Jack whines about low wage jobs and then condemns high wage Wall Streeters. I think Obama has promised that he will find a way to get us all high paid jobs on Wall Street.

Nice try David on CDS. Clinton signed the bill and a Democratic congress did nothing the past two years. In any case, CDS didn’t cause mortgage defaults to explode, CRA did. Another do-gooder program doing bad. This is what Easton got and you didn’t.

I would really like the Presidential candidates to tell me what is a fair rate of income tax. The top 5% of income earners page 60% of all income tax collected, the bottom 1/3 pay nothing. Is that fair?

Thank you for standing up to Nina. There is nothing greedy about wanting to own a home in a safe neighborhood. The problem is that wages are low and citizens are being priced out of the American dream. I will say the people who bought multiple homes in speculation were being greedy and deserve whats coming to them. Too bad they don’t have the golden parachute like the CEO of the banks that loaned them the money.

I agree with all your points on the bond rating agencies, CDS, CMOs, etc. There is one thing I’d like to add: the oversight and the required capital requirements on firms that wrote the credit default swaps was woefully inadequate. Had this not been true, there would’ve been less availability and higher prices on this bond insurance, leading to fewer customers for this debt, and reducing the size of the bubble.

The one point that seems to be missing is why these mortgages failed. No one wants to draw the conclusion that for a few years people could afford these mortgages, or at least things were not dire.

So what changed in the last few years? Gas prices have increased causing food prices to rise and just as home heating and electricity costs have increased, while living wages have not.

Could it have something to do with the way we have built America? Sprawl, dependence on the automobile and continued emphasis on a growth economy? Fairly universal, certainly non-partisan. I think this whole economic crisis is a non-partisan issue in the terms that the show focused on. I think it is fully American. Keep the credit coming.

I was rooting for Tom in his differences with Nina, but going beyond the points at issue for a moment — I found it a bit disturbing that Nina’s whole method of evaluating an argument was not What Was Said, but rather Who Said It. If a Democrat says intemperate poor people caused the crisis, well, that’s solid supporting evidence, never mind whether the “Democrat” was right- or left-wing, or whether he or she knew anything about economics or finance, or whether he or she was an idiot. A Democrat said it and it goes against the liberal consensus so it’s profoundly revealing and probably true. And Nina’s snort of contempt at the very idea that Jack might cite a “liberal” think tank in support of anything — again, before he even managed to say what they had said!

2 points, then: 1) When Greenspan was talking about “ideology”, I don’t thnk he meant (or should have meant) a party platform. He was talking something deeper, something most folks would describe with a word that Nina used: zeitgeist. It may be something identiified with Reagan, but it began even earlier — with Carter, or maybe with the New York City bailout — and it sank into the souls of Democrats as much as Republicans, and even into the most liberal of the liberals. The deification of the market as the transmuter of selfish actions into social benefits. If it does this at all, it does it under very specific, tightly contained and regulated conditions.

And 2) This almost makes me come around to Obama’s notion that the solutions America needs will have to overcome petty partisanship. I don’t know if the country’s quite ready to overcome them to the extent necessary, but clearly, if Nina is any example, few of even the brightest people in the country can see through their party-based blinkers.

See:

http://www.mcclatchydc.com/homepage/story/53802.html

The first angle is a hidden culprit: the bond ratings agencies.

The second is less hidden: aversion of debt.

On ratings agencies: despite all kinds of bad behavior — greed, self-interest, etc. — if the ratings agencies had more accurately priced the risk of mortgage-backed securities, Fannie and Freddie would have not happened so easily. Their role in this mess is that they bought “junk mortgage securities” — like junk bonds — that were worth a lot less than they paid.

Essentially, these junk mortgages were packaged with “insurance” — called credit default swaps (CDSs)that were made up of complex, sophisticated financial instruments that include derivatives and hedges. So, what ever happened to that insurance? Didn’t it work?

Well, no, and it was never priced as insurance. If it’s insurance, where are the reserves that back up that insurance? Well, lobbying of Congress not to label CDSs as insurance (let’s leave aside who did that) resulted in the super-high leverage situation that is now crashing around us.

But, if the ratings agencies had priced CDSs as unreserved insurance (VERY RISKY), what kinds of prices would they have traded at? And wouldn’t it be a lot clearer to everyone (including the Europeans and Chinese who bought a lot of these securities), that they were junk? And wouldn’t that have caused the market to increase prices for that junk to the point they were undesirable?

That’s the scenario free marketers would have expected to kick in. But it didn’t, because we were not operating within the bounds of free market rules anymore. The pricing mechanism had failed.

Now the second point is about our attitude towards debt. In short, bubbles are caused by speculation. But there’s a natural level of speculation that will always occur, because there’s always going to be greed in our world.

But, when people and companies and governments all forget that debt is to be avoided when possible, then that speculation balloons. Individuals decide not to save the 10-20% downpayment for a house, and they get into a debt obligation that could crush them. Investors borrow money so they can invest/speculate more. Our government doesn’t tax the people to pay for programs (from FHA to Iraq), but rather borrows the money for future generations to pay.

I mention debt aversion because it could have cooled this whole thing off, no matter how imperfect the market mechanisms (like pricing) were.

I lost my entire life savings because of one decision: I chose to acquire my company shares on margin, and I didn’t pay off that debt as my first priority. Then shares fell, and margin calls gobbled everything (and left me with a massive tax hangover afterwards). I think a lot of our financial problems can be traced to debt.

I currently have expenditures that I really want to make. I want to re-side my house, and Home Depot offers a pay-nothing-for-one-year financing program. My wife and I looked at our battered siding and decided — let’s wait and save the money and pay cash for it. Who knows what will happen in one year.

Morphing the phrase “spreading the wealth” into
socialism is a stretch. Sen. Obama wants to raise the tax rate on a certain segment of the population to what it was in the 90s. Did we have socialism in the 90s?
I heard the bail out described as a huge piece of
socialist legislation. It was asked for by a Republican president and a Republican Sec. of the Treas. And some want us to worry about Sen. Obama being a socialist as they overlook what has just taken place.

I’m not at all impressed with the analysis that I heard put forth on this broadcast. It was just partisan
rhetoric.

Although in our minds self-interest and collective-interest may be thought of as separate, opposite and in conflict with one another they are in fact always intertwined, they form a dynamic. It is plain for all to see that it is in everyone’s self-interest to be part of various collectives of one sort or another be it a family, school, club, business, gang, community, etc. Forming and being part of collectives is in the self-interest of everyone because that is how everyone’s self-interest can best be realized. One participates, then, in the maintenance of collective organizations as a means of fulfilling one’s self-interest while it is in the interest of the collective to allow individuals to pursue their own self-interest, which includes maintaining the collective-interest.

David Goldstein and Kevin Hall of McClatchy (which was also about the only paper to report on the Bush Administration lies that got us into Iraq) conducted an analysis showing that only one of the top 25 subprime lenders was even subject to that law because it applies only to depository institutions—banks and thrifts. A study released earlier this year by a law firm specializing in Community Reinvestment Act compliance estimated that in the 15 most populous metropolitan areas, 84.3 percent of subprime loans in 2006 were made by financial institutions not governed by the CRA.

Furthermore, Congressional testimony last year indicated that a huge chunk of the subprime mess was refinancings in suburbia, not originations in minority neighborhoods, as the CRA myth would hold.

To the extent mortgages were a problem, David Abromowitz in the LA Times a few weeks back laid out the details of how the Bush Administration, through the Office of the Comptroller of the Currency crippled efforts to address all the predatory lending.

But what clearly caused the broader crisis was Republican-driven deregulation. The most amazing story to me is of the Commodity Futures Modernization Act. Phil Gramm slipped it into a huge omnibus appropriations bill, via a House-Senate Conference Committee, in the middle of the night back in 2000, just after the Supreme Court handed the White House to Bush. The bill had never even made it to the floor of either chamber before being grafted on in conference. The bill expanded the range of derivatives that could be created, expanded the range of institutions that could buy them, and obliterated effective oversight of what would subsequently grow from a $900 million derivatives market into a $62 trillion (with a “t”) derivatives market.

The CFMA enabled the credit default swaps that killed Bear Stearns, killed Lehman, and may still kill AIG — as well as the whole global financial system. There are now a lot of asset bubbles besides mortgage-backed securities fueling the broader crisis, and it all ties back to the insane leverage enabled by these swaps.

That you let Easton get away with such distortions is nothing less than a disgrace — and there should be an obligation to set the record straight.

God bless Jack Beatty! Give em hell, Jack. No quarter.

Protofascistic propaganda. I say can Easton from now on.

They operate in bad faith at nearly every turn. I don’t believe they should be considered a legitimate news organization.

Ms Easton is an ideologue and a political hack, not a journalist.

SEERS10 05/07/2004

My condolences really, to the secretary of state, GEN Collin Powell. How long can you sell your dignity, and still retain any kind of self-respect.

I bet right now he is lying awake in his bed, wondering if he could have made more money by exposing his boss for what he is, had he done it before the invasion. How does a person go around the globe, facing people that know you to be a spinless liar. How much money in speaking fees, and how many seats on boards of directors equal ones honor.

How long do you wish to continue the charade Mr. Secretary. Where is the honor of a four star general. Your boss let you down, your fellow cabinet memebers have proven out to be a bunch of liars. And the king is naked, do you have enough honor to admit you were a dope. Do you continue to go around the globe, promoting lies. Do you feel no shame that if you are not lying out there yourself, you are the bottom of the food chain, not even trusted by your boss, your president, your commander-in-cheif.

I will stop here now and wait to see if you can soon find your spine (M.N.R)

tombstone001

I’m beginning to suspect your loyalty. Watch yourself.

See, the Joe Sixpacks and Joe Plumbers out there should be running the show.

I’m sick of being told what to do by a bunch of “experts”. I’m sick and tired of our foreign policy being conducted by “statesmen.”

And I’m sick of the liberal establishment and its newspapers sending “reporters” out there to find “facts.”

It’s time to get America back on track. That means fighting them there before they come here. That means being on the side of Joe Sixpack and not the elitist establishment.

My contention is that this is a schred political move, similar to uncharacteristic, and supposedly spontaneous, outburts of emotion by Clinton.