Cutting Through The Crap

Friday, January 22, 2010

Oversight


I'm no economist. But it seems sort of intuitive that, since the last two experiments with deregulation and interfering with investigations of banks led to disaster (the S and L crisis, under the first Bush, and, although it seems to have fallen from the collective memory, the current crisis under the second one), new regulations must be in order.

It's interesting to me that immediately following the revelation (hardly a surprise) that Obama wants to impose new regulations (and I admit I have no idea what, exactly, they'd be, how well-constructed, or whether they'd get through this -- or any -- Congress), the Dow tanked. The Dow, which, as a result of previous "policy," was, not long enough ago for most people (other than those with teabags on the brain) to have forgotten, was at 6000. Yet attempts to enact reforms aimed at preventing another cataclysmic fall are seen as a bad thing. By investors, of all people.

I will say this, however: I wish President Obama had, in his speech, laid off the populist crap. It seems to me an outline of the causes of the fall in relation to lack of regulation would have been enough to make the deal. Nor do I think bonuses are much a part of the big picture. They're obscene all right, especially when it's in the bailed-out banks. But harping on fat-cats is too much like the sort of politician I thought Obama was not. There's a case to be made. It doesn't need to be in the rabble-rousing mode. It's a little too Foxobeckian for my taste.

[Addendum, a while later: Right on cue, the Republicans resort to the usual. Not a little ironic, of course, given the "us versus them" Palin rhetoric, and the anti-"elitism" (whatever that is) core of their entire presidential campaign.]
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26 comments:

egomosperficio said...

despite the language the media used, i don't really think we can say that the market 'tanked', 'cratered', etc. hope obama can get this done.

Anonymous said...

Re: your point that the last two experiments with deregulation as evidence that new regulations must be in order.

You didn't mention the GLBA, enacted by Bill Clinton. Democrats are still bantering over whether that helped or hurt during the recent subprime mortgage problems (see criticisms vs defense in GLBA wiki article). It seems that no one can agree on how best to regulate (control) people and their actions to prevent economic ups & downs. Some even say that the dereg created by GLBA helped lessen the "mortgage meltdown".

http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act#Criticism

I find it ironic that no one mentions the creation of easy credit via low interest rates, the CRA (updated by Clinton), and the unintended consequences of both the CRA and low interest rates leading to increased subprime lending so high risk customers could get mortgages. We are considering creating regulations to prevent the entirely predicatble private sectors response to governmental encroachments (in the form of creating "easy credit")on the marketplace.

If we insist on helping the poor buy homes, fine. But, let's call it what it is, a subsidy, and budget accordingly. Giving mortgages to improperly underwritten risks is not going to be a profitable long term business model and creates the need for regulations to avert the effects of the "easy money" infusion. It would cause much less havoc in the private sector to just give direct subsidies to help people pay their mortgages if that's what the administration wants to do.

Re: It seems to me an outline of the causes of the fall in relation to lack of regulation would have been enough to make the deal.

Being that many see the government intervention in the markets by creating "easy credit" as the catalyst for the problems, that may not be a good strategy for O as it is a big tangled web with lots of blame to go around to everyone. I don't think he would come out looking good if he educated the public about all the culpable parties.

Re: bonuses (are)..obscene all right, especially..in the bailed-out banks.

I'm with ya here. The bankers were allowed to capitalize their gains, but never had to capitalize their losses. If "O" truly felt the banks were "too big to fail", he should have seeked to use federal anti-trust laws to break up these banks immediately after they were bailed out. I haven't heard any talk of that happening. Now, we have banks that know, 100%, that they have a safety net in the form of government bailouts should something go wrong again. This is a market distortion & competitive advantage that favors them over smaller companies who have to be right almost all of the time to compete.

Regards,
PrecordialThump

Sid Schwab said...

I said I'm no economist, PT, but it does seem that some sort of regulations are needed, based on the two major meltdowns to which I referred. I don't doubt there's more involved than simply the facts that each was in a Bush.

You repeat the CRA blame issue. From what I've read, it's been shown to be no part, or a very small part, of the meltdown: for one thing, most CRA loans were kept in the community banks whence they originated, and were not bundled into the mortgage-backed securities that were the main problem. For another, the record is that loans made under CRA were defaulted at a much lower rate than the "typical" loans.
Here's but one of the articles on the subject.

Jim said...

For an interesting education in how we got where we are check out The Baseline Scenario here. http://baselinescenario.com/

Unfortunately Sid, reading you and Baseline, both of whom I tend to agree with leaves me without much hope for this country or man.

Keep up the good work.

Frank Drackman said...

"Laid off the Populist Crap"?!?!?!

That's 1/2 of your President's(Peace be upon Him) appeal..
Maybe the Financial Markets DO need some Regulatin'. Hope he uses the same masterful powers of persuasion he did with Healthcare Reform...
Oh did you notice, Git-Mo's still open? and full of A-rabs who not only haven't been given their Miranda Rights, haven't even been charged...
Might wanta get to work on that...
or Not,

Frank

Anonymous said...

Dr. Sid,

Subprime loans have always been available, but they began being issued much more frequently in the mid-1990's.

We need to figure out why bankers decided to more frequently use this long available lending product.

Here is a better explanation than I could type:

http://www.downsizinggovernment.org/hud/housing-finance-2008-financial-crisis

Regards,
PrecordialThump

P.S. Maybe we should regulate the "regulators"? Or perhaps just let banks go back to normal underwriting of risk without pressuring them to meet certain quotas? Maybe we shouldn't guarnatee the mortgages through Freddie/Fannie?

Sid Schwab said...

Well, the Cato Institute is not exactly neutral on regulations. And the article repeats the CRA stuff. Not being a mortgage lender myself, I can only rely on the work of others, which seems to exculpate the CRA as a major factor.

Given the mess they made of the health care bills, I'm not at all convinced Congress could come up with reasonable rules, even though it seems a simpler issue than health care reform.

SeaSpray said...

This is off track Dr S.

http://www.youtube.com/watch?v=J5l2Zy3FFmo

Maybe you saw this ..Jon Stewart taking Olberman to task for what he said about Brown and some others.

Whole thing is Hilarious.

Stewart is so funny..LOVE..LOVE LOVE his expressions. :)

Colbert good too.

The one you put up where he chastises the dems for their mishandling of opportunities is one of the funniest things I've seen. If it was reps ..I'd think the same exact thing.

I know people have differing view points and that's a good thing ..even if crazy making sometimes... because we need balance. But Olberman ..in this clip ..I half expect someone with a straight Jacket or a net to come out and take him away when he describes Brown and KUDOS to Jon for calling him out on that.

You know how you call conservatives RWS? Well Olberman qualifies as a LWL (left wing loon). He is so off the wall vile and out of touch with everyday people that I might start watching for the amusement factor.

I know Beck gets a bit manic sometimes too (he's also a comedian)..but he's not mean. The interesting thing about his show is that he presents what he views as the facts. He asks questions and he ENCOURAGES everyone to look up the info for themselves. And he goes after Republicans too.

I definitely don't agree with Jon Stewart most of the time ..but I greatly respect him for his fairness now.

BTW - isn't it ridiculous that Brown hadn't even gotten to the senate yet and a reporter questioned if he had thoughts about running in 2012 for the presidency??

"Foxobeckian " ...Good one. :)

I vaguely remember the S&L crisis, but wasn't paying attention back then. I didn't follow politics closely and had no idea about lobbyists and how both parties sell out for partisanship, personal gain, etc.

Seeing how this health care bill was handled was a MAJOR eye opener. It baffles me how if you are trying to insure the uninsured ..you take the money and give to programs that have nothing to do with health care. this was a dem thing ..but BOTH sides have to stop this. And the deal with the union that they are exempt from the 40% tax hike on ins. No transparency. It was all so sleezy.

Sid Schwab said...

SS: not only did I see the Stewart thing, it's in tomorrow's post. I also point out that Olberman apologized. When did someone on the right criticize Beck or Hannity; when did any of them apologize? Olberman rarely comes within a continent of the crazy you love on Fox. Really. There's no comparison. And, unlike you and the steady stream of hate on Fox, I stopped watching Olberman a long time ago.

I agree the bill was way too complex and laden with give-aways (remember Bush's drug plan?). And, yeah, other than being available online for everyone to read, it's not transparent.

I've written here that they screwed it up. On the other hand, how much better might it have been had a single Republican agreed to vote for something? They'd have had to do much less to get buy-in. Even when they DID give Republicans things they wanted, they STILL voted no. So when one party is committed to obstruction, only considering their own power and not what the country needs, we're screwed. And we are.

Anonymous said...

http://www.youtube.com/watch?v=ydNY-9xNzB0

I don't have a PhD in apologies, but something tells me that could be classified as "less than sincere".

Seems the RWS (insert little trademark thingy here for Dr. Sid) have their own bizarro world mirror image in the form of a LWL (insert little trademark thingy here for SS)

And people continue to listen intently.

Regards,
PrecordialThump

Sid Schwab said...

Not many, PT; certainly not as many as those who listen to Beck and Hannity, et al, who are much worse than KO, and much more consistent. Watch for tomorrow's post. KO's ultimate apology was better (and it certainly should have been: that sort of rhetoric is much more at home on the right); and I'm unaware of anything like it from any of the RWS™. Nor, for that matter, are there anything NEAR the numbers of LWS™ as there are RW ones. Explanation tomorrow.

(You must not have a Mac. The ™ thingy is very easy. And, hey, look what else I can do: Ω≈ç√∫˜µ≤≥÷æ…¬˚∆˙©∂ßåœ∑´®†¥¨ˆøπ“‘≠–ºª•¶§∞¢£¡ ¸˛Ç◊ı˜Â¯˘ÆÚÒÔÓ˝ÏÎÍÅŒ„´‰ˇÁ¨ˆØ∏”’’»±—‚·°‡flfi›‹€⁄)

SeaSpray said...

Dr s - Can you please give me an example of what you call crazy and mean from hannity, beck or fox in general? What is mean or unfair reporting by Greta van Susteren (sp?) I see dems on conservative programs that *they are friends* with but passionately disagree with politics. I have seen those two men tell people *do NOT be violent* and say *they want our president and his family to be safe* ..but they disagree with the policies.

I hope you aren't seeing me as mean because I am not.And you must know that.

"Olberman rarely comes within a continent of the crazy you love on Fox."

Dr S --that's because Olberman's not even on the same planet with crazy. Olberman is out there on planet crazy, drops in to do his show and is back out there again.. which might explain why he is so out of touch with everyday people across america. ;) Brown excerpt great example. And he did not specifically apologize to brown... and wasn't even a sincere sorry. "Sorry" vs I am sincerely sorry for the things I said about Senator Brown,etc etc. Like when we tell our kids that is not how you tell someone you are sorry and we teach them to put effort into it.

Show some atrocious thing sean or glenn said on that level and I will agree with you.

I did turn both CNN and MSNBC on during brown's acceptance speech to see how fair and balanced they were and neither station had it on when he was talking. 41 shows a lot of promise ..kind of reminds me of young John Kennedy (son) ..his presence. Definitely seemed real.I think he would've helped the knocked down reporter up and not denied he ever saw him.

I shared the link because I thought you'd think it was funny since you liked the other one. As I said ..I like Colbert too and you know they were hard on Bush. Still funny though.

How about apologizing to tea party people? if it weren't for my knees and standing ..I would've gone to a local one. Regular concerned citizens attend, from all socioeconomic levels ..all ages. pelosi likened them to nazis, they've been laughed at, called stupid and I don't remember all. I saw what you said about conservatives being stupid and JD called you out on it a few posts back. because people disagree doesn't mean they're stupid... or bad/violent people as pelosi and her ilk tried to portray. The violent people are the ones wearing masks and breaking windows during summits. And as far as those idiots carrying a nazi sign at the rallies ..*we don't know if they are a plant from a liberal or a truly ignorant RWS... BUT those few people did not at all in any way represent me or the thousands of americans that turned out for their voices to be heard.

The drug plan would not totally change the entire health care system or impact people as seriously, be as expensive, potentially compromise the quality of care,or seriously affect the ntl econmomy on the same scale etc. What should the reps have gotten on board with? To go along would've let it go through. they didn't even know what was in it and they called the tea party people stupid! Why not do tort reform? And the dems didn't want to put some of it on line. The 40% tax on ins premiums would've seriously hurt my husband and me. We have a good health plan that he has worked hard all these years and contributed too. Then unions exempt too? Unbelievable!

I am confused and maybe I missed it. But with the dem 60 votes how did the reps obstruct? Do you mean during Christmas season when they all had to stay there? Thank God or maybe we'd all be stuck with this.

Yes you have said they handled it badly. It was just so egregious ..all the things they did..people got scared and woke up and they spoke loud and clear in VA, NJ and MA... in MA.

And any rep that does any deals like this in the future ..the people should protest the same way.

Sid Schwab said...

Gimme a break, SeaSpray. Death panels, deep seated hatred of white people, Nazi, concentration camps, not an American, 2009 coldest year, a "news" organization pushing the tea party, hyping Brown, while calling itself fair and balanced... it goes on and on, and it's unprecedented. What world are you living in?

The vile stuff the tea partiers shout. The fears they have based on the lies they're fed by Fox (not to mention the corporate interests who've played them for fools.) What is it, exactly, that tea partiers are FOR? What solutions do they offer? Have you heard any? Lower taxes? Like Bush? They seem to love their guns and say Obama wants to take them away. Based on what?

Look. We can't agree. In my mind you've swallowed whole everything you hear from Beck. How much do you watch Olberman? (I quit watching him a long time ago, because I couldn't stand the way he was becoming like Beck and O'Reilly.) Other than his rant on Brown, and his self-absorbed egotism (which is a fraction of that of Beck, Hannity, O'Reilly, Rush, Savage, Coulter, Rove, Morris) what can you show that he's gotten factually wrong? But don't bother. We're oil and water. Anyone who thinks those guys have never said anything wrong is, well, I have no more words. So don't expect them.

Sid Schwab said...

Oh, what the hell, SeaSpray: here. There's a ton more, and on Beck there's so much I simply can't muster the effort. But you could. If you actually wanted to.

SeaSpray said...

What *vile* stuff did tea partiers shout? They were angry when the senator said he didn't read the bill. They didn't hurt anyone or break anything. So they shouted. people are very upset. But what was VILE?

I like what PT said "Seems the RWS (insert little trademark thingy here for Dr. Sid) have their own bizarro world mirror image in the form of a LWL (insert little trademark thingy here for SS)"We could do this ad nauseam.

It's 01:13 here and so too tired now but will come back and look at your clip tomorrow nite or tuesday.
Savage, Coulter - do say mean things. I can't even handle listening to Savage and don't. Ann sometimes I agree ..but I would never make my point with meanness I know you disagree but now I really have committed to watching mostly fox and I do believe that hannity and beck are good family men with good values that take issue with this administration. Sean has kind eyes. The people on the left that come on like him. he is ALWAYS respectful. You may not agree with his politics..but he is not a bad man. Beck ..whether you agree or not ..you have to give him credit. No other media person brought the info out about Van Jones (white people poison water, etc)and other important issues about people surrounding the president. if it were not for his asking questions ..we would not know these things and I think they are important. can you please provide the nazi link you refer to.
Dr S - Beck asks questions ..yes puts theory out there but then tells people to research and so if he is willing to encourage people to question and research ..what lie is he perpetuating that won't be found out?O'Reilly annoys the heck out of me but he seems to report fairly. Tell me the lie he perpetuates please so I can look it up.He calls it like he sees it and does nOT always take the side of the reps. he sticks up for the president. I have seen him do it. And he is one of the few if not the only fox person to be invited to the president's dinner (don't recall what it was for), and I guarantee you ..the president didn't invite hannity or beck and the president himself said he did a fair interview. O'reilly annoys me sometimes when he defends the president when I don't agree. You must not watch him if you generalize like you do.
Rove ..I like him and what he says makes sense to me, but don't forget I am a conservative ..although thinking of changing back to an independent conservative. I started out that way.I don't know what I think of Morris. didn't he work for clintons? what happened there? Things he says seem to come true.
You didn't mention greta on fox news at 10pm est. She shows full clips of controversial events and lets you decide for yourself vs taking something out of context. She fairly and respectfully interviews both sides. Hillary recently and I believe sincerely said "Nice to see you Greta". When everyone was trashing Palin and family with lies during campaign ..she went up there and interviewed her at length. I have seen greta stand up for people on both sides. Do you watch her? If you tell me she's biased reporting ..then you do not watch her.Rush ..heh heh ..rush. he's excellent at what he does and I often agree with him but not always. he is very entertaining. After his chest pain incident.. I disagreed with his stating that *he paid his bill with cash* as if that were something we could all do. maybe I misunderstood but I was telling him that most people do not have the *cash* to pay their med bills and so I missed his point I guess. That's just not realistic.
Interestingly ..he saved 35% on his medical bill by paying up front without insurance ..but that's a whole other comment.
.Anyway YIKES now it's 01:41 and so do have to go. (was gonna make fudge for doc's office tomorrow maybe still will if I get going now :)I'm not ignoring your other questions. I'll be back...

Sid Schwab said...

SS, it's as if you have a part of your brain that destroys certain things as they enter. You didn't see the signs at the tea party rallies, with Obama as a Nazi, calling him a Muslim, claiming he's not a citizen? You haven't seen interviews of participants when they said they loved Sarah Palin but couldn't name a single policy of hers (as if she has any), nor had heard any of the refutations of her lies? Really, it's like being a holocaust denier. You, I mean.

I didn't mention Greta, okay. I also didn't mention Dooooocey and friends, who sit around agreeing with each other and suck neurons out of listener's heads the way a fire sucks oxygen.

You and PT point to KO. So do I. So do many liberals. That's about a 25 to one advantage for the RWS™, in terms of screamers.

Beck asks questions, all right. Seeing connections between random things the way a paranoid schizophrenic does. (That is NOT mean facetiously.)

It's one thing to be a conservative, SS. I've said many times we need thoughtful conservatives who are willing to be part of the solutions to the problems we face, most of which were caused by people masquerading as conservatives. It's quite another to be a non-stop purveyor of fiction, of untruth, or to be part of a network overtly committed to destroying a president.

I agree Rush is good at what he does, very effective. His lies carry more weight than others'. As does his hatred. His stance on Haiti, and on helping them, is just the latest example. You are among millions who like him. Which is exactly why we're heading down the toilet. Hope you can swim.

Anonymous said...

You're kidding! People called the president a nazi? Who would do such a thing??

http://images.google.com/images?hl=en&source=hp&q=bush+hitler&um=1&ie=UTF-8&ei=3e1dS9bKA4fuswP29aXTBA&sa=X&oi=image_result_group&ct=title&resnum=1&ved=0CBYQsAQwAA

jd

Sid Schwab said...

There's a huge difference, PT, between the occasional spouts from the random lunatic, and an entire movement, born, bred, and fed disinformation by a huge media network. And, you might have noticed, that the "mainstream" of the left never condoned that sort of stuff from its own. On the right, it's the core, the only, the essence.

There's simply no comparison between the occasional hyperbole on the left, and the constant stream of negativity, obstructionism, and the deliberate fomenting of falsehood on the right.

None.

SeaSpray said...

Dr S - I have to leave for an appt shortly and so will be back to address your comments ..but in reference to what you said I couldn't disagree more.

For one thing if it wasn't for FOX *no one* would've known about the ACORN prostitution and they do present both sides and they are not mean.

And I addressed the nazi signs in a previous comment and none of us know if they were plants.

If the left is alous a few loons then so are we.

Those tea parties represented average America that our politicians have chosen to steamroll over.

You are insulting me and so many very good people who are conservative and would never want harm to come to anyone. And we are intelligent.

And you know full well that stupid people ..apathetic and uninformed people are in both parties but too generalize ..just not accurate.

Greta does good reporting and she managed to be nice and respectful.

Sid Schwab said...

I'm glad you like Greta, SS. You've made it quite clear. And I'm sorry but among the tea party people, from what I've seen, there is a much higher loon quotient than in any political group of which I'm aware (okay, maybe skinheads are worse). Every interview I've seen has shown a shocking lack of information. They're just mad. At the guy who's trying to fix what Bush left behind. I've heard NO solutions proffered.

I don't mean to insult all conservatives. Just the ones who join tea parties and watch Fox and find it to be truthful and balanced. Unsurprisingly, that form of "conservatism" (I put it in quotes because they're really not conservatives) is exactly like religion: a deep need to believe certain things, and any facts that are in conflict are simply rejected. It's a match made in..... hell, far as I can tell.

Anonymous said...

"...the occasional spouts from the random lunatic, and an entire movement, born, bred, and fed disinformation by a huge media network."

Ahh--so I can disregard this as an occasional spout from a fringe leftie?

http://lifenews.com/nat5756.html

Oh wait--this is Harry, the leader of the dems! Well, he's second in command to his light-skinned friend...

jd

Sid Schwab said...

You're most welcome, jd, to disregard what I say for any of your preferred reasons. And, you're free to keep responding to my posts with the "I know you are but what am I" sort of comment, as opposed to providing your thoughts on the meat of the matter.

(If your disregard comment was, rather, at Reid's comments, feel free. On the other hand you might notice when someone on the left says something stupid, he gets tarred by the left as well as the right. That, of course, is entirely untrue of the RW idiocy.)

Most especially, you're even free neither to read nor comment, if you find it so annoying, and so hard to come up with some actual useful input. (You're not the reincarnation of a guy who likes beer are you? There are great similarities, although I admit that, with the exception of PT who occasionally actually engages in interesting conversation, there's a sameness among all those who defend the RWS™, here and everywhere else.)

Sid Schwab said...

Initially I published your comment, Eugene, because I agree completely. But I think there are some people -- and they know who they are -- who deserve, and seem to relish in direct attacks, and others that, I guess, do but don't.

Anonymous said...

Dr. Sid,

http://econstories.tv/home.html

No new info here, just presented in a different way. Here is little "ditty" relating to the root problem with the banks, bubbles, busts, and thus our crappy economy. I think dereg vs reg is like raking up the leaves in the yard of a house built over a strip mine.

Re: The side topic of the RWS/LWL:

They serve a useful purpose in the media, as they are the venue best equipped (and expected) to address some of the more unsavory actions/associations of political figures. Unfortunately, many choose to make these people their main info source. The lack of intellectual curiousity of portions of the American audience is what fuels these shows. Without viewership, they would just go away. What came first, the chicken (the audience) or the egg (RWS/LWL)?

Hannity & Olbermann/Maddow could run segments on how torturing terrorists provides some useful info vs not torturing terrorists allows family members/friends to turn in suspected terrorists since they know they won't be tortured and then debate that topic. Unfortunately, each chooses to present only their own side.

I've been searching for the most unbiased source of info, but it seems that one needs to take bits and pieces of info from both sides (and siphon out the fluff & exaggerations) to get the whole story.

Respectfully,
PrecordialThump

p.s. I am proposing a tax on people who have fancy symbols on their keyboards. Every American deserves to make a TM when arguiing on da intrawebs.

Sid Schwab said...

Well said, PT. I don't know how much you watch Maddow, but, really, I think she's the best of the lot. Clearly she has a LW bias, and she can get a little too snarky sometimes. But of all of them she's the only one who really engages with tough questions and thoughtful followup, holding feet to the fire no matter which side the speaker is on.

And, among all of them, she's the only one who invites good representatives of the other side and lets them have their say.

However, I admit I've stopped watching her, too. Not because she's offensive, but because I find I can barely stand to hear anything any more; it's so depressing what's happened to our political process.

Sid Schwab said...

PS: here's a just-published useful datum vis á vis torture.