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Every Man For Himself, Said The Elephant Among The Chickens
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Alan Greenspan, Andrew Sullivan, Ben Bernanke, Economic Crisis, Subprime Bailout, Wall Street Bailout,
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Andrew Sullivan, squawking the name "Milton Friedman" as if it magically disappeared the ridiculous, sat on Bill Maher's show blaming the financial crisis on American consumers who bought houses they couldn't afford. He was arguing against Naomi Klein's thesis that the crisis belonged squarely at the doorstep of an ideology-obsessed political class and its Wall Street allies.
Secretary of Treasury Henry Paulson made the same argument to George Stephanopulous when pooh-poohing the inclusion of struggling homeowners in his bailout scheme. He said struggling homeowners needed to take responsibility for their obligations.... unlike financial institutions, their executives and CEOs, or the shareholders who gorged on their malfeasance.
Let's take a trip in the way-back machine: On February 23, 2004, a Wall Street Journal article stated of then-Federal Reserve Chairman Alan Greenspan:
The Fed chairman didn't advise households to choose adjustable-rate over fixed-rate mortgages. It is almost unheard of for an official of the U.S. central bank to offer advice on interest rates, over which it has enormous influence. But his remarks did represent a rare discussion of interest-rate options for American households, and he implicitly questioned whether homeowners' preference for fixed-rate mortgages makes financial sense
Meanwhile, a Jim Jubak article posted on MSN Money bore the headline "Why there is no housing bubble." The subhead? "The sky is not falling. Yes, home prices are sky-high, but we really don't have a housing bubble that is anywhere near bursting."
On October 27, 2005, The New York Times quoted Ben Bernanke as stating that a "cooling" of the housing market was the worst we should expect.
In fact, the blog "Economics of Contempt" compiled a list of pundits/experts who were catastrophically wrong on the housing bubble. They include: Alan Reynolds of the Cato Institute; Kevin Hassett of the American Enterprise Institute; Jim Cramer of CNBC's "Mad Money"; Nocolas P. Restinas, director of the Harvard Joint Center for Housing Studies, and 20 more.
So the American home-buying public was told again and again by this administration, its economic minions, TV pundits and very popular right-wing talking heads that they should go out and buy all the house they could because Happy Days Were Here Again and there was no bubble and everything would be just fine.
When the bottom falls out, these same conservatives blame the homebuyers for failing to earn their advanced degrees in economics and understand what a great many with such degrees failed to--that this was not just a bubble, but a shit-filled bubble, a la Dennis the Menace as filmed by John Waters, and it was going to burst in our faces.
Sullivan said that he believed in "personal responsibility." But like most conservatives, he only believes in it for proles. According to the U.S. Census Bureau, the Northeast has the highest percentage of college graduates-- just shy of 31%. An overwhelming majority of Americans have high school educations. Yet, per Sullivan, Bernanke and their conservative class, they're supposed to know that the current administration and its two Fed Chairmen were full of economic crap. They were supposed to know to ignore that Ivy League professor on their TV.
It reminds me of the old depression-era cartoon that showed a gigantic celebratory elephant cavorting in a chicken coop. The caption paraphrased Dickens: "'Every man for himself,' said the elephant as he danced among the chickens."
Another example is the sudden conservative contempt for the idea of "moral hazard," or setting poor examples. According to most sane economists like Paul Krugman, financial institutions are in this mess partly because they refuse to acknowledge the relative valuelessness of their mortgage assets. In short, they're asking too much money for what they've got. What the Bush administration proposes to do is to pay them the exorbitant prices they're asking. It's a gift, pure and simple; but Bush-era conservatives see nothing morally wrong with it. Major financial institutions run financially amok and make billions. Taxpayers bail them out. No moral hazard of poor example here.
They do see something morally wrong with providing every American with health care. They do see something wrong with providing non-violent addicts with treatment instead of jail. They do see something wrong with providing rape victims with a morning after pill. They do see something wrong with providing addicts with clean needles so they don't spread HIV. They do see the moral wrong in giving teens condoms so they don't contract STDs or die of AIDS. All of these, they insist, would set bad moral examples. All would encourage bad behavior. But providing expensively tailored con artists with get-out-of-debt-and-jail free cards after costing the American taxpayers tens if not hundreds of billions of dollars? No problem.
Every man for himself said the elephant as he danced among the chickens. I guess money buys morality in today's America--just like it buys administrations.
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the issues are:
palin is being investigated for abuse of power .
she and her husband have violated court ordered subpoena's
mccain is obstructing justice, by interfering in the investigation.
isn't this illegal? i am 100% certain if barak obama's vp had done the same, he would not be the nominee, would he?
they are not allowing reporters to ask unscripted questions.
they are denying reporters access to her foreign policy improv's.
is the mccain palin ticket above the law?
have they rewritten the rules as we watch?
are they setting in motion the new standard for the press in the mccain /palin regime?
how far will they go?
what is next ?
Nope, twiggy2, no "new standard". Same old, tired standard promulgated by Bush 1 and Bush 2. Secrecy, failure to think and do on-the-fly (unless it's knee-jerk reactionism), and flagrant abuse and ignorance of the rule of law are the hallmarks of the modern Republican hijacking machine.
Glad to see the mention of "Moral Hazard". Let's spell out the absurdity: Moral hazard applies to Main Street, but not to Wall Street? LMAO, if the stakes weren't so high for so many homeowners and taxpayers. And if I knew for sure that the Bushies weren't going to get away with one more humongous fraud.
This is all so transparent!!!! Just another scheme by the rich to steal more from the poor.....I hope the Dems stand up and fight...I will lose all faith in them if they don't.....ARE THE PEOPLE SO NAIVE IN THIS COUNTRY THAT THEY ARE FOOLED COMPLETELY BY THIS GIMMICK???? IS THERE ANY JUSTICE LEFT?
We loved having Arrianna in Santa Fe!!!!
A mortgage broker friend thinks many of her peers were greedy and lied to their clients. Many had no idea what the real terms of their mortgages were. The brokers told the clients a tale, knowing full well most would trust them and either not read or not fully understand all the fine print. The brokers didn't care because they were just thinking short term. They'd get their money and be out of the picture.
Why the banks bought these mortgages? Her opinion, after working for years at banks before going solo as a broker, is that many of times banks were too trusting as well. They tended to assume that everyone looked at the big picture the same way they did. They trusted the brokers and didn't look at the deals as closely as they should've. My friend is convinced through her contacts on both ends that this was a significant part of the problem.
Attesting to the high pressure to buy more house than one could comfortably afford: DH and I bought in 2002. We were constantly pressured to look at more expensive houses. We had plans and goals set in place, and we're both pretty stubborn, but it was still difficult to resist all the pressure. We finally took my income off the table and only used DH's income for the qualifying process. I can easily see how people who aren't as stubborn as we are caved to the pressure.
MY IDEAL OBAMA TV COMMERCIAL:
"John McCain signed onto veto-proof legislation in 1999 that ended the regulation of banks and financial services that had been in place since 1933.
The bill had Phil Gramm's name on it, and he advises John McCain on financial matters for his campaign to be America's next President.
The vote was strictly along party lines, with Republicans pushing through break-through legislation that ended the previous prohibitions on banks selling securities that included millions of risky mortgages they wrapped up as investments for your retirement accounts.
They want these risky investments to be part of your Social Security retirement. Now look what's happened.
Billions and billions of dollars in bailouts, and that's just this week alone.
The Republicans game our financial system- they game your retirement investments- they game public education- the health care system... they game our future for the massive profit of a very few powerful friends.
Sara Palin and John McCain are more of the same Republican game.
America:
Don't be Fooled Again."
-WRITTEN BY ME TO PURSUADE VOTERS TO VOTE OBAMA.... OR STAY HOME.
Look on the bright side. Every RE shark who bounced a single woman or near-retirement worker out of employment to acquire cheap property to flip is stuck with major losses. Many of us who lived through that scenario are quietly chuckling at Rico Suave facing the specter of losing it all the way we did.
The glaring fact is that we never would have had a subprime mortgage mess without massive fraud by the mortgage industry.
An industry investigation found that 50% of all borrowers lied about their incomes on mortgage applications, yet a borrowers income is the simplest task for a mortgage lender to verify. Do we have to wonder how this "fundamental" tenet of lending got overlooked?
It also begs the other question; Are all Americans so brazen that they would automatically lie on a mortgage application? Of course not, unless they were led by the nose to do so by a mortgage company representative. "No problem, you qualify, just sign here".
But the fraud doesn't end with the Mortgage Industry, from there the fraud went right up the line to our most "staid" and "prestigious" financial institutions as mortgage backed loans were traded as investments. Those institutions are the ones we all depended on to do what was right. Then again, we had no choice but to trust them because these same institutions had already been confidentally deregulated by the Kool Aid drinkers in the Bush Administration.
LIke a wealthy father who hands his kid a platinum credit card but provides no spending limits, rules or discipline, this administration has not minded its house. When the kid winds up drunk with power, gets behind the wheel of a car and crashes into some guys house. The father decides to fix the car, give the kid another line of credit but tell the poor guy in the broken house to fend for himself. Typical GOP reaction.
Saddle me-the-taxpayer with the cost of continuing these officially-failing companies in business: fine.
But: give me title to shares in the companies I help. I could use the yearly dividend check, since I'm to be on the hook for the bailout.
Alaskans get a yearly PFD check, thanks to wise investment by our government on behalf of the citizen. The money comes from interest on investments. So I say bring the bailout cash-cow citizen into this little socialist party Wall Street's got going, and set up a US-PFD department to manage our individual dividend payouts. And since the payout would be intimately connected to taxes paid, the US-PFD wouldn't even have to cut their own checks; they could just wire the money and statements to the IRS, and that agency could use it to adjust tax payments/refunds.
Suddenly, most of us would get a refund, accompanied by a web-link to a financial statements page that breaks down just what dividend income we're receiving.
Think about it: This is the ownership society in spades. Not what the boosters of that sound-bit planned, true. They want us all floating around the finance-sphere in individually-managed "gas particles" -- not acting in unison.
But we NEED to get something for our money, or I say LET 'EM FAIL!
Gaiter hit the nail on the head... well written!
In addition, many of my peers have not one clue how this crisis occurred and it's easier and more expedient to point the finger at the over-extended consumer. It smacks of "ignorance is bliss" and the hopeful assumption that something this catastrophic could never happen to them.
How many times did we hear Georgie in an almost patronizing manner, lecture us on the stability of our economy? I could puke.
I guess I'm lucky. I've held my own. I started out with nothing, and I still have it!!
LOL, nothing is the one thing that they can't take from you.
Yes, once again, the American Taxpayer will foot the bill for the excesses of Wall Street and the incompetence of Washington. The Treasury Dept. is firing up the printing presses to generate the 100's of billions needed to stave off an another financial collapse. We, the American people, will be rewarded with increased inflation, and at some point, higher taxes to pay for this debacle. The standard of living of our children and grandchildren has just taken a mortal blow. History, once again repeats itself.
Thus, the USD weill ferther devalue on the world's money market.
no matter how you slice it, more for the Platinum club means someone is getting less. lipsticked or perfumed, a pig is a pig and the horse on the Animal farm is drawing flies
There is no way to recover all the money taken out of the system by the traders and executives - it has already built their mansions and has been put in offshore accounts.
The only practical solution is a surtax on ultra high incomes. I.e. redistribution to counteract extreme income inequality.
You are absolutely right. I saw pictures of the Hampton homes, NY condos, etc of all the Lehman Brothers CEO's etc....on CNN.
A friend of mine used to always say, "It is expensive to be poor."
Example: If you have over $1,000 in savings, you get free checking and bounced check coverage. If you are rich, chances are you wont' bounce a check, so your credit rating is higher, and therefore you get the lowest interest rates, etc..
WOW! I could not have articluated the problem better! Great blog!!!! you have new fan
It's like they sold us a time bomb and told us it was a fancy new alarm clock, and now that their time bombs have blown the entire market to smithereens, they want to look at us and say "Well, it's all your fault for buying the fancy new alarm clock. You should have known it was a time bomb!"
My husbad and i can't help but notice. We bought a little house with a mortgage we could afford ten years ago. We tore up every second mortgage offer that came in blizzads in the mail even though the temptation of toys and vacations was strong. We have one car for enviromental reasons and live on a bus line. My husband was laid off last week and is five years out from retirement. We have a cushion of six months from our savings account, but no health insurence after the end of this month? Then what? Our ideal was to "live simply so others may simply live". As Hunter Thompson once asked Nixon, "What about the doomed?" What about we who are not in D.C. today? Who will speak for us?
Obama. And who are your state senators and reps?
Speak up for yourself. Write letters to the editors. Living simply is a wonderful example for others. Unfortunately, it has not been an example followed by many in our country--on Wall Street and Main Street. Too many people have bought into the consumer society--on borrowed money. Too many people have looked at bigger profits as necessarily better--without looking at whether the underlying purchase was worth it. With six months worth of savings--despite no health insurance--you are not doomed! Check into the cost of COBRA (if applicable), if you are so terrified at being without health insurance in the interim. Make friends with a doctor (half-kidding). What would you have done if you were living one or two hundred years ago? Keep your perspective. And get involved in trying to have your voice heard.
Thank you. Actually we are more angry than helpless. I always write to everybody at the state level and in D.C. at least once a week. I am a political gadfly. We are very healthy, it's just that if we break a leg, we are on the street. There's small comfort in knowing there are lots of people just like you in the life boat as the Titanic goes down.
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