Home > Cande = Conjecture & Exaggeration, Fande = Fact & Evidence, Original Thought, The Economy > Those Demagoguing, Dogma-peddling Republicans

Those Demagoguing, Dogma-peddling Republicans

* Remember, the Republicans had a stranglehold on all 3 branches of government from 2001-2006. Also, remember the heyday of “Subprime” was 2004-2007. The Great Recession, which started in 2007 as a result of Subprime-Mortgage-backed Securities on Wall Street, is the result of Republican Party Mismanagement. Wall Street spread the virus of those “toxic assets” by selling the “Subprime”-stocks to banks all over the world. All along the Bush Securities and Exchange Commission allowed “self regulation” by the Wall Street Banks: there was no regulation from the Bush S.E.C. when it came to “Subprime.” Now, the Republicans still have a stranglehold on the Judicial Branch, a partial “sleeper hold” on Congress, and they used their obstructionist tactics to hold President Barack Obama hostage to their ideological demands concerning Tax Cuts for the Superwealthy.

** Remember, Republicans are the problem for the Middle Class. Republicans enjoy the taste of flesh from an American worker who makes less than $250k per year. Watch out my fellow Americans of the Middle Class, because Republicans are sizing you up for breakfast. The Republicans are trying to dismantle Social Security and squeeze the Middle Class for productivity in the work place, so that insider-trading banksters and greedy corporate executives get most of the profits (yeah, Wall Street is all about “insider-trading”…reference the latest hedgefund investigation by the FBI or listen to Nomi Prins, former managing director at Goldman Sachs, talking about Goldman “front-running” its customers in the following youtube video.)

Minute 4:30

*** Always remember: Republicans will lie, cheat and steal.

source: http://www.nytimes.com/2010/12/18/business/18nocera.html?pagewanted=2&hp

EXCERPTS:

“To fix a problem, though, it helps to know what the problem is. The [Financial Crisis Inquiry Commission], with all those witnesses and documents, could have really helped here. But the paper released by the commission’s Republicans this week reads as if they couldn’t be bothered. It simply reiterates longstanding Republican dogma that could have been written without a $6 million investigation. None of which bodes particularly well for the next two years of ‘financial reform’….

The only problem with Mr. Wallison’s theory is that it’s not, as they say, reality-based. Anyone who has looked at the role of Fannie and Freddie will discover they spent most of the housing bubble avoiding subprime loans, because those loans didn’t meet their underwriting standards. (Indeed, for most of their existence, Fannie and Freddie didn’t so much meet their affordable housing goals as gamed them.)

When Fannie and Freddie finally did get into the business, it was very late in the game. But the motivation wasn’t pressure from the government; it was pressure from the marketplace. You see, the subprime companies and Wall Street had long used subprime loans as a way to do an end-run around Fannie and Freddie. By the mid-2000s, subprime underwriting and securitization had become so profitable — and such a large part of the overall mortgage business — that Fannie and Freddie felt they had no choice but to dive in. In other words, the G.S.E.’s were reacting to the realities of the market, not to the government. They were worried about losing market share….

The solutions they offered were nice-sounding but impractical — ‘Re-establish a housing financial market that has long-term stability in which private capital is the primary source of mortgage financing’ — and utterly in denial about the fact that it’s the private market that has gone AWOL. Just as the market failed during the bubble, so it is now failing again.

I’m all for reforming Fannie and Freddie. Who isn’t? But at this stage of the game, you can’t reform the G.S.E.’s without reforming the private market too. That may not be where the Republicans’ theory of the case takes them. But it happens to be true.”



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