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I’m not an economist, I am an optimist
The President gave a press conference July 15 in which he answered questions about the economy. He discussed the housing market, gas prices, off shore drilling and various budget issues including the Defense appropriations bill. In his speech, he said, " I am not an economist." Finally, the truth...I am shocked he didn't claim executive privilege. Considering some of the statements he made, it may have been better for him to do so.
The following is a direct quote taken from the President's speech. " It's been a difficult time for many American families who are coping with declining housing values and high gasoline prices. This week my administration took steps to help address both these challenges...To help address challenges in the housing and financial markets, we announced temporary steps to help stabilize them..." Fannie Mae and Freddie Mac buy mortgages held in the U.S. They fund about 80% of home purchases and refinancing. They do not hold sub-prime mortgages and they provide liquidity for the U. S. to finance its budget and trade deficits. Freddie Mac has announced it plans to sell off billions in shares because it is struggling. Indymac, a Southern California Bank and mortgage lender buckled recently. According to U. S. regulators, it is the largest regulated thrift fall and the second largest financial institution to close in U.S. history. Indymac checks are not being honored at other banks and it is under investigation by the FBI. Luckily that is not the fate of Fannie Mae or Freddie Mac, the government has stepped in with a plan to strenghten both lenders by authorizing the Treasury Department temporary authority to buy shares and the aid of monies from the Bank of New York.
This plan may help in the short term however, according to Standard & Poor's Corporation, a credit agency, it could cost taxpayers up to one trillion dollars overall. The government bailout is like placing a bandaid over a gapping wound. The president says it is a temporary step to help stabilize...stabilize what? Robbing Peter to pay Paul and bailing out these lenders will cause it to be more difficult to get a loan, weaken the dollar, increase oil prices and the national debt in the long run. The president said, "All I know is good policy will help expedite a -- will strengthen our economy and we can pass some good law to help expedite the recovery..." He also said, "The American people are plenty capable and plenty smart people and they'll make adjustments to their own pocketbooks. That's why I was so much in favor of letting them keep more of their own money. It's a philosophical difference: Should the government spend their money, or should they spend their own money?" I don't know what is more embarrassing, the fact that the President can not speak in grammatically correct sentences or that he is trying to sell the American public a line of bull. Bailing out mortgage banks with monies from the Treasury is the government spending Americans money. What is the good policy he knows about? What good law would help expedite recovery? Apparently the best policy this administration has been able to develop over the last eight years is to short sell when in trouble and tell the American people to turn their air-conditioning off when they are not home.
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- What billionaires? At Indymac?
By Denise in San Mateo County on Jul 19, 2008 3:24 PM EDTOr was that just a general statement cuz there aren't that many "billionaires" banking there, that's for sure. Video showed middle class folks standing in line to take out their money - what was left of it.
- Fannie and Freddie--drains on the public purse
By Huron John on Jul 19, 2008 1:10 PM EDThttp://www.counterpunch.org/whitney07182008.html
The Fed's emergency rescue plan for the financial markets is hopelessly flawed. It's a scattershot approach that doesn't address the real source of the problem; an unregulated, unsustainable structured finance system that emerged in full-force after 2000 and spawned a shadow banking system that creates trillions of dollars of credit without sufficient capital reserves. This is the heart of the problem and it needs to be debated openly. The present system doesn't work; it's as simple as that. It makes no sense to provide trillions of dollars of taxpayer money to shore up a system that is essentially dysfunctional. It's just throwing money down a rat-hole.
The Federal Reserve and US Treasury want a blank check to prop up Fannie Mae and Freddie Mac, the two war-horses of the mortgage industry, that currently underwrite nearly 80 per cent of all new mortgages in the US. But by any objective standard both of these GSEs are already insolvent. Thus, the taxpayer is being asked to rescue a failed industry that has been used for private gain so that speculators will not have to suffer the losses. Even worse, Fannie and Freddie have written hundreds of billions of dollars worth of mortgages that have not yet defaulted, but will certainly default within the next two years. This is bound to batter the already faltering economy.
since economists are more often wrong than right, claiming not to be one is a safe bet.
That said, the stated aim of providing "stability" is a central problem. Somehow, these people have become convinced that stability is the holy grail of human existence. It's what they're aiming to provide with the invasion, occupation and building of bases in Iraq. Since the world is naturally in a state of flux, aiming for stability--i.e. no change-- is a hopeless cause. Of course, if things were stable, then it would be easy to predict the future. And that may well be the motivation for creating stability--to avoid surprise. But, however logically consistent, it's still totally unrealistic.
Of course, given that context, the Obama call for change is merely being realistic, while the conservative call for change is retrograde. In other words, realists want to go with the flow; the stability freaks want to go back to how things used to be.
Nick Mitchell of Americans for Campaign Reform writes to interested voters:
"We've been fielding a lot of questions recently about Barack Obama's decision to forego public funding for his presidential bid. Many folks fear it might be a setback for our cause.
"We see it differently. Obama is a staunch supporter of public funding. Explaining his decision in a recent op-ed in USA Today he said, 'I wholeheartedly agree with the idea that we need to limit the influence of big donors on campaigns, and I've co-sponsored legislation to fix the system. I am firmly committed to reforming the system as president, so that it's viable in today's campaign climate.' In fact, Obama has cosponsored each public funding bill that Americans for Campaign Reform has endorsed.
"So, why did Obama opt out of the public financing system? Quite simply, the system is broken: Congress has failed to update the amounts that the system provides as the cost of campaigns has increased. Obama believes, and we happen to agree, that the amount of public funding he would have received is insufficient to run a competitive campaign unless he were to rely heavily on both party expenditures and independent 527 expenditures in addition to the public funds.
" . . . .
"Like an elephant (or donkey) sitting in a room, the presidential race tends to draw all of the attention. But our current push continues to be on Capitol Hill. We've made great progress in recent months in conversations with key Senators and Representatives. But more members of Congress need to be shown that their constituents will settle for nothing less than full public funding.
"We need your help now. Please contact your representatives today. They need to hear this directly from you."
So it's clear, at least to some advocates, that despite its satisfying and pleasingly doctrinaire extremism, the ritual suicide of a candidacy helps to promote the cause of publicly funded campaigns less than the election of a candidate who has pledged to champion the cause, and whose financing comes from a vast group of small contributors who share his concern about this important issue.
whose financing comes from a vast group of small contributors who share his concern about this important issue.
Only half-vast (pardon the pun). Over half of Obama's funding comes from fat cats, who will want something for their money.
I do agree with his decision to opt out of the fatally flawed public Finance system
- You never do prove this claim which is your responsility to do so. Which fat cats and how much?
By Denise in San Mateo County on Jul 19, 2008 3:27 PM EDTYou could look it up. I don't feel a responsibility to document it, but every post I've seen shows donations under $200 at less than 50%
OK Ms Prissy?
http://dealbook.blogs.nytimes.com/2007/07/16/obama-donations-show-strong-wall-st-support/
http://rawstory.com/news/2008/Clinton_Obama_both_bank_major_donations_0219.html
http://tothecenter.com/news.php?readmore=5867
Some of Obama’s top contributors are Goldman Sachs ($571,330), UBS AG ($364,806), JPMorgan Chase ($362,207) and Citigroup ($358,054). Some of McCain’s are Merrill Lynch ($230,310) and Citigroup ($219,551).
- Miss Prissy? Just take responsiblity for what you post. Never put the burden on others for facts you claim.
By Denise in San Mateo County on Jul 19, 2008 4:37 PM EDTAnd are you sure these are not bundled contributions from employees at these companies? We go round and round on this issue which is why I wanted you to source it. Why would I, I wasn't making those claims?
From the June 2007 article you posted:
Employees of three big investment banks and one major hedge fund were among the leading sources of cash for Mr. Obama, according to data filed Sunday with the Federal Elections Commission
The article didn't mention bundlers---you could look it up
- Bundlers? It's up to you to define it and prove it
By Denise in San Mateo County on Jul 19, 2008 4:45 PM EDTIf you can't then it's an immaterial claim. You might learn something, too
Federal Election Commission records shows that Clinton and Obama both received hundreds of thousands of dollars of donations from Greenberg Traurig staff. Moreover, each candidate has particularly benefited from the largesse of the firm's top management and its registered lobbyists.
- STAFF AND MANAGEMENT are employees - why is that hard to get?
By Denise in San Mateo County on Jul 19, 2008 4:54 PM EDTCheck out open secrets regarding lobbyists
http://www.opensecrets.org/pres08/select.php?cycle=2008
It's current info too
Still no where near the HALF of his donations that you claim
- And be thankful you don't have to figure out what SMALL percentage these totals are compared to how much he has raked in so far. Are ya good in math?
By Denise in San Mateo County on Jul 19, 2008 4:38 PM EDT
- Yep all employees of those firms, and no where near the HALF of his donations you claim.
By Denise in San Mateo County on Jul 19, 2008 4:44 PM EDTThanks for providing the links so we can expose the truth :)
NOW LET'S PUT THAT MYTH TO REST PLEASE
I work for a biotech company. Companies employ people. People give money. What a concept.
Bundled contributions from employees of a single company shout for the company, not for individual donors.
If they don't want their donations used as a lever for their company, they should send them individually
Everytime I donate to a campaign, I have to submit what I do for a living and who I work for. THAT is how they get this information.
I am not sure how much more I can make you understand that it is ILLEGAL for CORPORATIONS to directly (as through their Board) donate to a political campaign.
OK??
- In other words, it is not money coming directly from the corporations' books.
By Denise in San Mateo County on Jul 19, 2008 4:57 PM EDTOK going to the new thread now. Hope I cleared that all up for you and anyone else that is still misinformed about this.
“Sen. Obama went to Wall Street to tell executives that our economy isn't working if they alone are prospering but people living on Main Street are not," Obama’s spokesman said.
Megan McArdle on debt in America
http://audiovideo.economist.com/
___
Ms McArdle, a blogger for The Atlantic magazine, explains why Thomas Jefferson was heavily indebted and her own grandfather wasn't
Her Blog: ASYMMETRICAL INFORMATION
http://meganmcardle.theatlantic.com/
_ - _
On David Brooks' Op-Ed (June 10th) ...Ms McArdle says, "I would say that's - triple distilled balderdash"
Fannie Mae and Freddie Mac
End of illusions
Jul 17th 2008
From The Economist print edition
[...]
If Congress approves this package, the Fed will have more authority over the agencies. But that will give the central bank another headache. If an institution is struggling, the normal answer is to shrink its activities and wind it down slowly. But that is the last thing that the housing market needs right now.
With the credit crunch, Fannie and Freddie have become more important than ever, financing some 80% of mortgages in January. So they will need to keep lending. Nor is there scope to offload their portfolios of mortgage-backed securities, given that there are scarcely any buyers of such debt. And if the Fed has to worry about safeguarding Fannie and Freddie, can it afford to raise interest rates to combat inflation? American monetary policy may be constrained.
The GSEs are not the only liability for the government. IndyMac’s recent collapse is the latest call on the Federal Deposit Insurance Corporation (FDIC). The FDIC has some $53 billion of assets, so it is better funded than most deposit-insurance schemes. But if enough banks got into trouble, the government would be on the hook for any shortfall. The same is true of the Pension Benefit Guaranty Corporation, which insures private sector benefits, but is already $14 billion in deficit.
In the end, the turtle at the bottom of the pile is the American taxpayer. But that suggests that, if Americans are losing money on their houses, pensions or bank accounts, the right answer is to tax them to pay for it. Perhaps it is no surprise that traders in the credit-default swaps market have recently made bets on the unthinkable: that America may default on its debt.
But that suggests that, if Americans are losing money on their houses, pensions or bank accounts, the right answer is to tax them to pay for it. Perhaps it is no surprise that traders in the credit-default swaps market have recently made bets on the unthinkable: that America may default on its debt.
America is bankrupt, both economically and morally. We're not being taxed to pay for these horrendous wars/occupations, so I wouldn't expect the craven Congress to adopt a "pay-as-you-go" strategy for bailing out F&F. Even if they did, Bush would veto it.
This whole process will simply accelerate the cycle of stagnation and inflation, and bring us closer to the ultimate collapse.
The super-rich will survive--they always do. But the rest of us will be consigned to the "WC".
If our Federal Government takes over Freddy and Fanny... then we pay as they go.
It is like a tax. Debt is in the end a tax. Who pays? You: the tax payer.
- Right - anyone that misused credit is to blame for the latest debacle, which has been brewing for decades.
By Denise in San Mateo County on Jul 19, 2008 3:32 PM EDTIf ya don't have the money don't buy it. Pretty simple
that's what the Bushes were planning. You see, honor which is the foundation of confidence and trust has completely disappeared from American enterprise and transactions. There was a time when people could be expected to handle other people's assets with more care than they accorded to their own. That attitude has been replaced with the assumption that other people are asses if they entrust their assets to anyone else and deserve to lose them. Trust has been transformed into a weakness.
The consequence is that the American economy has lost all credibility.
When Dodd and Obama and Biden talk about restoring America's moral authority, that's what they mean. America has sunk into a cesspool of immorality (which has nothing to do with personal sexual relations and everything to do with social relations) and it's going to take a lot of effort to pull ourselves out.
- Sorry Paine I needed the tool bar. Hi bfa folks! Here is a new group you can join.
By Susan Rowe on Jul 19, 2008 2:02 PM EDT
but what promted it? Are there people who want to test their notions and want feedback? Is there a set of tools, which the group can use? Why a group, or atleast why this group (name) test and poll ?
Jus' wonderin'.
- We can call it any name you want except wc. It's for us folkies at the bfa community to set up polls, etc.
By Susan Rowe on Jul 19, 2008 2:48 PM EDT
- It was my idea, I created it and promoted it. Please promote it too.
By Susan Rowe on Jul 19, 2008 2:56 PM EDTIt's for all of us at the bfa...
DFA now has over 78,000 members, according to
DFA users
That's people who have registered for an account; not just people who are on DFA's mailing list, which I assume to have passed a half million a long time ago.
How many of these people come to BFA? That's a good question. If other sites are comparable, there's at least a thirty to one relationship between readers and posters. Who knows why?
Lots of people are just loath to voice an opinion unless they are well-informed. That should not be held against them. Nevertheless, their interests should not be ignored. That's why I've consistently argued that discussion on the blog should be aimed at a much larger audience then announces itself.
Which is why I particularly object to the WC. Aside from being an effort to segregate, it sends the message that if comments are not judged to be totally relevant (according to someone's fallible judgment), they will be sent to purgatory-- a strategy that's sure to depress participation further.
The DNC Blog has a good way of combining topical threads (which don't draw flies) with open threads of at least 12 hours duration. If we can't go back to what worked so well before (and I don't see why we can't) this might be a viable option (As opposed to vigorously policed topical threads, and a segregated, short-duration Water Closet.)
Your comment seems to hold value for Susan's fledgling test and poll group, for I think we agree (without testing and polling) that what you state at the end of your comment is true.
If Susan, or whoever, can test and poll this question, then at the very least Susan's group can ...get up and start running. It could be the perfect start ...
- They can join this group too if they post comments and write blog posts.
By Susan Rowe on Jul 19, 2008 3:00 PM EDT
Barack in Afghanistan -- more at the link, where I 'borrowed' the picture (hope I don't blow the margins):
http://www.dailykos.com/story/2008/7/19/10443/3921/404/553863
Obama, "I will take the war to Afganistan, and Pakistan"
- Times are rough, but you still have your health...well, maybe
By Fred from Oregon on Jul 19, 2008 2:44 PM EDTSuspicion Surrounds Firing of EPA Panel Chair
Chemical Industry Request Prompted EPA Dismissal of Toxicologist From Peer Review Panel
In a surprising move last year, the Environmental Protection Agency fired the chairwoman of a chemical review panel six months after the panel took place. When Dr. Deborah Rice, a toxicologist for the Maine state health department, was thrown off a peer review panel at the request of the chemical industry, the EPA's ethics were called into question....
Rice, 61, had worked for the EPA for four years before joining the Maine Dept. of Health and Human Services. In 2004, she had been awarded one of the EPA's most prestigious scientific awards -- the Scientific and Technological Achievement Award -- for her "exceptionally high-quality research" on the toxicity of lead. Regarded as an expert in environmental toxicology, Rice was asked by the EPA to chair a February 2007 review panel on the fire retardant deca (or decabromodiphenyl ether). The five-member panel carried out a standard review of the chemical's safety.
Rice has served as an expert on more than 30 review panels and assessment committees for the EPA and other government agencies. In fact, since she was fired from the deca panel in August, she has served on another EPA review panel -- for the metal thallium.
As Rice remembers it, she did nothing different on the deca panel than all her other panels. But she was later dismissed, after the American Chemistry Council, the lobby group for the chemical industry, wrote a letter to the EPA asking for her removal. The EPA charged her with conflict of interest because she had previously recommended the banning of deca to the Maine state legislature. (Maine has since passed the ban.)....(read more)
http://www.washingtonindependent.com/view/suspicion-surrounds
come up with a new term for "environment." "our surrounds" seems a bit awkward because it's two words. But, "environment" is, first of all, French, and, second of all, stand-off-ish and antagonistic. We need a more people-centric term.
Though, it is also french.
to describe the toxic soup we dwell within. Biosphere is also a good general term.
- Ambience refers too much to decorative surroundings.
By Fred from Oregon on Jul 19, 2008 3:28 PM EDTThe mood-enhancing atmosphere. And you cannot change that.
- Dean's are first
By Huron John on Jul 19, 2008 12:39 PM EDTWhy do we taxpayers have to bail out the Billionaires (who by and large pay no taxes)?