Friday, December 23, 2011

Myth Exposed; Governtmnet regulation caused the economic crisis

The audit over at the CJR has a great piece, honoring a great piece, the pionts out a handful of holes in the Republican myth that claims the federal governments bloated regulatory agenda caused the economic crisis, specifically via Fannie and Freddie, when they were forced to lend to those who could not afford to pay back loans.

The first thing I ever read to poke holes in this myth argued that the regulation did not force loans to be given out willy nilly, to anyone. The regulation merely said that after decades of banks refusing to go into low income neighborhoods causing them to further deteriorate and giving them no hope of rebuilding that the banks had to open up shop in those neighborhooods. But they did not have to give out loans to unqualified individuals. There are still many who qualify for loans in poor in communities.

Now to the audit for more proof.

  • here were contemporaneous housing bubbles in countries like the UK, France, and Australia, that are beyond the reach of Fannie, Freddie, and the Community Reinvestment Act. 
  • It points to the gigantic commercial real estate bubble that inflated at the same time as the housing bubble, with no government aid, and collapsed worse than housing.
  • Blaming the GSEs is seriously problematic too. While they certainly contributed to the size of the bubble, it was on the margins of a private-securitization-driven bubble. Frannie-bought loans were also far better than private-sector loans, defaulting at about half the rate of private-sector loans.
  • The CRA thing is particularly funny since the Federal Reserve, of all bank-friendly places,found that “areas disproportionately served by lenders covered by the CRA experienced lower delinquency rates and less risky lending.”

Tuesday, May 3, 2011

Regulatory Agencies

It could be argued that our nations regulatory agencies hold more power than any branch of government. Congress can pass any laws they want but the regulatory agencies will pick and choose what it enforces.

For example you have individuals like Allen Greenspan who are in charge of the Federal Reserve Bank. Allen Greenspan has said many times he does not believe in regulating the market, yet a large role and responsibility of the FED is to "supervise and regulate banking institutions". 

So is it illegal for the most powerful banking regulator in the nation to not regulate? Is it illegal for the President to even nominate someone to do a job who doesn't believe in doing said job? 

Lets take this pattern and apply it to another situation. Imagine the police department hiring a drug enforcement agent who does not believe in regulating drug trafficking, or a homicide detective who didnt believe in enforcing our nations murder laws, or a traffic cop who didnt believe in enforcing our traffic laws. Sounds crazy right. That shit would never happen. 

So how the hell does it happen with the largest most powerful institutions in our country, the one's that regulate Wall Street where our retirements are kept, the EPA who make sure our air and water is safe, the FDA who make sure our food supply is not poisoned. 

Thursday, April 28, 2011

Inside Look at DC

Reading an article about the battle on capitol hill over the fee's credit card company's charge stores for credit card transactions when an anoynamous senator weighs in on how Washington really operates,

"The fights down here can be put in two or three categories:
The big greedy bastards against the big greedy bastards;
the big greedy bastards against the little greedy bastards;
and some cases even the other little greedy bastards against the other little greedy bastards.”

Wednesday, April 27, 2011

The People's Budget

The main Politcal battle right now in this nation is not what it should be.

If it was about the corrupt system on Wall Street that created a collapse and are now profiting off it without accountability, it would have been sufficient. (in honor of last weeks passover)

If it was about the future of our Nuclear Power Plant system around the country that is aging, and that has never created a way to safely dispose of the waste, and could lead to a disaster like we are seeing in Japan if not audited, it would have been sufficient

If it was about how millions of Americans are being illegally foreclosed on by a corrupt mortgage industry, it would have been sufficient

If it was about how we have a huge amount of unemployed workers fueling the cycle of decreasing demand which further fuels layoffs, it would have been sufficient

If it was about how we are involved in 3 wars right now costing us too many lives and too much money that we dont have,  it would have been sufficient

If it wasabout how a 2010 Supreme Court decision now allows corporate american to spend unlimited amounts of undocumented money on political campaigns, but it isn't, it would have been sufficient

If it was about how corporate america has virtually taken control of our government by sponsoring elections with cold hard cash, by lobbying for laws to be passed in their favor, by lobbying for less regulation, by getting their own in top position of government regulation, and by giving million dollar jobs out to regulators and congressman once they leave the halls of government, but it isn't, it would have been sufficient

But none of these items are on top of the political agenda, instead its the budget. How much we spend.
Paul Ryan the Republican Congressman struck first with his idea of how to spend less money. He want to give out tax cuts to the rich, end medicare by having seniors go to private insurance ( we hope private insurance will take them), and cut all kinds of federal programs, that feed, educate, and cloth the poorest and weakest amongst us, which is exactly what Jesus would have done.
The President is willing to negotiate but refuses to end medicare.
But the third way that is not being discussed is the People Budget created by the largest coalition in the House, the Progressive caucus. And remember in 2010 when the Democrats lost many House seats, most were from the Blue dog (corporate sponsored) coaliton, and very very few from the Progressive Caucus.
The People Budget is the most rational thing to come out of Washington in years.
The plan calls for
-invests 1.4 trillion in education, and job creation
-ends bush tax cut
-increases taxes on millionaires to 49%,
-tax capital gains as income instead of less than income
-close corporate tax loopholes,
-end big oil subsidies
-start taxing the derivative market
-public option for health insurance, forcing competition
-every one pays into social security not just the first 100k of income
-nothing happens to medicare and medicaid
Resulting in a a surplus by 2021.
The only problem with this besides it making perfect sense, is that it will take money out of the pocket of those that run this country.

Tuesday, April 26, 2011

Minimum Wage

Thom Hartmann points out that every single time except for once, the federal government chose to raise the minimum wage the result was a growing economy and job creation.
He also points out the example of Henry Ford, who started his company by paying employees a wage where they could not afford to buy the product they made, the ford car. His solution was to increase their pay, making it possible for his worker to buy his car.

Guess what happened? When the worker could afford the car they bought them, the increase in sales was enourmous where ford had to expand his business and hire more workers. Thus disproving the Republican myth that if you make the CEO spend more money he will automatically fire more workers. This is the reasont the modern coproration uses to stop new regulation, to stop new taxes, to fight for tax cuts.

Remember its just a myth that was proven by one Henry Ford, who spent more money on his labor and was rewarded with increased demand and sales and profits.

So next time you here this Republican myth I mentioned above, ask for an example, a real world example of their myth occuring, if they cannot come up with one, its just a talking point.

Corporate Power

Just watched another great episode of Thom Hartmanns tv show, The Big Picture, on RT TV on youtube where he talks about the rise of corporate influence in this country. He said until the 1890's it was illegal for corporations to lobby politicians, or attempt to influence any election or law, the punishment was jail time and the corporation would be dissolved.

But starting will Abraham Lincoln, who gave out tons of free land to the Railroad barons, so they could built a trancontinental railroad, so the North could win the Civil War, corporate power grew among the barons to where a "small group of men became the wealthiest men on the planet."

"With that wealth they bribed a few members of the Supreme Court so they would rule that corporations had the same rights as people, so there money could influence elections and law."

In 1870's a Wisconsin State Supreme Court Justice warned his law students, basically saying corporate power is building, for economic and political power,
"The question shall arise in your day, which shall rule, wealth or man, which shall lead, money or intellect, who shall fill public stations, educated and patriotic free men or the fuedal serfs of corporate capital." Edward G. Ryan

The Railroad barons than gained citizenship status for all corporations when in a lawsuit that went to the Supreme Court, a court reported noted the citenship-like rights belonging to the corporation.

2010 citizens united Supreme Court officially allowed corporations to spend unlimited amounts of money to influence the political process and not report who they donate the money to. The result was 300 million dollars was spent on the 2010 political campaign, up from 60 million in 2006.

Wednesday, April 20, 2011

State Banks

"Not a single North Dakota bank has failed in more than 10 years. By contrast, in the other 49 states—all of which lack their own bank—nearly 300 banks failed in 2009 and 2010 alone. "

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