The WSJ called out Mitt Romney for repeating the Big Lie in the CNBC Presidential debate:

“Markets work. When you have government play its heavy hand, markets blow up and people get hurt,” Mr. Romney said, blaming Democrats for rules that he said force banks to make ill-advised loans.

Some conservative academics have said that Fannie Mae and Freddie Mac fueled the financial crisis because they had to meet federal quotas to finance low- and moderate-income homeowners.

But academic research has shown that those mandates didn’t spur the types of exotic lending at the heart of the subprime-loan crisis. Many of the worst mortgage lenders weren’t banks and weren’t subject to federal regulation. (emphasis added)

-Debate on Economics Turns to Character, WSJ, November 10, 2011

An honest debate is possible only if we maintain a pressure on key parties to stay reality based, avoid false narratives, and stop pandering to the lowest common denominator.

Kudos to the WSJ.

Category: Bailout Nation, Credit, Politics, Real Estate, Really, really bad calls

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

40 Responses to “WSJ: Fact Checking Romney”

  1. philipat says:

    As we know, all the politicians are bought and paid for by Wall Street and the Corporatocracy, so it should not come as any surprise that Republican candidates are pushing this line of B/S?

  2. BusSchDean says:

    Barry + flashlight + blog + hotlinks + WaPo column + readers who want honest markets => Good things happen!

  3. DeDude says:

    And Kudos to you Barry for not giving up, but insisting on humiliating these people with the facts whenever they bring out their false narratives.

  4. arogersb says:

    “Many of the worst mortgage lenders weren’t banks and weren’t subject to federal regulation”. Ok, but who guarranteed their loans? If those loans hadn´t been guarranteed in the first place, those banks would have never taken so much risk. Tha loan guarrantee is in fact equivalent to subsidy to the cost of capital of enormous proportions. Since interest rates were already low and the money demand curve is convex, impact of that subsidy is multiplied many times.

    ~~~

    BR: That is the exact point: Their loans were not guaranteed by anyone. They were independent, freestanding, firms who were funded by Wall Street and sold their loans to Wall Street.

    These were nonconforming loans that the GSEs could not (and did not) guarantee.

  5. mitchw says:

    It’s useful to start learning Romney speak. When he says, ‘government play[s] its heavy hand…,’ he means/thinks, ‘we need govt. but not too much.’ This game was more fun with Clinton.

  6. Petey Wheatstraw says:

    “People” get hurt?

    Not corporate “people.”

    I’m sure Romney lost everything when the “markets blew up.”

    I guess the Dems also legislated that the banks be forced to push credit cards with usury interest rates and byzantine fee and penalty structures to anyone with a pulse (and some without).

  7. Moss says:

    Lets not forget the phony baloney corrupt ratings that were assigned to this trash so that they could be purchased ‘in good faith’.

    The ‘heavy hand’ .. That must be a Reagan sound bite.

  8. benbram says:

    interesting rebuttal that seems to be dependent on semantics. If not the government who decides who gets to makes loans and is or is not a bank, then who? making home loans seems to be a banking activity. why was it not regulated then?

  9. msmith says:

    That seems tenuous. The government pushes making loans to people who can’t repay them, banks come up with new and improved securitization to insulate themselves from the risk, the GSE’s massive portfolio backstops the market, and a gravy train of mortgage lending is created. Yeah of course unregulated mortgage lenders sprang up (who held such loans for exactly 2 seconds) but to point to their originations as proof the government didn’t have a hand in the crisis is a non-sequitur.

    Ultimately, I think what puts the lie to the claim of a Big Lie is one simple fact: Congress created the sub-prime market.

    ~~~

    BR: You win the contest for most absurdist comment of the week

    I am reminded of the excellent advice given to me by a farmer. Never try to teach a pig to sing. It wastes your time and annoys the pig.

  10. Petey Wheatstraw says:

    msmith:

    How would you explain-away the meltdown in prime and jumbo mortgages?

    http://www.eisentower30.com/meltdown/jumbo-prime-loans.html

  11. DeDude says:

    benbram;

    Anyone with a pulse could make a loan to anyone with or without a pulse, that was the scam of deregulation. Then they could purchase a AAA rating for those loans at the nearest ratings store, and sell them to teacher’s and police officer’s pension funds, because with AAA they were safe investments. The biggest scam of the GOPster de-regualtion orgie was the myth that they should be allowed to do all this because the only people they would hurt were themselves and their professional gambling counter-parties. A 16% U6 un- and under-employment rate would suggest otherwise.

  12. Milo Minderbinder says:

    Will this set an example that the New York Times, the Washington Post, NBC, CBS, ABC and CNN will follow to call out the left when they make outrageous claims? Highly doubtful.

    As to the substance, government’s failure to police the market intelligently coupled with the electorate’s greed and lenders who were permitted to package shit into shinola all bear a share of responsibility for the bubble. To exonerate one against another or cite to a single cause is simply naive or blatant bias.

    And as for the ultimate evidence of corporate greed, one need only peruse the bonuses given to the board and executives of Fannie and Freddie, all of which were political patronage appointments, pre-2008. Those bonuses should absolutely disgust every tea partier, OWS-cop-car-crapper and voter in this country.

  13. Irwin Fletcher says:

    Saying that F&F were not allowed to buy subprime loans prior to 2005 is misleading. They faced no limits on the amount of subprime MBS they could buy from private issuers that they then kept on their books. In fact, F&F bought between $340 and $660 BILLION in private-label subprime and Alt-A MBS from 2002-2007. The GSE’s actually began investing in private-label MBS in 2000. In 2002-2003 they began rapidly increasing this.

  14. gml211 says:

    From what I have gathered from the serious (i.e. academic, not (R) political clowning) work on the subject the problem has nought to do with the GSEs backing “sub-prime” or “nonconforming” loans. One of us misunderstands the argument and while I believe that person is you I’m open to a change of position.

    A cliff notes, time necessitated oversimplification of the problem as my research has lead me to understand it (I’m just a simple senior yr. econ undergrad, no expert/professional) follows.

    Mortgages get originated by private banks.
    Fannie purchases or guarantees the standardized (“conforming”) mortgages from the originators
    This effectively removes the risk of those loans from balance sheets, transferring that risk to the GSEs (in reality–to no one’s surprise–the taxpayers).
    This in turn frees up the banks to make more mortgage loans.
    Eventually the GSEs were the direct or indirect holders/guarantors of much of outstanding mortgage debt in the US (the vast majority of “prime” or “conforming” loans).
    This left most of the “safe,” or less speculative debt market saturated, but also left banks with lots of room on their books for originating more mortgage loans (due to the GSEs taking all those prime/conforming loans off their hands and giving the banks an essentially risk-free, if small per-unit profit off each one. Which obviously can add up to significant overall profits. Hello sweet privatized profit with socialized risk–something it seems we should all agree is offensive and immoral).
    With most sound borrowers already catered to, and bank’s responsibility to invest their capital to earn positive returns for shareholders in a competitive market (i.e. pressure to invest somewhere, anywhere or get ditched for those who will), they predictably, and inevitably turned their eyes towards more speculative borrowers.
    And thus the recipe for insanely irresponsible bank lending was complete (not really, what with there being many many other factors which are beyond the scope of this comment).

    Are the GSEs responsible for the financial meltdown? No.
    Could one fairly say that the GSEs helped “fuel” the financial crisis? It would seem to me the answer is undoubtedly yes. Again, I remain open to a change of opinion but so far the evidence has lead me to this conclusion.
    I think it is fairly clear that the GSEs (along with an inept Bush admin, corrupt “Too Big to Fail” banks in bed with both parties, overly complex and opaque financial “products,” irresponsible and financially illiterate consumers and, no doubt, countless other complex inputs) share at least some responsibility for the mortgage mess and resulting financial crisis.

    Thanks for your hard work on a fine blog.

    Cheers!
    GML

  15. louis says:

    Think Nixon’s staff planning burglary = 5 men arrested at DP headquarters.

    Think Wall Street Financial Product = Rating agencies stamping with Triple A.

    Now follow the money.

  16. AtlasRocked says:

    http://www.justice.gov/opa/pr/2011/May/11-crt-576.html

    WASHINGTON – Citizens Republic Bancorp Inc. (CRBC) and Citizens Bank of Flint, Mich., will open a loan production office in an African-American neighborhood in Detroit, invest approximately $3.6 million in Wayne County, Mich., and take other steps as part of a settlement to resolve allegations that they engaged in a pattern or practice of discrimination on the basis of race and color, the Justice Department announced today.

  17. AtlasRocked says:

    I have a friend who quit paying his mortgage last year when his sales bonuses were low. Things are better now, but he’s not paying his house payment still. And the bank covered his insurance and his taxes for him, without him asking them to do so.

    If the Republicans under-regulated, what is going on now, is this just-right regulation where I have to pay my mortgage but others audacious enough to stop, do not? Have the banks been integrated into the HHS Department?

    If the Democrats are all for fairness, this is not fair to me. In fact I have a whole list of liberal policies damaging their prior “benevolent” creations. Look how they’re crushing their prior pet programs in so many cases:

    - federal “safety net” programs sold to the general public as “caring”, are quickly augmented with far more massive handouts to the middle class, meaning they aren’t safety nets any more, they’re handouts to constituents.
    - The current 9% federal interest spending, due to massive social program cost increases in the last 10 years, is taking away 9% of federal $ that could have gone to the needy, taking away from all the earlier “victories” for liberal policy to be spent on the “new needy”, the federal debt.
    - Social security was raided by Clinton as he predicted surpluses far into the future. Now the fund is depleted far ahead of CLinton-era estimates.
    - Social security is allowed by the liberal factions to keep 2 sets of books, hiding the future burdens from our kids.
    - Liberal policy leaders co-mingled SS funds with the general federal expenses, so now the deficit spending for “stimulus” effectively stole from the seniors’ fund.
    - teacher unions consistently block the ability of poor inner city kids to gain access – to choose – to go the better schools. See “Waiting for Superman”, created by a Harlem educator.
    - Massive loans to students are permanently endebting our young people.
    http://www.federalreserve.gov/releases/g19/Current/ “Federal government 6″ shows $360 BIIIILLLLIIIIOOON loans to young people who don’t understand debt yet. It’s loan sharking. Obama has opposed this policy. He’s right.
    - Liberal policy leaders wanted European style medical care, so they created
    and national care plan – but skipped spending limits and high European
    tax rates to pay for the plan. The plan passes the costs to our kids,
    a group liberal claim to care about.
    - liberal leaders bailed out the banks, even though bankers are reviled by liberal advocates.
    - http://latimesblogs.latimes.com/california-politics/2011/06/university-leaders-assail-democratic-budget.html Liberals are cutting school budgets?
    - “Reckless Engangerment”. Fannie Mae was a big factor behind the meltdown. By Gretchen Morgenson, a NYT liberal reporter and Pulitzer prize winner, and the financial analyst Joshua Rosner
    - Banks are still being shaken down to loan to poor people:

    http://www.justice.gov/opa/pr/2011/May/11-crt-576.html

  18. Greg0658 says:

    senior yr. econ undergrad on a fine blog .. ask your spreadsheet to look for all the other mortgage suppliers out there and ratio it out for you .. like see “the tan man” .. then

  19. flocktard says:

    Someone at the WSJ said this? Like Osama Bin Laden getting Bar Mitzvahed.

  20. Petey Wheatstraw says:

    AtlasRocked

    “The current 9% federal interest spending, due to massive social program cost increases in the last 10 years, is taking away 9% of federal $ that could have gone to the needy, taking away from all the earlier “victories” for liberal policy to be spent on the “new needy”, the federal debt.”
    _________

    Putting it off on “massive social spending” is pretty lame.

    http://articles.businessinsider.com/2011-08-16/news/30078831_1_iraq-and-afghanistan-air-conditioning-defense-budget

    “- Social security was raided by Clinton as he predicted surpluses far into the future. Now the fund is depleted far ahead of CLinton-era estimates.”

    I distinctly remember the Republicans projecting “Clinton’s” surpluses, going forward for 20 years, in a very celebratory fashion (featuring the chimp), and then promptly bankrupting us.

    “- Social security is allowed by the liberal factions to keep 2 sets of books, hiding the future burdens from our kids.”

    The aforementioned wars were kept off balance sheet by Bushco (and may be still so, under George W. Obama). Where was your outrage?

    “- Banks are still being shaken down to loan to poor people”

    Went to the link. Didn’t see a word mandating anyone lend to an unqualified borrower — only that they provide such services in a particular geographical/demographic area. Not everyone in these areas is an unqualified borrower.

  21. DeDude says:

    @Milo Minderbinder;

    Why don’t you give us a few examples of “secret” leftist “outrageous claims” from debates amongst democratic contenders for their party’s presidential nomination (yes 4 or 8 years back). Maybe there is a reason that easily debunked lies from the left does not appear that often in the reality based media.

    But I agree with you that deregulation (of law and money) was the heart of this disaster and its lifeblood was corporate greed.

    @GML;

    A nice analysis but the professor might ask you whether the 50 years before the housing bubble and explosion in irresponsible private home loans by-passing had the same basic “drivers” available that you are holding responsible? If that is the case then your model would need something else added to explain why everything was fine for 50 years and then exploded after easy Al pumped money into the failing Bush economy. And that thing that needs to be added to make your model fit the real world, might be the only thing one reasonably could say was “responsible”. Yes without the gun the victim would not have been shot dead, but should we hold the gun responsible? I mean if the gun had not been there they would just have used a knife.

    @AtlasRocked

    Yes definitely it was $3.6 millions in loans to poor people that did it. That kind of horrific penalty of being forced to lend $3.6 million to poor minorities is certainly what would make banks take the pre-emptive strike to lend trillions our to middle class people who could not afford it.

  22. gman says:

    Atlas
    “I have a friend who quit paying his mortgage last year when his sales bonuses were low. Things are better now, but he’s not paying his house payment still. And the bank covered his insurance and his taxes for him, without him asking them to do so.”

    You obviously do not know much about business. Strategic defaults have always part of the business landscape for the biggest players. Google “stuytown’ default. Individuals are allowed to do the same thing, as your friend is. Your friend entered into a agreement w/ the lender..in the event he did not pay, they can follow proper legal channels and forclose on the property…CONTRACTS 101.
    The rest of your posts are just as moronic. They are so bad you either live in your moms basement or some paid poster from some rightwing PR shop.

  23. Theba says:

    Talking to a boomer colleague the other day relaying a story about his neighbor who hadn’t made a mortgage/taxes/insurance payment in three years and was still in the house. “Gee how things have changed!” No anger at the guy, just the feeling that its OK for him to work the system because the system allowed him to do it. As much as I would not lay blame at the feet of the borrowers for the crisis, I also don’t embrace them as savvy players who beat the oligarchy at its own game. BTW, I don’t know if this is generational– my observation is that boomers seem to act like they were children of the depression (with 75K plus tax free retirement incomes) who seem to think the system can take unlimited amounts of people not paying their fair share. They seem loathe to judge anyone who acted irresponsibly under the altruistic guise that this would be interfering in someone’s life.

  24. AtlasRocked says:

    @gman – why don’t you just google-shop some of my comments and see what right wing blog I lifted them from instead of making unsupported allegations? I can assure you they are all my writings. And, Instead of labeling my facts as tainted, bring up some counter points, bro.

    I know about strategic defaults. He has not defaulted. He is living in the house payment free. I have another musician friend who did the same thing for 2 years. Neither have defaulted.

    Now why don’t you post the most moronic thing I’ve said and let’s weigh it out? I certainly don’t want to print factually wrong or logically incorrect ideas.

  25. gman says:

    @Theba
    REITs engaged in “strategic default”..poor people ..”work the system”

  26. gman says:

    If a borrower can’t make payments and asset is worth more than the loan, the lender will gladly pocket the difference. When the situation is the inverse and the person is nobody it is “working the system”.
    Orwell would be proud..

  27. Cynic_FA says:

    Wait BR, I am confused. Did you say that Romney got this wrong and that Markets don’t work? On your list of who to blame, you had the big banks and mortgage origionators down at 8th on the top 25 list. Four of the top seven were Alan Greenspan, The Fed, Phil Graham, and the SEC. Were they the most at fault because government had a heavy hand, or because the markets did not work and government did nothing to correct it?

    Are we supposed to fact check Romney, when Cain is asking blond women in financial distress for sexual favors in exchange for employment; or Ron Paul wants to close all of government except 20% of the defense department; and Perry really did not see anything wrong with that Nigger thing. I think that when it comes to presidential politics people have two choices:

    1. Argue about truth and good government which will never be deliverred by the candidate (Like that Hopey Changey Thing!)
    2. Try to pick the least worst thing and go back to what you can control (like that 15 minute holding period in your account)

    I am leaning toward Romney as the least worst thing.

    BR, I did find this on youtube for you and the singing pigs:

    http://www.youtube.com/watch?v=PP7aoPhED6U

  28. arogersb says:

    Barry, I beg to disagree, GSEs guarranteed those mortgages. Check fannie´s 10K and 10Q reports. Those guarrantees are under debt and assets of consolidated trusts(http://www.fanniemae.com/ir/pdf/earnings/2011/q12011.pdf). And you´ll see they amount to a couple of trillion of dollars. Have a good week end.

    ~~~

    BR: We are talking causality, not post crash 2011 Q3 data.

    The period in question is from 2001 to 2005 (after which OFHEO approved nonconforming loans) versus then 2006-08 (when housing slide was in full bloom/GSEs buying junk) versus post 2008 conservatorship, when the GSEs became the only game in town.

    I’ve already done the research and wrote a book on this. If you have some data you care tos how us, please do

  29. gman says:

    @Atlas
    “I know about strategic defaults. He has not defaulted. He is living in the house payment free. I have another musician friend who did the same thing for 2 years. Neither have defaulted.”

    Sounds like a savvy move on the part of your friends. They are rationally acting in their own self interest and strategically challenging the banks to forclose on them. That type of behavior should be very easy to understand for someone posting under “Atlas Rocked”.

  30. Petey Wheatstraw says:

    If you don’t pay the amount due on an installment loan, you are in default.

  31. AtlasRocked says:

    @gman – I’m thinking you thought i disparaged them – I did not. I’m only decrying that if we are returning to MORE regulation to fix our issues, then letting people live in their houses for free is not good policy either. Neither party is delivering more or less regulations that are working. The Repub’s were too easy, and the Dems aren’t enforcing capitalism’s main premise – you have to pay or default, you can’t just get a product without paying for it. From this perspective, the Democrats have de-regulated even more – now you don’t have to pay for real estate!!!

    The notion that conservatives don’t want regulation or are celebrating Wall Street’s gains are a strawman attack. I don’t know any conservatives that are happy about what is going on. Both parties’ leadership seems to think what is happening now is ok, with varying positions of “distancing” themselves from the mess, but the conservatives I know want to STOP THE LOOTING AND START PROSECUTING.

    - Let the debt run it’s course. No more bailouts.

    - $500B budget cut next year, $500 billion more the next, $500B more the next. The total $1.5 trillion in cuts are about enough to pay off the debt in 20 years @ $1 trillion a year in principle and interest. We will not pass the national debt on to our kids.

    - William Black will be our AG. He will begin prosecutions of those who broke existing laws, including gov’t officials, that participated in MBS securities fraud, and real estate signature fraud.

    - Credit Default Swaps are outlawed in any bank or insurance or financial company involved in government or corporate bonds. CDS’ might even be outlawed, since they are giant bets, not true investments with critical, counterparty risk to reduce fraud and the motivation to do damage in insidious ways. Separate the banking business, similar to Glass-Steagall, immediately. Re-organize the banks, refund them as necessary. Put conservative, bread-n-butter, old fashioned kick ass regulators in charge – the banks will no longer available as places for trickery and deception. This idea needs more fiscal expert input for proper language. I think of this as creating “firewalls” between different groups of investment types.

    - Begin transitioning all gov’t benefits programs back to the states, including Social security. Social security will be audited, then put on a sound, fiscal footing with certified accountants and actuaries creating a set of books that will pass Standard Accounting Practices. Folks can then opt out of the system if they want. Older citizens premiums will be reduced just like everyone else. There will be deflation, we just have to work the transition back to sustainable financing at all levels of individual, business and government programs. The federal gov’t will no longer manage benefits programs, they will return to their former, successful, sustainable role where they did not indebt the citizens with their fiscal promiscuity and destabilize our money system.

  32. gman says:

    “Dems aren’t enforcing capitalism’s main premise – you have to pay or default, you can’t just get a product without paying for it.”

    The product has been paid for. It is the loan that is not being paid for.
    The banks are currently often times choosing not to call in there colateral. Often times they are doing that out there own “atlasian” sense of there own best interest. The banks already know the own too much inventory in a given area, if they forclose they will have to mark loses on their own books that they are now hiding. Further distressed sales will just depress prices more hurting the banks own portfolio of REO. This would then incentivise further strat. defaults. All of this would just further the downward spiral.
    I can’t speak to broad range of platitudes and prescriptions you have for society. I do know that many of your assesments about Banks, real estate and financial markets are just not grounded in an understanding of how people and instituions REALLY act in there own self-interest…which is surprising considering “ATLAS ROCKED”!

  33. AtlasRocked says:

    @gman, Yes I recognize the occupants aren’t paying back the bank, but the premise is the same. The occupants are supposed to be paying back the banks that loaned to them, and the banks aren’t collecting because they, in their own self interest, don’t want to book the loss because their books are incorrect. Now you know why I made the “banks are part of the HHS now?” comment – the banks are providing rent free housing, they are part of a massive middle class housing subsidy program.

  34. AtlasRocked says:

    @Petey Wheatstraw – Only have time to get to one of your comments.

    Regarding the cost of the war, I went to the CBO spreadsheets, added up all of the increases in defense spending in 2001-2009, and all the social spending increases in the same period. Social spending increases were 3.5X more than defense. In a ratio, they came to around 755 of Bushes spending increases were due to social spending increases. Defense spending was 20% of spending in 2000, and it’s around 20% now.

    In a more accurate sense, I could say 80% of the deficit is due to social spending increases, 20% to defense, but over the last 50 years, defense, as a % has been almost steadily falling from 45% to 20% of the federal pie chart, while social spending went from 5 to 60%. If the whole federal budget tracked defense increases in constant dollars, we’d have a huge surplus now.

    It’s hard to cite a falling cost % item as causing a deficit, right?

  35. AtlasRocked says:

    @Wheatstraw:

    Clinton surplus myth: http://www.craigsteiner.us/articles/16

    Both Democrats and Republicans are all running this year and next and saying surplus, surplus. Look what we have done. It is false. The actual figures show that from the beginning of the fiscal year until now we had to borrow $127,800,000,000. – Democratic Senator Ernest Hollings, October 28, 1999

    ~~~

    BR: Seems like a rather tortured explanation –especially for an issue that is off the current topic . . .

  36. leveut says:

    Wheatstraw: “- Social security was raided by Clinton as he predicted surpluses far into the future. Now the fund is depleted far ahead of CLinton-era estimates.”

    I distinctly remember the Republicans projecting “Clinton’s” surpluses, going forward for 20 years, in a very celebratory fashion (featuring the chimp), and then promptly bankrupting us.”Clinton surplus myth: http://www.craigsteiner.us/articles/16

    —-

    Atlas: Both Democrats and Republicans are all running this year and next and saying surplus, surplus. Look what we have done. It is false. The actual figures show that from the beginning of the fiscal year until now we had to borrow $127,800,000,000. – Democratic Senator Ernest Hollings, October 28, 1999

    ~~~

    BR: Seems like a rather tortured explanation”

    ————————————————————-

    That’s funny!

    It is a “rather tortured explanation” to point out that in the years Democrats claimed there was a surplus, even Ernest Fritz Hollings (an ignorant gap toothed racist Southerner) could figure ou there was no federal government surplus if the public debt increased in every year?

    That is really funny! But it is Ritholtzia.

  37. Petey Wheatstraw says:

    AR:

    As you’ll see in my comment “Clinton’s” is in quotes. I don’t know if Clinton ran a surplus or not (it’s irrelevant). However, I do know that shortly after Bush was selected President (maybe only days after),the Republicans said he had a surplus, and that it was as good as a sure thing for the following 20 years, and they acted on it. Then they sold us down the toxic river of bad debt (and other unsavory things). Now, if Clinton didn’t, in fact, have a surplus, then that only makes the Republicans look dishonest and/or stupid.

    You seem to be trying to prove that the Republicans and their misguided faux “conservative” policies didn’t utterly fuck things up beyond salvation. They did. Beginning with Reagan and ending with Bushco (Obama has continued down Bush’s path, somewhat, but it’s not like he’s the one who lit the fire — what’s he s’posed to do, piss on it?).

    As I read your original comment, I could only think of the scene in Star Wars where Anikin is rolling around on the ground, on fire and legless, screaming, “I hate you!” Must suck to be a die-hard apologist for the failure of conservative ideology.

  38. AtlasRocked says:

    BR, Wheatstraw: The Craig Steiner is a thoroughly documented explanation of what went on at the end for Clinton/Gingrich era. (Yes Gingrich was a part of it too.) Yes it is tortured, that’s what the western democracies are all doing now, putting lipstick on fiscal pigs. Both parties contributed to the mess.

    Wheatstraw: While you’re bragging about how things started going south under Bush, can you comment on the bipartisan support for Gramm-Leach-Bliley:

    http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act
    Note it says: On November 4, the final bill resolving the differences was passed by the Senate 90-8,[13][note 4] and by the House 362-57.[14][note 5]. It was a thoroughly bipartisan repeal of Glass Steagall. What went on before this? Read on, bro.

    CLINTON ALLOWED A BYPASS OF GLASS STEAGALL: A year before the law was passed, Citicorp, a commercial bank holding company, merged with the insurance company Travelers Group in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities and insurance services under a house of brands that included Citibank, Smith Barney, Primerica, and Travelers. Because this merger was a violation of the Glass–Steagall Act and the Bank Holding Company Act of 1956, the Federal Reserve gave Citigroup a temporary waiver in September 1998.[1]

    ~~~

    BR: Clinton, Rubin & Summers get much of the blame for the crisis in Bailout Nation — not just for the repeal of Glass Steagall (which didnt cause the crisis but probably made the damage much greater), but also for passing the Commodity Futures Modernization Act of 2000 which utterly exempted derivatives from any oversight, reserve requirements, counter-party disclosures, etc. .

  39. AtlasRocked says:

    I don’t get it Barry. You write a book “bailout nation” but keep advocating massive deficit spending – a bailout – by the US gov’t. Can you summarize why the seemingly opposite sentiments are advocated by you? I’m assuming you advocate deficit spending because you ridicule my advocacy of cutting spending.

    Have you really seen a case since WWII where a nation deficit spent it way out of a hole, with no spending cuts at all, and repayment was made on the debt created?