Once again the media missed the opportunity to provide news to the people. Instead they align themselves with the Democrats and keep the facts of the housing crisis deeply buried. Should we consider doing away with the freedom of press?
Another example was on Channel 4 (WDIV) in Detroit last night. The eleven p.m. news was covering the "fiscal cliff", the news reader (and the accompanying information that was flashed on the screen) described the Democratic desire to increase taxes on the "rich" and that Republicans did not want to do that. They completely left out the fact that the Republicans wanted spending cuts to go along with any increase in taxes which is not at all included int he Democratic position.
Some would say that is a small omission to which we say bull hockey! WDIV purposely misled the positions of both parties, painted a misleading image of both and presented a totally biased view of the actual conflict between the two parties. Additionally, based on the time allotted, the Democratic position on the story was 90% and the Republican part was the balance. Since when is that balanced news? It does not even come near!
Who else is coming to the belief that the news media must be held accountable? Should we have monitors that pull a story or news cast that is not balanced? Should we not do business with companies that advertise on/in this biased media? We would like to hear from you.
Conservative Tom
New study confirms economy was destroyed by relentless policies of Democratic Party
Another example was on Channel 4 (WDIV) in Detroit last night. The eleven p.m. news was covering the "fiscal cliff", the news reader (and the accompanying information that was flashed on the screen) described the Democratic desire to increase taxes on the "rich" and that Republicans did not want to do that. They completely left out the fact that the Republicans wanted spending cuts to go along with any increase in taxes which is not at all included int he Democratic position.
Some would say that is a small omission to which we say bull hockey! WDIV purposely misled the positions of both parties, painted a misleading image of both and presented a totally biased view of the actual conflict between the two parties. Additionally, based on the time allotted, the Democratic position on the story was 90% and the Republican part was the balance. Since when is that balanced news? It does not even come near!
Who else is coming to the belief that the news media must be held accountable? Should we have monitors that pull a story or news cast that is not balanced? Should we not do business with companies that advertise on/in this biased media? We would like to hear from you.
Conservative Tom
New study confirms economy was destroyed by relentless policies of Democratic Party
http://israel-commentary.org/?p=5513
ECONOMY
DECEMBER 21, 2012
BY: ROBERT MOONS
DECEMBER 21, 2012
BY: ROBERT MOONS
A new study from the widely respected National Bureau of Economic Research released this week has confirmed beyond question that the left’s race-baiting attacks on the housing market (the Community Reinvestment Act–enacted under Carter, made shockingly more aggressive under Clinton) is directly responsible for imploding the housing market and destroying the economy.
The study painstakingly sorted through failed home loans that caused the housing market collapse and identified an overwhelming connection between them and CRA mortgages.
(And is the main reason Barney Frank and Chris Dodd conveniently disappeared from the political scene. How about a genuine in-depth, independent prosecutor review to put these crooks in jail – hardly adequate punishment for the immense trouble they have caused us and in which Obama relishes and his father’s dreams are fulfilled) jsk
Let’s review:
-President Bush went to Congress repeatedly for years warning them that Fannie Mae and Freddie Mac were going to destroy the economy (17 times in 2008 alone). Democrats continuously ignored him, shut down his proposals along party lines and continued raiding the institutions for campaign contributions on their way down.
-John McCain also co-sponsored urgently critical reforms that would have prevented the housing market collapse, but Democrats shut that down as well, along party lines, and even openly ridiculed anyone who suggested reforms were necessary…to protect their taxpayer-funded campaign contributions as the economy raced uncontrollably toward the cliff.
-No one was making bad loans to unqualified people until Democrats came along and threatened to drag banks into court and have them fined and branded as racists if they didn’t go along with the left’s Affirmative Action lending policies…all while federally insuring their losses. Even the New York Times warned in the late 1990s that Democrats continuing to force banks into lowering their standards would lead to this exact catastrophe.
-Obama himself is even on the record personally helping sue one lender (Citibank) into lowering its lending standards to include people from extremely poor and unstable areas, which even one of the left’s favorite blatantly partisan “fact-checkers,” Snopes, admits (while pretending to ‘set the record straight’).
-Even The New York Times admitted that there is “little evidence” of any connection between the “Republican” deregulation measures Obama blames, like the Gramm-Bleach-Liley Act (signed into law by a Democrat), and the collapse of the housing market.
But now the media have spent years deliberately and relentlessly inoculating people against the facts, training them to mindlessly blame Bush for being in charge when Democrat policies destroyed the economy. So here we sit, to this day, still watching Obama excuse and shrug off endless economic failures, illegal government takeovers and utter national bankruptcy with zero accountability.
Fact-checking…
ReplyDeleteOkay, I wanted to make sure I give you a citation to a conservative media outlet. I assume you will accept the NATIONAL REVIEW as a conservative media outlet. Right?
So, here is their article about Obama's latest counter-offer to Boehner. The article is entitled, "Obama’s Counteroffer: $1.2 Trillion in Revenue, $1.22 Trillion in Spending Cuts"...
http://www.nationalreview.com/corner/335881/obamas-counteroffer-12-trillion-revenue-122-trillion-spending-cuts-patrick-brennan#
Note that Boehner's spokesperson says the Obama proposal has only $930 billion in spending cuts, because Republicans don't count interest savings on the debt as spending reduction. I don't know why, but that's another subject…
"Correctly, Boehner spokesman Brendan Buck told Bloomberg this evening that the plan actually includes $930 billion in spending cuts, not the $1.22 trillion the administration claims. The difference between the $930 billion and the president’s $1.22 trillion calculation is $290 billion worth of interest payments…."
--David
"In fact, since the static assumption is that lower spending and tax increases will affect the deficit in equal ways, much of the $290 billion in interest saved comes from the fact that higher taxes mean we don’t have to go into even more debt (in fact, the majority of the interest-spending reductions would result from higher taxes, not lower spending). That’s pretty clever: By raising taxes, the president would like to take credit for cutting spending."
ReplyDeleteWe do NOT have an income problem, we have a spending problem. I know you have heard that. Neither plan will solve the issue. If we avoid the cliff, we will face financial issues at least every year from now until bankruptcy.
ReplyDeleteIf we get a deal for December 31, we have the debt extension in February or March.
As far as counting the interest NOT paid as a spending reduction, that makes no sense to average Americans. We need real spending cuts not accounting gimmicks.
Interest expense is spending, isn't it? If you take out a loan to buy a car, you are paying interest on the loan as well as for the price of the car itself. Now, suppose you had to keep borrowing money from the bank each month in order to make your monthly payments. That is what the federal government does every month. So, if your boss gave you a nice raise (tax revenue in case of the government), you would not have to borrow as much each month to make your payment. Ergo, you are spending less. Isn't that a spending cut brought about by a revenue increase? As I see it, interest payments are just one more category of spending that can be cut in various ways.
ReplyDeleteThis, in any case, this is a subordinate issue. What I wanted you to notice was that NATIONAL REVIEW outlines $1.2 trillion in SPENDING cuts proposed by Obama.
Fact-checking the study you referenced…
ReplyDelete"There’s already some smart commentary on the paper from Mike Konczal. I would add this. There are two separate issues with the CRA. The first is whether CRA caused the bubble, and the second is whether CRA is a good idea generally. My take from ABBS is that the answer to the first question is clearly no–indeed, it seems to provide further evidence of the key role of private-label securitization–while the second question is unanswered.
Assuming ABBS’s analysis is correct, the paper shows pretty clearly that the CRA did not play a significant role in fomenting the housing bubble. While the CRA may have lead to more risky lending, what is most striking about the paper’s findings are how small in magnitude the CRA’s effects are. While ABBS find statistically significant impacts, the magnitudes are really small: 5% more lending in the six quarters surrounding a CRA exam and 15% higher default rate. That’s not a 15% default rate. That means a 1.15% default rate instead of a 1% default rate or a 6.9% default rate instead of a 6% default rate. This sort of change is a drop in the bucket relative to what happened during the housing bubble."
Keep your eye on the derivatives, Tom. The myth that CRA caused the recession is just a diversion invented by Wall Street apologists to confuse the issue about who caused the global collapse of credit markets.
--David (OWS)
The issue that you are missing is that we would have NOT had the derivatives had we not had the CRA.
ReplyDeleteAs far as spending goes, interest expense in your car example is correct as far as it goes, however,if you are buying a car that you do not need, you can't say I saved $X because I did not buy the car.
ReplyDeleteWe need to stop the spending. Stop all spending on green initiatives. Stop duplicated programs like 7 different government programs for health. Stop programs for investigating the mating habits of flies or money appropriated for tunnels for turtles. Stop the insanity.
We had mortgaged-backed securities long before the CRA, so your suggestion that we would not have MBS without CRA is disproven by the simple fact that MBS predated CRA!
ReplyDeleteIt was the total deregulation of derivatives in 2000 by Clinton and Phil Gramm that opened the barn door for Wall Street to do their derivative scams. The vast majority of subprime loans that fueled their derivatives monster was done by non-CRA lenders, and, what's more, these non-CRA subprime loans had a much HIGHER default rate than loans regulated under CRA. This has been noted by every independent analysis.
All you have to do is look at a graph showing the explosion of hundreds of trillions of dollars in derivatives after 2000 to see what caused the worldwide financial disaster -- if you WANT to see it.
--David (OWS)
Starting about in 2005, Wall Street started bundling mortgages together into investment bundles. The initial offerings were greeted with great success, and soon everybody wanted to get in this new "product." So great was the demand for Mortgage-backed Securities (MBS, also called Collateralized Debt Obligations) that Wall Street started running out of mortgages to front-load the system! This led to the creation of the "sub-prime" mortgage; granting mortgages to people who normally would not qualify. Congress, themselves invested in the Wall Street firms that were profiting from selling MBS, passed an $8000 first-time homebuyer tax credit (actually a loan repaid in future taxes) to lure more buyers in which helped front-load the process even faster. This sudden surge in new homebuyers increased demand and home prices skyrocketed! This made investors and homebuyers even more confident, demand for homes and MBS soared even higher and a genuine bubble was being formed.
ReplyDeleteThe link for the above is: http://whatreallyhappened.com/WRHARTICLES/MBS4dummies.php
ReplyDeleteAnother article about mortgage backed securities.
ReplyDeletehttp://topics.nytimes.com/top/reference/timestopics/subjects/m/mortgage-backed-securities/index.html
This guy's article is absolutely correct. He puts the focus where it belongs -- on the derivatives, not the CRA. Outfits like Countrywide were typical…
ReplyDeletehttp://www.motherjones.com/mojo/2011/09/countrywide-subprime-mortgage-whistleblower
They did not care that they were loaning money to homebuyers they KNEW could never repay the loans, because they were unloading them as fast as they could to the Wall Street banks. And the Wall Street banks didn't care, either, because they were bundling these crap mortgages into MBS to sell immediately to their securities customers. And everyone was protected by their CDS from AIG.
No doubt, the Federal Reserve and Congress did things to add fuel to the fire, but the lead players in this saga were the Wall Street banks and the non-CRA lenders like Countrywide who were fraudulently cranking out subprime mortgages and CDO's as fast as their greedy little hands could manage. It was a criminal enterprise of unprecedented proportions.
--David (OWS)
If I may borrow your phrase, read this article and be scared, very scared. This is the face of our real enemy....
ReplyDeletehttp://www.washingtonsblog.com/2012/05/top-derivatives-expert-finally-gives-a-credible-estimate-of-the-size-of-the-global-derivatives-market.html
--David
You wrote...
ReplyDelete"Stop programs for investigating the mating habits of flies or money appropriated for tunnels for turtles. Stop the insanity."
Okay, we agree on that. But these are trivial budget cuts in the context of the big picture. The two biggest are military and health care. That is where we don't agree. I want BIG cuts in military. I also want to cut health care costs by getting universal health care (like the rest of the civilized world where their per capital health care costs are half of ours and produce better health outcomes for their populations).
You also like to say we just have a spending problem, not a revenue problem. What we have is a DEFICIT problem, which, by definition, means a gap between revenue and spending. The solution, mathematically speaking, it to close the gap. Both revenue and spending are way off historical standards (each by around 3-4%). To get back there, we simply need to raise revenue by 3% and cut spending by 3%.
The problem is that Tea Party Republicans are far more interested in preserving the Bush tax cuts (indeed, adding even more deficit-increasing tax cuts) than they are about deficit reduction. Paul Ryan's budget doesn't lead to a balanced budget until nearly 2040, and even that is giving him his dynamic scoring B.S. That is why they would not even accept Boehner's Plan B to increase the marginal rate by 3% on those earning over $1 million per year (this group is the top tenth of the top 1%!).
I believe I am more fiscally conservative on the deficit than you, because I would rather have the BCA go into effect January 1 than some small deal to prevent it.
--David
Your argument on health care is fallacious. Government does not pay for any of my health insurance OR FOR MOST AMERICANS! It is those who do not have insurance for which we end up paying by having to reimburse the hospitals for un-reimbursed care. Government does not cover these costs.
ReplyDeleteMedicare is supposedly self funding, so that is not part of the problem.
So tell me what you are talking about health costs.
BTW Greece, Spain, Portugal, Ireland all have health insurance for all and you see what their problems are! Universal health care is one of the drivers of the failure of western civilization. If you want the US to die sooner, universal health care is a great promoter.
If we can find all the dumb funding, what else is there--my guess is lots!
ReplyDeleteDerivatives were around for years, however, when in 1999 (Clinton Administration) ended the Glass-Stegal law, it allowed banks and insurance companies combine. The law had worked well until that point. Combine this with the Community Reinvestment Act which the government was forcing banks to make more "less than normal loans."
ReplyDeleteBanks then combined these multiple bad loans into packages and sold them as good products, which turned out to be bad.
conservative tom
I will use Switzerland as one of many examples of countries that provide universal, quality health care at a fraction of the cost per capita as the U.S. Oh, and on your point, the government in Switzerland (2000) paid for only 25.4% of health care compared to 44.5% in the U.S. How do they do that? Answer: By cracking down on private health insurance companies to hold down escalating costs. Obamacare plans to do that also, but probably not quite as effectively as the Swiss….
ReplyDelete"The U.S. can learn from Switzerland
Switzerland’s universal-coverage health care system consumes a larger fraction of gross domestic product than most other countries, likely reflecting its citizens’ preferences and resources. Health care expenditures are closely linked to income. Yet, in contrast with the United States, whose health care expenditures are the highest percentage of gross domestic product in the world and where more than 40 million citizens are uninsured, the consumer-driven Swiss health care system achieves 30 percent lower per capita health care costs and universal coverage while providing reasonable quality of care.
These results can be attributed primarily to the control exercised by Swiss consumers and the relatively high cost-transparency of the system, requirement for universal coverage, and risk adjustment of insurers. Additional savings would likely be attained with liberalization of provider coverage and reimbursement policies."
http://www.forbes.com/sites/aroy/2012/12/26/switzerland-a-case-study-in-consumer-driven-health-care/
--David
P.S. Before you tell me Swizerland is some kind of special case, I could also have used Norway, Sweden, Taiwan, etc., etc. as examples. We have the highest cost per capita health care system in the world, and still have 40 million uninsured. We are the only modern, democratic country in the world with this crazy system. It is crushing us economically.
David, it is NOT the health care system that is "crushing us economically" it is the spending of congress on turtle crossings, Obama phones and the like.
DeleteMost Americans get their health insurance through their employer which does NOT involve the government in the least! Your argument is a canard sponsored by those who want us to be just like the other failed countries in Europe.
Yes, Glass-Stegal was a very big contributor. So was the Commodity Futures Modernization Act of 2000, which completed the deregulation of derivatives.
ReplyDeleteThe CRA was insignificant, for the statistical reasons I have shown you all day today.
"Banks then combined these multiple bad loans into packages and sold them as good products, which turned out to be bad."
No, no, no. They didn't just happen to "turn out to be bad." They were KNOWN to be garbage by the mortgage lenders and banks that were producing them. They were colluding in securities fraud.
--David
I don't know how to answer your "securities fraud" comment. Before the collapse of the residential market, the prevailing view was that residential real estate ALWAYS went up. If you held a contra view, you were scoffed at. Heck even "experts" were saying that you should pull all the money out of your house and invest it in the market.You would be paying 6-8% and getting returns of 15-20%.
DeleteIt turned out to be stupid, but many conservative money managers lost billions for giving sensible advice.
As far as fraud, up to that time "mortgage backed securites" were thought to be safe. There had been little problem with them over the previous years and the "experts" had told the investing public they were safe as a bond.
Maybe a few knew that they were putting "lipstick on a pig" but most did not. Heck, the major company presidents did not even know the product they were selling. All they knew is that it was making the company a lot of dough! That is hardly fraudulent.
It is easy to look back and see what was going on and scream like a little girl, however, had we had this discussion ten years ago,you would have been a big promoter of the products!
Meanwhile, here is a whole list of specific reforms that would substantially reduce government costs on health care…
ReplyDeletehttp://www.americanprogress.org/issues/healthcare/news/2012/08/02/11970/cutting-health-care-costs/
The health insurance companies and big pharmaceutical lobbyists would descend on Washington D.C. in droves if any of this were attempted.
--David
I read the article. It is a bunch of hooey. First of all, none of these "savings" will effect the cost of health care to the private insurance market. I can see how savings from bundling saves money for the insurance company but that does not effect the government at all!
ReplyDeleteAnd talking about bundling which essentially paying the same amount for the same illness. For example, if someone presents with a heart attack. the insurance will pay the same for indigestion as it would for a heart bypass? Or a stent verses a heart bypass? Each patient is different and the treatment would then be different. Hooey!
Another suggestion is that all services should be purchased at the lowest cost. Sounds good in theory, but in practice, do you want the cheapest heart surgeon doing your work or do you want Dr. Debakey? by the way, how does Dr. DeBakey's fee to the insurance company effect the cost to the government? I can't figure that out.
Fact-checking…
ReplyDeleteHealth care accounts for 22% of the federal budget in 2012. Defense is 19%. So what the heck are you taking about? If you want to talk about spending, these are the top two spending contributors to the deficit, not turtles, etc. which is all in the miscellaneous 8% "other" category. Cutting the cost of health care and defense is obviously the place to start.
You wrote..."Most Americans get their health insurance through their employer which does NOT involve the government in the least! Your argument is a canard sponsored by those who want us to be just like the other failed countries in Europe."
Nonsense. I gave you that statistics on Switzerland. I could do the same for other countries with universal health care. Most of the money spent on health care is for people with major/chronic diseases (heart, diabetes, cancer, etc.) and these are disproportionately elderly people whose medical bills are paid through Medicare/Medicaid. That is what accounts for the 22% of the 2012 federal budget. Switzerland holds down those costs through regulation of the health insurance industry. In fact, they are legally required to provide mandatory health care at no profit. They make their profits selling supplemental insurance to people who can afford it. You may not like this system, but please don't tell me it doesn't work to hold down the costs of health care way below what the U.S. government pays for health care and virtually everyone in Switzerland has health insurance coverage. So does nearly everyone in Sweden, Norway, Germany (for centuries), Netherlands, etc. and their countries are not going bankrupt.
--David
Switzerland is NOT a failed country. Greece, Spain, Ireland etc are and you see the problems there. You cannot pick out one country and claim that it works.
DeleteAnd before you comment about Norway, Sweden etc--they spend 80% of their income on taxes!
You wrote...
ReplyDelete"I can see how savings from bundling saves money for the insurance company but that does not effect the government at all!"
Huh? The providers are getting paid by the government in the case of Medicare, Medicaid, etc. Changing how (and how much) doctors, hospitals, drug companies, get paid for their services is one way to reduce those costs. Of course, the other way is to never try to change anything about the "fee-for-services" model (i.e., they set whatever prices they want and the government obediently pays them whatever they want, including expensive, experimental drugs, procedures, etc.). Is that what you want to keep going?
--David
"Financial firms like Goldman Sachs profited tremendously by purchasing loans described widely in the industry as "liar's loans," Black said. These loans were made without the borrower having to prove income, or even that he or she had a job.
ReplyDelete"It makes no sense that an honest lender would ever make liar's loans," he said. Nor does it make sense that a sophisticated bank like Goldman, which runs an entire business based on the ability to calculate risk, would purchase such dangerous loans without knowing that they were toxic, he said.
Indeed, the Financial Crisis Inquiry Commission produced evidence last year which suggests that Goldman Sachs traders knew these investments were more dangerous than they were letting on to their customers. Internally, they characterized offerings as "junk" and "monstrosities" even as they offloaded the mortgage bonds onto investors, according to the report.
The SEC came to the same conclusion when investigating whether the bank had misled investors about a product known as Abacus. That probe led to a $550 million settlement in 2010.
The SEC has won $2.2 billion in penalties stemming from financial crisis-related cases, though it has been dogged by complaints -- most notably from federal judge Jed Rakoff -- that its fines are too small and that it doesn't target individuals often enough. An SEC spokesman declined comment."
---------------
Losing court cases and paying monetary fines is no deterrent to Wall Street so long as none of their executives actually go to prison after being convicted of securities fraud. They are above the law.
--David
Finally, I would agree that until execs have to pay with their freedom, we will not see anything but the wild west.
ReplyDeleteAlso, we should let these companies go bankrupt instead of bailing them out. Giving them money to save them only sends the message that regardless of their recklessness, it will not hurt the company or the execs.
Switzerland is just one of many countries around the world that have better health care systems than the U.S. by objective standards. None of them are going bankrupt, either. Here are 6 more…
ReplyDeletehttp://www.reuters.com/article/2010/06/23/us-usa-healthcare-last-idUSTRE65M0SU20100623
As for the European periphery countries (Greece, Spain, Ireland), their core problem is not health care costs. It is that they have no control over their currency and so, unlike other countries outside the Eurozone, they can't use monetary policy. They are at the mercy of the European Central Bank. The austerity programs have also hurt them. Each has other special fiscal problems unrelated to health care. This is a separate topic.
As far as taxes in Norway, Sweden, Neherlands, etc. is concerned, all European countries have revenue as percentage of GDP under 30% (not 80%). Of course, that is still 3 times more than the U.S. but then that contributes to why they have federal budget surplus while we run trillion dollar deficits. My point is that universal health care lowers per capita health care costs compared to the U.S. model which is not only the most costly in the world, but also the most inefficient because of our 40 million uninsured citizens (among other things).
--David
The Sweden experiment should be looked at before going all happy over their "success."
ReplyDeleteHere is more on the results of the Swedish experiment. http://www.forbes.com/sites/paulroderickgregory/2012/05/13/look-to-sweden-obamas-high-tax-gurus/
As far as Norway goes, their taxes are higher than those in the US. Here is a comparison: http://www.inc.com/magazine/20110201/comparing-tax-rates-in-the-us-and-norway.html
ReplyDeleteYes, tax rates are higher in Norway and Sweden. What does that have to do with comparing their health care systems to ours? The relevant statistics for evaluating health care between countries is per capita health care costs (what you pay) and population health statistics (what you get for your money spent). All these countries I have mentioned (and more) achieve better health outcomes at lower per capita cost than the U.S.
ReplyDelete--David