McCain defends his support of de-regulating finance indstry

Looks like the Republican nominee thread is dead, and Sarah Palin is nothing but a bad-Disney-movie-come-to-life-esque DISTRACTION; hence this independent thread.

[quote]John McCain defended his support of deregulating the financial industry. He was asked about his views last night on 60 Minutes.

Scott Pelley: “In 1999, you were one of the senators who helped pass deregulation of Wall Street. Do you regret that now?”

Sen. McCain: “No. I think the deregulation was probably helpful to the growth of our economy.”[/quote]

democracynow.org/2008/9/22/headlines#4

Holy Mother of Christ! Meanwhile Congress Asked to Approve $700 Billion Wall Street Bailout

[quote]The Treasury Department has formally asked Congress to approve a $700 billion bailout of the financial industry and to create a government fund to buy illiquid assets from the nation’s banks. The Bush administration proposal could be the largest government bailout of private industry in the nation’s history. Some analysts say the final cost to taxpayers could top one trillion dollars. Over the weekend, the size of the proposed bailout grew as the Bush administration said foreign banks, including Barclays and UBS, should be eligible for the bailout. The Financial Times reports some industry groups are lobbying for the fund to grow even larger by including a clause that would allow banks to account for any losses realized over a number of years.

President Bush: “Our system of free enterprise rests on the conviction that the federal government should interfere in the marketplace only when necessary. Given the precarious state of today’s financial markets and their vital importance to the daily lives of the American people, government intervention is not only warranted, it is essential.”

The Democratic leadership in Congress appears to back the bailout but are pushing to include provisions to protect homeowners, place constraints on excessive executive compensation, and to provide independent oversight of the fund. Under the Bush administration’s proposal, there would be no restrictions on the administration other than requiring semiannual reports to Congress. This would grant the Treasury secretary unprecedented power to buy and resell mortgage debt. Treasury Secretary Henry Paulson is opposing plans to help homeowners facing foreclosure as part of the bailout. Paulson said Congress should approve a so-called clean bill.

Henry Paulson: “The ultimate taxpayer protection will be the stability this troubled asset relief program provides to our financial system, even as it will involve a significant investment of taxpayer dollars. I am convinced that this bold approach will cost American families far less than the alternative—a continuing series of financial institution failures and frozen credit markets unable to fund economic expansion.”[/quote]

US tax-payers are asked - no FORCED, since the majority of US voters do not actually support the bailout - to pay off the gambling debts of a bunch of mega-rich speculators who F-ING KNEW they were buying and selling bad loans. Meanwhile, this dick-head is saying de-regulation was “good for the economy”?!?

Privatizing the profits and socializing the losses: classic Repube policy. Anything that benefits the rich at the expense of the people.

More regulation of big business would have prevented crises like this.

Meanwhile, in Wisconsin, McCain accused Obama of exploiting the financial crisis for political gain.

democracynow.org/2008/9/19/headlines

Yeah, RIGHT. Like YOU haven’t been “part of the problem” for the past how many decades, Senator? And gee what a surprise that suddenly you’d want to cry “partisan politics” when anyone wants to discuss how the economic policies you’ve supported AND CONTINUE TO SUPPORT have led to this unprecedented financial disaster!

Unfortunately the Mediocrity First crowd will hear none of this. They’re having Palin/McBush and the facts be damned. Can’t wait to hear them blame the subsequent mess on “Liberals” yet again four years down the road.

Big shock, a bunch of leftist Republican haters living overseas. Why can’t you guys just let people live their lives. Markets go up and down, that’s how it works. In good times, people give loans that will fail, then when crunch time comes, some businesses fail, and banks lose money. But when the dust settles and the economy is ready to boom again, the bad businesses are gone and the good ones are ready to roar. That’s how you grow an economy, get more jobs to working people, and raise a society’s living standard. See, here’s the difference between people on the right, like me, and people on the left, like you. I can admit that deregulation of financial markets leades to more drastic ups and downs. Right now we are in one of those downs and people are hurting. However, you will NEVER admit the hand the Federal Government played in this by coercing banks into making ridiculous loans to people that never should have received that money. By giving tax breaks to banks that make loans to people based on where they live and the color of their skin, not on their ability to actually pay it back, this is what happenes. Unlike many of you, I was living back home when these loans were being made. I had friends fresh out of high school getting $250,000 home loans. Most were horrible banking decisions. But many were pushed by HUD because it was important to the Feds to get minorities owning homes, and to get people buying homes in run down areas, whether they can actually pay the loans wasn’t important. Of course, the Feds also wanted to stimulate the economy through the construction industry, and therefore pumped billions of virtually free money to banks to give to people to buy houses. Anyone with a brain knew this was coming.

So anyway, let’s have an honest discussion. I know that’s a big favor to ask of a leftist, but let’s make that effort.

And taxpayers fork out $700 billion to bail them out of the mess they made because they’re “too big to to be allowed to fail”

Right- and as a good free-enterpriser, you should be totally opposed to a public hand-out for a bunch of who ran their businesses, to quote the late great Hunter Thompson “like a bunch of junkies building a rocket to the Moon to check out a rumor that the craters were filled with smack.”

Umm, that’s because it’s not true.

Standard right-wing operating procedure: whatever the problem, it’s all the fault of those shiftless colored folks:

[quote]But CRA has always had critics, and they now suggest that the law went too far in encouraging banks to lend in struggling communities. Rhetoric aside, the argument turns on a simple question: In the current mortgage meltdown, did lenders approve bad loans to comply with CRA, or to make money?

The evidence strongly suggests the latter. First, consider timing. CRA was enacted in 1977. The sub-prime lending at the heart of the current crisis exploded a full quarter century later. In the mid-1990s, new CRA regulations and a wave of mergers led to a flurry of CRA activity, but, as noted by the New America Foundation’s Ellen Seidman (and by Harvard’s Joint Center), that activity “largely came to an end by 2001.” In late 2004, the Bush administration announced plans to sharply weaken CRA regulations, pulling small and mid-sized banks out from under the law’s toughest standards. Yet sub-prime lending continued, and even intensified – at the very time when activity under CRA had slowed and the law had weakened.

Second, it is hard to blame CRA for the mortgage meltdown when CRA doesn’t even apply to most of the loans that are behind it. As the University of Michigan’s Michael Barr points out, half of sub-prime loans came from those mortgage companies beyond the reach of CRA. A further 25 to 30 percent came from bank subsidiaries and affiliates, which come under CRA to varying degrees but not as fully as banks themselves. (With affiliates, banks can choose whether to count the loans.) Perhaps one in four sub-prime loans were made by the institutions fully governed by CRA.

Most important, the lenders subject to CRA have engaged in less, not more, of the most dangerous lending. Janet Yellen, president of the San Francisco Federal Reserve, offers the killer statistic: Independent mortgage companies, which are not covered by CRA, made high-priced loans at more than twice the rate of the banks and thrifts. With this in mind, Yellen specifically rejects the "tendency to conflate the current problems in the sub-prime market with CRA-motivated lending.CRA, Yellen says, “has increased the volume of responsible lending to low- and moderate-income households.”

Yellen is hardly alone in concluding that the real problems came from the institutions beyond the reach of CRA. One of the only regulators who long ago saw the current crisis coming was the late Ned Gramlich, a former Fed governor. While Alan Greenspan was cheering the sub-prime boom, Gramlich warned of its risks and unsuccessfully pushed for greater supervision of bank affiliates. But Gramlich praised CRA, saying last year, “banks have made many low- and moderate-income mortgages to fulfill their CRA obligations, they have found default rates pleasantly low, and they generally charge low mortgages rates. Thirty years later, CRA has become very good business.”

It’s telling that, amid all the recent recriminations, even lenders have not fingered CRA. That’s because CRA didn’t bring about the reckless lending at the heart of the crisis. Just as sub-prime lending was exploding, CRA was losing force and relevance. And the worst offenders, the independent mortgage companies, were never subject to CRA – or any federal regulator. Law didn’t make them lend. The profit motive did.

And that is not political correctness. It is correctness.[/quote]

prospect.org/cs/articles?art … ime_crisis

Sure. As soon as you find out what you’re talking about, let’s.

And of course by “the Feds” you actually mean the Bush Administration.

Kudos on what you’ve just said, MikeN. However, in all fairness I must point out that the Clinton administration was as much on the de-regulation bandwagon that started under Reagan as were the pre-ceding and pro-ceding Bush administrations.

Moreover, it turns out that the Bush Administration had actually recommended to Congress a new agency to oversee Freddie Mac and Fannie Mae back in 2003. According to the NY Times article:

[quote]The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac – which together have issued more than $1.5 trillion in outstanding debt – is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates. [/quote]

Lord, I can’t believe I’m saying this, of all people, but I think truth is truth. For once, that shithead was right! What’s worse, Democrats were against it because

[quote]…tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

‘‘These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis,’’ said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ‘‘The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.’’

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

‘‘I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,’’ Mr. Watt said. [/quote]

New Agency Proposed to Oversee Freddie Mac and Fannie Mae

Now of course we all know the Democrats did not control Congress at this time - in fact, the Republicans were pretty much bending them over the benches and giving it to them on a daily basis. Moreover, there were clearly a lot more factors at work than just well-intentioned loans to irresponsible borrowers. Still, it’s fair to say that aside from the financial institutions themselves, there’s plenty of blame to go around for this disaster.

Obama’s getting a jump in the polls now because people realize that it was the GOPpers who were in bed with the bankers.

You guys [i]really[/i] need to get your facts straight on who was “in bed” with the ‘bankers.’
They were all Democrat.
Look at who Obama has working for him and you’ll see some very familiar names on this scandal.

[quote=“TainanCowboy”]You guys [i]really[/i] need to get your facts straight on who was “in bed” with the ‘bankers.’
They were all Democrat.
Look at who Obama has working for him and you’ll see some very familiar names on this scandal.[/quote]

What complete horsehockey. Look at the donor records of the key figures of the scandal, and you can see they had their tongues up the buttcracks of the GOP. What? You think the Republican mantra of cutting taxes to the richest .01% of Americans somehow doesn’t go straight to the heads of investment bankers who make year-end bonuses of more than USD 10 million? That somehow these pitches to the economic interests of guys making more than $100,000,000 a year somehow go unheeded? :hand:

Let me help you with words and pictures:

The Democrats and Obama caused the financial crisis of 08 by supporting Fannie Mae and Freddie Mac and covering up their bad books.

Enjoy.

You might like this one also…

Explosive Video, Fannie Mae CEO calling Obama and the Dems the “Family” and “Conscience” of Fannie Mae

Oh yeah…

Didn’t I call it? In one breath they say Obama caused the financial crisis, and then in the next they will say he hasn’t accomplished anything.

[quote]You guys really need to get your facts straight on who was “in bed” with the ‘bankers.’
They were all Democrat.
Look at who Obama has working for him and you’ll see some very familiar names on this scandal.[/quote]

Oh yeah, like Phil Gramm, you mean? He’s real popular around the Obama camp.

[quote]Let me help you with words and pictures:

The Democrats and Obama caused the financial crisis of 08 by supporting Fannie Mae and Freddie Mac and covering up their bad books.

Enjoy.[/quote]

Yeah, that’s basically the same story I posted, except with video. And the crisis goes far beyond Fannie Mae and Freddie Mac.

If one actually watches the two (2) videos posted one will be armed with actual information.

Not rumors and BS.

Two words: “Keating Five”.

Err, and my NYT article wasn’t “actual information”? It’s essentially the same story. It’s also a FACT that the crisis goes way beyond Freddie and Fanny. It is also a FACT that Phil Gramm was deeply involved in the under-pinnings of this mess, and he is now McBush2.0’s chief advisor, not to mention his proto-pick for secretary of the treasury.

The fact is, these F***ERS were and are practically all in bed with Wall Street. The whole de-regulation train has de-railed, and the main point is that we need to knock that shit off.

This mess can be traced to two (2) significant events. The first of which occured in 1977. It was called the ‘Community Reinvestment Act’ - CRA. It opened the doors to scams, shakedown artists with a political bent and professional ‘community organizers’ who learned how to mau-mau the ‘man’ (banks). I watched this happen a few years later on the East Side of Columbus Ohio.

Good Intentions Paved The Road To Subprime-Stoked Meltdown

The 2nd significant, and some might most important one, occurred in 1999 when the Clinton* admin deregulated banks and allowed them to enter into previously restricted areas. I’ve posted on this previously. This also loosened the requirements, removed most actually, that banks could make upon applicants when they were applying for mortgage loans/refinancing. I had a neighbor who was a chief loan officer at a local bank who sat on my patio and predicted exactly what would happen when that ruling came into effect. She predicted a financial melt-down. But the banks had to, under Federal Law, write the loans. She was right.
I’ll try to find some info on the 1999 ruling and post it later.

Yup yup yup it was that Clinton fellow. He done it. Republicans are innocent. They were forced into it.

[quote]This mess can be traced to two (2) significant events. The first of which occured in 1977. It was called the ‘Community Reinvestment Act’ - CRA. It opened the doors to scams, shakedown artists with a political bent and professional ‘community organizers’ who learned how to mau-mau the ‘man’ (banks). I watched this happen a few years later on the East Side of Columbus Ohio.

Good Intentions Paved The Road To Subprime-Stoked Meltdown

The 2nd significant, and some might most important one, occurred in 1999 when the Clinton* admin deregulated banks and allowed them to enter into previously restricted areas. I’ve posted on this previously. This also loosened the requirements, removed most actually, that banks could make upon applicants when they were applying for mortgage loans/refinancing. I had a neighbor who was a chief loan officer at a local bank who sat on my patio and predicted exactly what would happen when that ruling came into effect. She predicted a financial melt-down. But the banks had to, under Federal Law, write the loans. She was right.
I’ll try to find some info on the 1999 ruling and post it later.[/quote]

The Clinton-era deregulation was the end result of a head-long de-regulation rush that began during the Reagan era and has continued for the past three decades. Republicans have been fervent supporters of financial/banking de-regulation, so it’s pointless to point the finger solely at Clinton for this.

As far as the CRA, MikeN’s post spoke to this quite directly so I think you’d better backtrack.

I’ve already provided information regarding Phil Gramm’s “contribution” to the whole sub-prime melt-down in the GOP candidate thread; however, I’ll be happy to dig it (and more) up if you require.

And as I’ve already pointed out, the Democrats were flat-out wrong with regard to Bush’s recommendation regarding the oversight of Fanny and Freddie (or is it Fannie and Freddy?) Unlike some folks on this forum, I’m willing to cede points upon receiving new evidence.

However, I should also note - as I’ve brought up in another thread - that Republicans running around begging that the bail-out to these speculators be given no-strings-attached is straight-up BS. On behalf of America, I ask the courtesy of a reach-around when being rear-ended like this.

[quote] Consequently, banks in every community in America have been forced to hold a portfolio of bad loans, euphemistically referred to as “subprime” loans. In order to compensate themselves for the added risk of extending these loans, many lenders have increased the lending fees associated with mortgage loans. This is simply an indirect way of doing what banks always do – and what they must do to remain solvent: charging effectively higher rates of interest on riskier loans.

But this is discriminatory!, complained the “community organizations.” Thus, if one browses the ACORN web site, one can read of their boasts of having “predatory lending laws” passed in numerous states which outlaw such fees, prohibiting banks from protecting themselves from the added risk involved in making forced loans to “subprime” borrowers. [/quote]

lewrockwell.com/dilorenzo/dilorenzo125.html

Look at that I can find an intelligent academic who agrees with me too, expect mine isn’t some no name left wing apparatchik but a real live economist.

[quote]Standard right-wing operating procedure: whatever the problem, it’s all the fault of those shiftless colored folks:
[/quote]

Standard left-wing operating procedure. Create a race issue where none existed, in order to discredit someone who points out truths they don’t want to hear.

Did HUD coerce banks to give loans to people, of all races, living in areas that were deemed worthy of reinvestment? Ah, yes. Did HUD coerce banks into giving loans to minorities, simply based on their skin color, while members of other races were denied this preferential treatment? Ah yes.

Ah, he posted a few lengthy quotes from one article. Now I’m posting lengthy quotes from another article. There are a lot of very intelligent people who disagree about what caused this mess. I think it was alot of things but basically coercion by the feds for banks to make bad loans, and willingness of banks to make bad loans that weren’t pushed upon them by the feds. The difference is that I can admit that.

It’s just like I said in my first post, all you expat leftists only blame Republicans. If you’ll look in my posts I never once mentioned a single political party. That’s because it was both parties that pushed this. So get off your “Republicans are Fascists, Democrats are Angels” high horse and acknowledge the facts. At least Vay was able to look past his apparent Bush hatred to acknowledge that both parties are responsible in part for this mess.