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Old 09-28-2008, 12:42 AM
 
19,183 posts, read 27,763,990 times
Reputation: 4000

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Quote:
Originally Posted by Niners fan View Post
Are you disputing that the Clinton Administration did not pursue and pressure mortgage companies to pursue "creative" financing?
Yes, I am, because it is a corruption of the facts. Like every administration since WWII, the Clinton administration supported increased opportunities for home ownership, doing so in the context of the particular circumstances that existed during its time. The Clinton administration faced the continuing legacy of the redlining era, the lingering effects of the housing crunch of the early 1990's, and a relatively strict conventional financing regime with few practical alternatives that had pushed marginal buyers into predatory financing programs at rates 4-5 percentage points above the then prevailing conforming rates of around 7%. These were substantial obstacles standing in the way of economic progress for minority and other low and moderate income borrowers, a point that no one disputed. Dishonest reporters such as your historian-blogger friend take Clinton era encouragement that "the creativity and resources of the financial industry" be brought to bear in finding ways to qualify borrowers already carrying loans at 12% to qualify for loans at 7% as evidence that the administration tried to force "creative finiancing" (a term that did not even exist at the time) onto reluctant lenders, while ignoring the fact that mortgages actually then issued to such low and moderate income borrowers have performed as well as or better than anybody else's. None of the rubbish that triggered this current debacle originated in that era. All of it arose inder the unregulated, inattentive era of general financial mismanagement that has been the Bush administration.

Quote:
Originally Posted by Niners fan View Post
Since you are question his "economic credibility" should I take that to mean that your training is in economics?
Yes, adding better than three decades of professional experience in the field to it.

Quote:
Originally Posted by Niners fan View Post
Greenspan's training is in economics yet he has little economic credibility with some. In fact, he has done more to get us to this economic mess than any other single person.
This wasn't a one-man job. Not even Bush bears all the blame. If you read Greenspan's book, you know that he realized the risks his policies ran. In the end he was unable to say Sorry, America. Due to potential risks, the Fed is not going to be able to do anything to help you out of this recession that the bone-headed economic policies of your President have unnecessarily gotten us mired up in.

Quote:
Originally Posted by Niners fan View Post
I would think it is more important to analyze the strength of the argument but maybe that's just me.
If you invested as much effort as emotion into this theory, you never would have posted the Peter Coy link to begin with.
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Old 09-28-2008, 02:20 AM
 
Location: N. Ga
3,493 posts, read 3,103,253 times
Reputation: 1838
Quote:
Originally Posted by Tricky D View Post
Believing that the economy will correct humanity is saying that humans are reasonable beings who are never affected by irrational fear (or any other emotion).
Well... but in that same line, wasn't it the economy that made irrational thinking possible. There was an article the other day JS Online: Loans came easily, then fell apart. The first line reads, "While earning a salary of $21,000 a year, XXXX Robinson landed on top of the real estate world in 2006, overseeing nearly $1 million in property. What is rational about someone making $21,000 per year thinking they could go 800,000.00 dollars in debt? The economy itself was the driving force. Perhaps now that same bad economy might just correct humanity. We are definitely going to have to learn modesty, compassion, patience and even perhaps humility to get through these next few years I'm afraid.....
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Old 09-28-2008, 09:27 AM
 
19,183 posts, read 27,763,990 times
Reputation: 4000
Quote:
Originally Posted by Niners fan View Post
It may or may not be true that those who were the intended beneficiaries of "creative" financing were in an economic class that could afford homes in previous generations. That in and of itself is no reason to change qualifying rules and your assertion really proves nothing.
The standards for mortgage financing change all the time, and not just in terms of rates and points. Down payment and PMI requirements, LTV ratios, front-end/back-end ratios, credit scores, and employment histories comprise an incomplete list of the variables that have varied on their own terms and in terms of the weighting they have been given in standard mortgage loan underwriting practices. There isn't any sacred set of "qualifying rules" that Moses brought down from the mountain.

Quote:
Originally Posted by Niners fan View Post
Equality of opportunity is a conservative principle. Equality of result is a liberal principle. To the extent that the Bush administration has pursued the equality of result policies of the Clinton administration they were following liberal principles.
A common yet quite fallacious claim typically used as an attempt at refuge by an insincere conservative when confronted with unequal results that establish a presumption of unequal opportunity. Gee, there aren't any blacks at all at your lunch counter. Gee, there aren't any women at all in your upper management ranks. Typical liberal complaints based on a theory of equality of results, I guess.

Quote:
Originally Posted by Niners fan View Post
How do you know I was not referring to Obama when I said experience in politics is overrated?
I don't know and I don't actually care who you had in mind, if anyone. What I am criticizing here is the idea that the very talented people who spend their entire lives studying and working on issues such as those that are involved in the current financial situation are somehow all greedy or stupid or otherwise incompetent, while those who spend their lives trying to carve out a decent living for themselves and their families in some other and unrelated job and then go home and watch the nightly news before they go to bed must somehow know better what they are talking about and have superior insights into these issues. It simply doesn't work that way. And yes, being the apparently law-breaking mayor of Wasilla, Alaska, would count as one of those other and unrelated jobs. Everyone gets to have an opinion. Highly informed and tested opinion is usually better than barely informed and untested opinion.

Quote:
Originally Posted by Niners fan View Post
Congress has a history of identifying problems that may or may not exist and then proposing "fixes" that don't really fix anything (or made matters worse) and then coming back and saying that the problem is we didn't spend enough on the fix.
To repeat, Congress is a latecomer to this particular issue. It's Paulson and Bernanke who have done all the upfront heavy lifting. This is their basic plan that they now need to make politically palatable enough to pass. Meanwhile, we have John McCain apparently abandoning both the campaign and common sense to again grasp at straws by trying to derail the process, perhaps later to denounce it in a desperate strategy to invite and then ride a wave of popular anti-bailout bias to a gain of some points in the polls, while without some form of the buyout, the nation stands to go to he!! in a handbasket. This is exactly the sort of character-candidate that the Republicans have given us. When the tough calls come along, he opts for grandstanding and personal political expediency? Kind of makes you shake your head and wonder about the future of our country.

Quote:
Originally Posted by Niners fan View Post
I am not alone in being cynical when politicians come out and say that doing nothing will be catastrophic. Sometimes they might be right and maybe they are this time but they really have very little credibility with many of us.
An understandable reaction to years of outright lying and corruption from the Bush administration and various of its minions. With any luck, that whole crew will soon be washed out of town completely, to be replaced by a different sort of folk entirely. Perhaps then we can get back to governing as if governing actually mattered. Government doesn't work...elect us, and we'll prove it. After eight years, all of us are grown more than a little weary of that.

Quote:
Originally Posted by Niners fan View Post
Going back to your first comment, how many of them have training in economics and thus the credibility with you about the direction we should head?
Assuming you mean to refer to lawmakers themselves, relatively few. You likely underestimate however the degree to which lawmakers are informed by staff, among whom there are substantial numbers with credibility in this area. The bulk of the work in this town is actually done by two groups: staff and lobbyists. The lawmaker's job is to understand that work well enough to be able to cobble together a sensible political package out of it all.
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Old 09-28-2008, 09:38 AM
 
19,183 posts, read 27,763,990 times
Reputation: 4000
Quote:
Originally Posted by Niners fan View Post
You are taking my comments out-of-context. I recognize that there are problems with a pure free market economy. There are also huge problems with a centralized economy.
And contrary to opinion often expressed in C-D, there are myriad shades and variations between those two, many of which work better than either one of them. What we would like to find is the one that works best. If we miss out on that, we would at least like to find one that works well. What we have had recently has not worked well.

Quote:
Originally Posted by Niners fan View Post
I pointed out that Smith believed in some government regulation. He believed that government had a role in ensuring competition.
And in protecting society from competition, and in assuring (as in his support for public education) that elements within society could combine to work for the common good, the latter being a recurring touchstone in his work.

Quote:
Originally Posted by Niners fan View Post
The beauty of the invisible hand is that it sets prices and directs production much more efficiently than a group of people ever could.
I don't see anyone wishing to eliminate the role of markets. It is however foolishness to believe in market-magic. It doesn't exist. Take the good that markets do, and crop out the bad. The latter can be something of a chore, but it is well worth the undertaking.

Quote:
Originally Posted by Niners fan View Post
I would say that the goal of moderating recessions might be attainable. The goal of eliminating them is not. The economy is just too complex. But then my formal training is in history so what do I know?
History would be enough to show you that recessions have gone from being a rule to being an exception to the rule. The normal or natural state of a modern economy is expansion. Cycles are not natural. Recesions are not natural. They are a sign that something has gone wrong or has been done wrong.

Quote:
Originally Posted by Niners fan View Post
The American economy, historically speaking, is the greatest economy that the world has ever seen. It has done more to reduce poverty and suffering worldwide than any economy ever.
<waves flag>

Quote:
Originally Posted by Niners fan View Post
What has been the key to it success? The free market coupled with modest government oversight.
Actually free markets led to cruel cycles of booms and busts and to very uneven distributions of wealth that enriched a few and impoverished the many. All of the wonderful things you point to were achieved under forms of managed capitalism wherein markets were protected from the lascivious intents of manipulators and constrained in the ranges of outputs they could produce. A wild stallion may be a beautiful thing in theory, but if you want to plow a field, you might want to try breaking him to harness first.

Quote:
Originally Posted by Niners fan View Post
Yes, reckless as in borrowing money when interest rates are low. Too many people borrowed money they could not afford to pay back.
Most could easily have afforded to pay it back. Just not under the terms that unforeseeable events have imposed upon them. We confront much worse internationally all the time. The accepted approach there for decades has been debt reorganization that brings scheduled payments into line with anticipated ability to pay, sometimes accompanied by requirements for economic stabilization. There may be lessons to be learned there? Or would all that come instead under the heading of nanny state assistance to deadbeats?

Quote:
Originally Posted by Niners fan View Post
Yes, the guaranty from the government of loans that people could not afford. (Now we are back to the "creative" financing of the Clinton era.)
No, now we are back to the laissez-faire anybody can play by whatever rules they want approach that was ushered in on January 20, 2001. Those government guarantees had been around in some form or other for some seventy years. Institutional buyers depend on the good faith of sellers. Good faith has not been a concept that the Bush administration has really cared to pay much attention to.

Quote:
Originally Posted by Niners fan View Post
I can't give you an firm answer about how much shielding is too much. I would never expect government to bail me out or set policy based on poor decisions that I make.
I suspect that you would. Unless of course your view is that Katrina, rather than having been an example of its miserable failure, was an example of the government's going way too far in seeking to bail out those who had made poor decisions.
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Old 09-28-2008, 01:52 PM
 
Location: Boise, ID
1,356 posts, read 5,331,504 times
Reputation: 890
Wow. I guess I really hit a nerve with Saganista. Maybe I am not the only one investing emotion as well as effort?

Please don't take my lack of specific responses to your 19 posts against mine to mean that I am out of responses. There is much hyperbole and misrepresentation of my views in your posts but I am not really interested in getting sucked into a frenzied debate on a dozen different fronts. We all have our biases, but you have so much anger towards Bush it is sad.

I generally believe that America is a great nation of good people (I hope this mild display of patriotism is not offensive), that moderately regulated markets work and the government is more often part of the problem than the solution. It is obvious to me that you and I are approaching this debate from different sets of values.
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Old 09-28-2008, 05:19 PM
 
19,183 posts, read 27,763,990 times
Reputation: 4000
Quote:
Originally Posted by Niners fan View Post
Wow. I guess I really hit a nerve with Saganista. Maybe I am not the only one investing emotion as well as effort?
No, not a nerve...just the usual preference for seeing the facts elevated above the propaganda, which was all the Peter Coy blog-post in particular amounted to.

Quote:
Originally Posted by Niners fan View Post
Please don't take my lack of specific responses to your 19 posts against mine to mean that I am out of responses.
The count may be biased, in that, out of consideration for C-D servers, I recently chose to respond to your single 600+ word post in three parts.

Quote:
Originally Posted by Niners fan View Post
There is much hyperbole and misrepresentation of my views in your posts but I am not really interested in getting sucked into a frenzied debate on a dozen different fronts.
Well, the forum title is Great Debates. Otherwise, hyperbole is a legitimate device of illustration, though I don't think I used it all that often, and your views were typically represented in reproducing the words they were first established by.

Quote:
Originally Posted by Niners fan View Post
We all have our biases, but you have so much anger towards Bush it is sad.
I agree. My anger (more disgust, really) is of course proportional to the number of Bush's disastrous missteps, some purposely taken, and like most Americans, I certainly do wish there had been many fewer of those.

Quote:
Originally Posted by Niners fan View Post
I generally believe that America is a great nation of good people (I hope this mild display of patriotism is not offensive), that moderately regulated markets work and the government is more often part of the problem than the solution.
I generally believe that America is a great nation of some good people, some bad people, and some who fall somewhere in between. Most people do try hard from what I observe. If only more were headed in the right direction, we might be better off for all this effort. I believe that markets are a marvelous device, and that they can work very well when appropriately regulated, that degree of regulation varying on something of a case by case basis. Recognizing that government is an essential component of any society, I believe that investment in seeing that government does the best job that it can do in serving the needs of the people is worthwhile, and that knee-jerk anti-government stances are ill-advised and typicaly ill-informed. This impression is frequently reinforced in C-D upon seeing the lengths of fabrication that some anti-government types need to go to in seeking to defend their posts.

Quote:
Originally Posted by Niners fan View Post
It is obvious to me that you and I are approaching this debate from different sets of values.
That may well be. But again, part of the purpose of debate and of this forum is to bring together different points of view and different sets of values. I don't expect to resolve every issue here...just to present the facts that lead me to my views and see what interesting things others might have to say on the matter. You've at least said some interesting things...
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Old 09-28-2008, 06:51 PM
 
Location: Boise, ID
1,356 posts, read 5,331,504 times
Reputation: 890
Quote:
Originally Posted by saganista View Post
But again, part of the purpose of debate and of this forum is to bring together different points of view and different sets of values. I don't expect to resolve every issue here...just to present the facts that lead me to my views and see what interesting things others might have to say on the matter. You've at least said some interesting things...
I'll just address this portion of your response and let our previous arguments speak for themselves.

I appreciate a great debate. I appreciate others' viewpoints that cause me to articulate mine and examine their validity. I am certainly not above modifying my views. I realize that a 600+ word post might be responded to in several segments as there are likely several ideas presented. What I don't get into is refuting a post line by line. That approach often misses the context of the viewpoint as a whole and frequently comes off as nitpicking.

Your posts are always well-reasoned and very well-written. I respect your views though I generally disagree with them. I suppose I could take your aggressive responses to me as a compliment given that it may show you consider them worth responding to so thoroughly.
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Old 09-28-2008, 10:20 PM
 
Location: The Netherlands
8,567 posts, read 14,530,735 times
Reputation: 1573
Originally Posted by aus10
Quote:
Well... but in that same line, wasn't it the economy that made irrational thinking possible.
No, being afraid (read: being irrational) has to do with being mortal and has nothing to do with an economy.
Quote:
What is rational about someone making $21,000 per year thinking they could go 800,000.00 dollars in debt?
The reason why people are able to end up with a huge debt is because there are people (those who give these kinda loans) who believe they can profit from it.
Only those who dare win, right?
It sure is true that there are only a few people who can profit from a whole nation ending in a huge debt, but the nation itself will not profit from it.
So the rationalisation is (and always has been) the chance to make a profit.
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Old 09-29-2008, 08:44 AM
 
19,183 posts, read 27,763,990 times
Reputation: 4000
Quote:
Originally Posted by Niners fan View Post
I suppose I could take your aggressive responses to me as a compliment given that it may show you consider them worth responding to so thoroughly.
Well, that's what I would do. I put up a lot of on-the-other-hand posts that I try in most cases to both explain and document. I don't necessarily mean to convince people of what I'm saying...but usually there would be some suggestion to at least recognize and deal with it in one way or another. Some do that, some don't...
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Old 09-30-2008, 12:36 PM
 
Location: Barrington
42,006 posts, read 31,800,634 times
Reputation: 14109
Quote:
Originally Posted by saganista View Post

It is discouraging to see so many so completely misunderstand where we are and how we got here. We are either at or rapidly approaching the point at which none of anyone's philosophical niceties are going matter one iota. We need to keep the boat from going over the falls. We can sort out all the rest of it once we're in calmer waters.
Well put. I do not think we all quite get that we are in this boat, together and always have been.
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