in effecting such quota enforcements during times such as these.

Posted by: David R. Remer at March 16, 2009 02:40 PM
Comment #277776

d.a.n said: “So, AIG has received $180 Billion so far. Was it worth it?”

Well, time will tell. IF the economy begins growing again at the end of this year, and unemployment numbers begin to drop at the end of Spring, 2010, then keeping the financial sector from imploding the economy will, according to all those who will benefit from a recovering economy, have been worth it, if they have any regard for logic rational assessment.

A worthy question to ask is to the taxpayers 50 years from now entering the work force. Will they think it was worth it? Very likely, it will be as hotly debated a topic as whether FDR’s putting millions to work during the Depression was worth it. Those with living memory of those times say it was. Those with no memory or education about the conditions, argue it wasn’t worth it as their taxes are higher today as a result.

Posted by: David R. Remer at March 16, 2009 02:47 PM
Comment #277790

Jim M.,
Why you may be right about President Obama and Congress heading toward a fall; however, how big is the fall considering that no one can see the future?

Would you jump ship for a two inch fall? What about a 200 foot fall considering that people have survived even them?

No, the Republicans who are suppose to represent the Small Business Owner has been crying Wolf for so long that they see the Fall ahead as something that they fear; however, Independents and Democratis look at the Fall ahead and realize that no matter what the American Consumer must survive. So the question is do “We the People” close the hatches and secure the load for impact or do we do nothing and have faith that our ship will not break apart when it lands. For I do not believe that even a Golden Parachute will alow for a soft landing.

Posted by: Henry Schlatman at March 16, 2009 05:00 PM
Comment #277881

Trade War with Mexico?
Mexico has put $2.4 billion in tariffs on American items after the Obama Administration stopped some Mexican long-haul trucks from entering the U.S. http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090317_758772.htm?campaign_id=yhoo I’m Putting in a big Garden and so are many up here.

Posted by: Rodney Brown at March 18, 2009 10:29 AM
Comment #277914

Rodney, IMO this border violence results from the administration failing to keep the trucks rolling. I believe the trucks were to serve as the drug route of choice as the border fense shut down other areas. My understanding that the trucks have an EZ pass and are not stopped in either direction at the border crossing. Works well for drugs, guns and money.
So, you can bet the admin will bust their britches to get the trucks rolling again, at all costs.

Otherwise, we have the government we deserve.

Posted by: Roy Ellis at March 18, 2009 03:22 PM
Comment #277995
David R. Remer wrote: A worthy question to ask is to the taxpayers 50 years from now entering the work force. Will they think it was worth it?
50 years?

Consider 180 years to pay down $11 Trillion National debt (the largest National Debt ever in size and per-capita).

And that does not even include the $12.8 Trillion borrowed from Social Security, leaving it pay-as-you-go, with a 78 Million baby-boomer bubble approaching (which is the largest federal debt ever in size, per-capita, and as a percentage of GDP).

Consider 433 years to pay down $67 Trillion nation-wide debt ($220,000 per capita!).

How can more borrowing, debt, money-printing, and spending solve such massive debt, when the debt is already untenable?

At any rate, the voters have the government that the voters elect (and re-elect, and re-elect, and re-elect , … , at least until that finally becomes too painful).

Posted by: d.a.n at March 19, 2009 10:42 AM
Comment #278008

Off Subject but what a innovator he was , Green is the perfect color for Sunglass lenses to. http://wiki.monticello.org/mediawiki/index.php/Image:Eyeglasses2.jpg

Posted by: Rodney Brown at March 19, 2009 12:19 PM
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