White House Philosophy Stoked Mortgage Bonfire: New York Times

New York Times:

The global financial system was teetering on the edge of collapse when President Bush and his economics team huddled in the Roosevelt Room of the White House for a briefing that, in the words of one participant, "scared the hell out of everybody."

Read the whole story: New York Times

Comments

[ElPerro]

I just watched James D. Scurlock's "Maxed Out", about the scam of "easy" credit. It was filmed back in 2006 but anyone who watched it could have easily seen this crash coming. Not only was the house built out of cards, but the cards were dousing in kerosine and the lenders and their government enablers were waving lit torches about.

[DallasNE]

What happened was predictable and predicted. The dogma of the Republican Party assures the very problems we have seen. Our first clue of that dogma was revealed during the 2000 election where Bush promised the same Social Security dollars to two different groups. Much the same thing happened here. On the one hand Bush had a goal of greater home ownership while on the other hand he had tax policies that assured that the dollars needed for that greater home ownership was instead moved into the hands of the top 1%, creating the greatest concentration of wealth in the hands of the wealthy since 1928. Hello! What happened with housing would have happened with Social Security had Bush gotten his way. We now have a $1 trillion annual deficit because Republicans have become clueless and unconcerned by borrow and spend gone wild. They have simply become blinded by a dogma designed for failure. Well, they got their wish -- to our regret. Worst President ever is too kind in describing George W. Bush.

[Chopin]

Part 2:

The first 4 problems have come and some gone. But the last 2, and by far the most longlasting leadup time (#5 past 50 years, #6 past 100 years),the most complex interlocking responsibilities (all paper currency nations), the most monumentally gigantic in size (total sum value of all existing paper currencies -- in quadrillions or more -- $1,000,000,000,000,000 with 15 zeros), and the most horrificly deadly, widespread, and longlasting tragic consequences, involving all existing paper money currency nations (with US$ at tip of "inverted pyramid"). Inverted pyramid schemes are inherently unstable. Looming crisis is teetering on finely balancing of mutually acknowledged shared interests in propping up house-of-cards ponzi scheme. If the tip is yanked away by malicious design, stupidity, accident, or unintended domino spillover from other crisis sectors, the result is total collapse. It's coming. Credible and responsible economists have been warning for longtime.

[Chopin]

Part1:

This sober NYT analysis of realestate bubble situation is indicative of other bigger, widespread, deeply rooted, more systemic problems facing USA and entire world. At heart, it's an unending series of wrong choices. People didn't take care and chose the wrong kind of leaders. Those leaders didn't have the right temperaments to objectively analyze nature and size of problem, and honesty, personal and professional integrity to debate and implement bold, effective and responsible solutions. After the problem crashes like house of cards, and implodes in their faces, they don't have capacity to understand their mistakes, own up to their culpabilities, and simply brazenly, callously, and cowardly move on, with a smirk and a chuckle and a "so what?" attitude.

Where have we seen those repeated scenarios and performances before? too many to completely enumerate:--

1) 9-11 crash (caused by somebody else -- "terrorists"?, lax FBI?)
2) Katrina (caused by something else -- "nature"?, lax FEMA?)
3) Iraq war and ongoing occupation (caused by Saddam, WMD, "faulty intelligence"? fanatical insurgents? terrorists?)
4) Housing / mortgages / realestate / banking credit "bubbles" (caused by WallStreet greedy excesses? irresponsible Freddi Mac/Fannie Mae?)
5) International system of paper money / fiat currencies --- caused by irresponsible, shortsighted governments? nations? peoples?)
6) Global climate meltdown (caused by whom? what?)

Who is accountably in charge of averting all those disasters?
Ultimately, who is really responsible for coping with those disasters? --- the president? we the people?

[NoMoFearNoMoHate]

If you think irresponsible fiat currency systems are bad you should learn about commodities backed systems!

The US and UK abandoned specie after groups colluded to undermine the British and American war effort in the second World War by leveraging gold and silver.

The fact is that the yearly productivity of humanity has far outstripped all the precious metals that have been mined - ever! While our use and desire of these metals is at an all time low due to the vast inequality of wealth in the world.

[Chopin]

This question of worth of a currency precedes WW2, going far back to prehistoric antiquity. The major and very significant difference between gold / precious metals and fiat paper money is that there's no commonly agreed-on relative value and worth of a paper currency -- except for the relative value of it as defined by the dominant player in the currency world (today it is USA), and it suffers the single most serious intrinsic weakness of all paper currencies in history --- it can potentially have a LIMITLESS supply from the printing presses. No credible person or institution has ever denied that fact.

Therein lies the brewing international paper currencies crisis today, and tomorrow. It can explode in the faces of every nation affected if and when the dominant power (USA) finds itself in an untenable situation of an urgent and irresistible need to manufacture vast supplies of paper dollars to meet its obligations. Despite convoluted reasonings and explanations by proponents of paper currencies who have a vested interest to promote it, most thinking people around the world increasingly sense that day relentlessly approaching.

[wadenelson1]

Regarding that headline, what do Eric Clapton, Ginger Baker, and Steve Winwood have to do with unregulated markets?

[castlerider]

I listened to Stevie Winwood this morning on Hendrix's "Electric Ladyland, where he's jamming with Jimi, Jack Cassady from the Airplane and Mitch Mitchell on "Voodoo Child". One of the most spontaneously beautiful and intense jams in History. Thank God it was recorded.

Who cares about any of what he may have had to do with that- Oh I get it now... The title- Blind Faith.
Very funny.

Being from Texas and seeing what a horrible Gov. he was, and how he acted like a smarmy entitled brat, I told all my family not to vote for Bush, that if he won he would ruin our economy. MY GOD!!
I wouldn't dream I would be so right, and wish to God I hadn't been, now.

[Chopin]

You're right on the money about Dubya's past and present. He was a walking failure and disaster behind a mask of smirks, chuckles "gee whiz, gosh, he he he", bravados "bring it on, kickass, dead or alive, you're with me or against me", and a cravenly "it's not my fault, it's Barney the dog". You're not the only one who knew all along early on, in Texas. The precious, incisive and humorously dead-on diagnosis and prognosis of GWB, the "shrub", the man and the under-achieving leader, from early on in Texas, by the late Molly Ivins should have been read and heeded by people in and out of power. Most of all, his dad, B. Senior, should have done his level best to keep him to keep him from reaching the pinnacle of power to mess up the entire nation and people.

Every lack of diligence and vigilance on the part of individual citizens in a democracy has consequences. The proof is unavoidaly seared into our lives and tragic memories.

[mikekc]

The Eagle's Wing Baby! -Jimi Hendrix from said Voodo Chile

[haval2]

Legacy? Stubborn ignorant piece of garbage. What you did is bad enough but trying to apply revisionist history to it is criminal. But then you are one too. Lock him up.

[Pragmatus]

George Bush has pulled off the near-impossible: he will almost surely be regarded as the worst U. S. president ever, at least until someone truly unimaginably venal (on the scale of Rod Blagojevich) and stupid (ditto) comes along. The singular factor in Bush’s case is that the malfeasance was deliberate.

Bush doesn’t so much have a set political philosophy as he is incapable of saying no to cronies whispering in his ear, none of whom would ever give the world’s true woes even the time of day. We have certainly had our share of bad chief executives, but they’ve always been of the bumbling or featherheaded or pathologically insecure variety, never before the outright villain. Bush’s evildoing was conscious, at least in the sense that he knew he was doing wrong but allowed himself to be persuaded to do it anyway.

But that’s the charm of being born-again, at least as Bush sees it. The Blood of the Lamb washeth all away. Bush will trundle off to a happy retirement, cocooned in wealth and privilege, untroubled by even the sight of the any of the messes he created.
.

[Freedomscap]

Interesting thing to witness: homosexuals are hating on Warren and Obama, at the Warren thread and some right wing nuts, like Reliant and Ringtone, are agreeing with them.

Classic!

[RedPillReaction]

Before you buy into the notion that Obama and The Democrats will distinguish themselves from Bush and The Republicans in meaningful way, consider this football metaphor:

Imagine that our political system is like a football league in which only two teams compete and this two-team football league is the only sport that is televised.

Imagine that the two teams are the Republican and Democrat parties, the players are the politicians, the managers and coaches are the political leaders, the judiciary are the refs calling the plays, the justice department is the security firm at the stadium, news media are the sportscasters shaping opinion, and the behind-the-scenes Owners of both teams and the entire league structure are a consortium of elite international bankers, mega wealthy industrialists, old royalty and their vast network of privately owned corporate subsidiaries, central banks, etc. The sponsors of the league are the lobbyists, subsidiaries and friends of the Owners.

Now imagine that each election, policy debate and legislative initiative is like a new league game, in which the outcome has been predetermined by the Owners. The unaware spectators blindly keep on buying tickets and cheering on their team, game after rigged game. Occasionally a saavy spectator may notice that the ball is purposely fumbled or a ref’s call is dead wrong. But if they voice their objections too loudly, security will be all over them and they’ll find themselves ejected from the stadium and mocked by the well-dressed sportscasters.

[Freedomscap]

OK, I can agree with this assessment. Now, what's the alternative.

[Libarchist]

The American dream; is all about being a good American, a cog in the machine....were all are expected to buy everything-- that the powers that be sell, regardless if it is junk or not.

Bush and Obama are puppets, to entertain the sheeple -- thus powerless.

[RedKnuckles]

So, the republicans would be the Detroit Lions and the Dems would be the Tennessee Titans?

[GPC]

IT'S TIME TO ARREST THESE CRIMINALS THAT HAVE FLEECED AMERICA AND PUT THEM IN FRONT OF A FIRING SQUAD!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[ElPerro]

Seconded

[youknowwhat]

This was a well planned heist, pure and simple, by the Republican party. With some Democrats as accompIices. I refuse to believe that all of the economic eggheads on the Repulican side would think that deregulation and making the rich richer would sustain a viable economy. The great thing for them, and bad for us, about stealing the money is that they'll more than likely get away with it. I heard a profound statement a while back; " The best way to rob a bank is to own it".
The rich steal big money, the poor steal small money.

[Danny Boy]

You are soooo right!

Anyone who doesn't blatantly realize that the President spent the last 8 years stealing money from the middle class and giving it to the rich is nothing short of a fool.

[PS4OBAMA]

McCain....the great proponent of deregulation........add Bush to that....
I think we need to send all the countries that we GAVE MONEY TO, that is time for them to pay their bills and quite putting it on the people of the United States......

[Chopin]

There's a strange kind of paradox at work here. Despite the worldly smartnes of the giant heisters, their perfectly planned and executed heist has some built-in flaw in their logic and reasoning and thinking that eventually bring them down. In the stock market crash of 1929 and subsequent depression, some of the super super- rich industry titans and market shysters lost big time in the crash. There were rich and poor people jumping out of windows.

[Chopin]

This recent weblink example shows the consequences of giant ponzi schemes cast a wide net of victims, rich and poor:

http://www.huffingtonpost.com/2008/12/23/thierry-de-la-villehuchet_n_153147.html

The ends of eras of great excesses in 2008 and 1929 have very similar causes and victims, and probably consequences.

[Freedomscap]

They are over at the Warren thread talking about Obama bad.

[soundfury]

I must admit, after the invocation, President Obama needs to read Warren the riot act for his prejudicial and hateful remarks!

[ErnestineBass]

I still say Obama should have asked Rev. Chris Buice to give the invocation.

Buice is the pastor of the Tennessee Valley Unitarian Universalist Church in Knoxville where several parishoners were "gunned down" last July.

[PS4OBAMA]

Go over to the other site and read the crap these people are whining about. It;s a 1 minute prayer....who cares. You can't find one clergyman, pastor, Priest, Bisop who are against Gays because they folllow the fantasy book called the BIBLE. Glad I'm not religious and have an open mind; and not being brainwashed by the regligous zelots in this world. I'm sure, if there was ever a man named Jesus, that he would be asking those that are complaining to "throw the first stone."

[MacTheBlogger]

This "unregulated markets" notion is silly. There have never been unregulated markets anywhere, ever. The problems are...

... finding and committing to balanced regulation that protects the system & the people without damaging and/or inhibiting the freedom that allows innovation and progress, and...

... creating a regulatory protocol that identifies newer and more exotic products & services such as credit default swaps, mortgage-backed derivatives and hedge funds so that appropriate new regulations can be quickly established for them.

So far, the team Obama has assembled is promising, to say the least. This ain't gonna be easy, and I'm hopeful that we won't see a knee-jerk reaction to over-regulation.

.

[ebanks84]

We are going in a new direction with Obama. We have seen that the OLD WAYS of government have not worked for centuries. All we've done in the past is to elicit more enemies, more dysfunction by our powers that be, and more rights of the people being taken away slowly but surely.

We cannot move ahead with OLD IDEAS. We all must give up the negativity that surrounds us and start believing in the man we chose to lead us. I know it's hard to trust anybody nowadays because of all that we, the people, have been taken through. But we must start somewhere. And Obama seems to be a GOOD PLACE TO START.

Let's give him all our hopes and desires and believe within ourselves that he will take very good care of them. We MUST BELIEVE he will make a difference if we want him to make a difference. It seems to me that he is on the right road because he is surrounding himself with America's BEST individuals to help him do the right things.

The new year is OUT WITH THE OLD and IN WITH THE NEW. Bush is history. Obama is hope!

[Freedomscap]

I hope you are right. Because, and first I must qualify that I'm a big time Obama supporter, I don't like the fact that he appointed Sharpiro to head the SEC -- she is a part of the same crowd that is responsible for this financial mess we are in now.

[castlerider]

I was mad as hell about that too....
However, she IS in a position to do as her boss TELLS HER, and I think she will. What's important,. is that she is well known in the business and can get things done, which will be extremely important when push comes to shove in that very tight business of financial markets and the momentum needed to get across without indecisiveness. If these important things are ignited forcefully, it will make a lot of difference when things need to get done quickly, so it may have been the deciding factor in picking this woman.
Considering this, I think she'll be OK.

[darthdarcy]

When you have corrupt men running your government, then business naturally follows suit..!

[Midnightrain]

"Man is a thinking creature whose actions are guided by his thinking. Proper thinking creates proper actions."

--M. Mumtaz Ali
Islamic scholar

[ErnestineBass]

Yep...and that's why his choice of Geithner gives me indigestion.