McCain offers tougher critcism of Bush economics

Tuesday 14th October, 06:18 AM JST

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yabits at 09:27 PM JST - 14th October

Blaming a president without considering the wider environment they stood in at that time is like blaming the captain of the Titanic for the outcome of the final voyage.

Well, it's clear you've never served aboard a ship.

The truth is nothing they could do could change the fact that there is fundamental contradiction between capitalism and the nation state framework within which capitalist economies must develop.

Pure malarky.
Betzee at 09:55 PM JST - 14th October

Most sub-prime mortgages were written between 2004 and early 2007, after interest rates were allowed to remain low for too long (on that there is bipartisan consensus).

This enabled banks to raise interest rates later and buyers, who assumed the value of their property would continue to appreciate, felt they could absorb such increases down the road. Then the economy went bad, resulting in lay-offs and cut-backs, and many had trouble meeting existing payments, never mind one which rose precipitously.

Several communities over from where I live, farther from the water where land values are cheaper resulting in a lot of real estate development, they have 600 residential properties on the market, of which only 50 find buyers each month. This is the Republican part of the county and I will be interested to see the voting returns after they are made public.
Betzee at 10:20 PM JST - 14th October

Home ownership is very much a part of the American dream. It is of course subsidized by Uncle Sam who allows those with mortgages to deduct the interest payments from their taxes. George HW Bush, when he confronted the deficit run up during the Reagan years, wanted to rescind this policy in order to balance the books. His idea was met with a resounding "No," it was a middle class entitlement and nobody was going to give it up.

It's not surprising people strive toward home ownership. Local governments also want home owners, rather than renters who have much less stake in community welfare, to be the dominant majority. Now we're entering into a period where affected communities will have to cope with a lot of unoccupied properties.
Sarge at 10:29 PM JST - 14th October

yabits - Newsflash! Sarge does indeed know what he be talkin' about:

www.borderfirereport.net/alan-caruba/democrats-caused-the-financial-meltdown.html
HaroldSteptoe at 10:31 PM JST - 14th October

Gawd, the world is in chaos 'cos of America. i reckon both of the candidates are as bad as each other, oh yes a im pilitically very astute you know.

What choice have the Yanks got? A couple of merchant bankers, blimey great democracy eh!
Sarge at 10:34 PM JST - 14th October

"the world is in chaos 'cos of America"

Ha ha ha ha ha ha ha ha ha ha ha ha ha!
adaydream at 10:42 PM JST - 14th October

skipthesong - GSEs - Explain the acronym please. Trying to follow. < :-)
yabits at 11:47 PM JST - 14th October

adaydream: I interpreted GSE to mean "government-sponsored enterprise," of which Fannie Mae and Freddie Mac were two.

GSEs started in 1916 and have enjoyed bipartisan support ever since.
yabits at 11:56 PM JST - 14th October

Reference to Alan Caruba's article claiming "the Democrats did it," he refers to a 1999 decision by Fannie Mae to "ease credit to aid mortgage lending."

1999 was nearly ten years ago. Bush has been in power for nearly 8 of those 10 years -- with Republicans controlling Congress for most of that period. How was it that there was no leadership to press Fannie Mae to exercise better control? Had Bush and the Republicans acted to do so in 2002 or 2003 would the problem become as bad as it has?

No wonder John McCain is attacking Bush-o-nomics. The American people are not as stupid as some to believe that the Democrats are primarily to blame.
adaydream at 12:59 AM JST - 15th October

Thanks yabits.

When did the markets start packaging all these mortgages and selling them on the market in multi-million dollar packages? Investment vehicles that became nightmares.

I know that if a person had to refinance his home mortgage, it couldn't be done because the loan owner was a corporate enigma. < :-)
yabits at 02:28 AM JST - 15th October

adaydream: The instruments known as "swaps" did not come into being in the mortgage industry until 2001-2002. The model for credit swaps had always existed in the commodities markets, but they were deemed illegal for stocks and other financial instruments by a law passed in the early 80s, known as the Shad-Johnson Accord.

A law, authored by Republicans in both houses of Congress and signed by then-President Clinton in December of 2000, known as the Commodity Futures Modernization Act removed the restrictions of Shad-Johnson. Phil Gramm is considered to be the "brains" behind that bill.

"The housing bubble was the result of the Ponzi-scheme antics of those other financial entities: commercial banks, stockbrokers and hedge funds, which were allowed in a GOP-deregulated market to get into the 'swap' business. Through the rampant reselling of loans, the obligation to collect on a loan was divorced from the act of selling it in the first place, so who cared if the recipient of the loan was not at all qualified or the appraisal of the property value was inflated, as long as the paper was traded away, or insured, before the moment of foreclosure?"

http://www.thenation.com/doc/20080922/scheer
adaydream at 02:52 AM JST - 15th October

I became aware of "swaps" about a month or two ago. I was astonished at how Wall Street was allowed to purchase all these investment vehicles with no calateral at all.

And when they worked the "swaps" together with the Structured investments vehicles, it was the ton of debt by Wall Street that the market couldn't absorb or trust. < :-)

The below I posted on another article today.

From : http://en.wikipedia.org/wiki/Structuredinvestmentvehicles

In October 2007 the U.S. government announced that it would initiate (but not fund) a Super SIV bailout fund (see also Master Liquidity Enhancement Conduit). This plan was abandoned in December 2007. Instead, banks such as Citibank announced they would rescue the SIVs they had sponsored and would bring them onto the banks' balance sheets. On Feb. 11, 2008, Standard Chartered Bank reversed its pledge to support the Whistlejacket SIV. Deloitte & Touche announced that it had been appointed receiver for the failing fund. Orange County, California has $80 million invested in Whistlejacket.

It appears that this type of investment was created while Ronald Reagan was president. You remember Reaganomics and the trickle down effect?

What trickled down was this whole catastrophic investment systems that Main Street will have to bail out Wall Street from. < :-)
taniwha at 08:08 AM JST - 15th October

Harold Steptoe

i reckon both of the candidates are as bad as each other... What choice have the Yanks got?

True. Worse though is that the Democrats and Republicans are fundamentally representative of the same interests, the same financial elite that rule the US. Financial elites rule in all the major economic powers, and it is now that the financial system is in collapse that the reality has been rendered visible for all to see.

blimey great democracy eh!

If this is sarcasm then you are dead on the button, because the two party system is a fraud, in that it fronts just one group al be it two factions of that one group, and they represent the same interests.

There is an alternative, just one that is actually completely outside the influence of the ogliarchy in control of Washington. Jerry White is the presidential candidate for the Socialist Equality Party (SEP) in America. You won't see him appear often on mainstream media in the next two weeks at least, but Jerry is on Youtube in several video speeches.

SEP presidential candidate speaks on financial crisis

http://www.youtube.com/watch?v=iUtu0o8MSNk
skipthesong at 08:54 AM JST - 15th October

All this happened during seven years of Bush's watch,"

How long have you been buying houses, re-selling them or how many plots have you been involved in with new development?
LFRAgain at 12:42 PM JST - 16th October

Many make the mistake of assuming that economic interests are the sole factor in identifying political affiliation and were that wholly true, then yes, the Democratic Party and Republican Party do indeed look quite similar. But that’s only on the surface and that’s only with regard to economics. Social issues are by far the greatest single determining factor between members of the Republican Party, the Democratic Party, the Green Party, or virtually any other party out there, major or minor.

The Republican Party represents a constituency that tends to be more Christian, Caucasian, and wealthy. More to the point, the religious leanings of many Republicans helps shape Party representatives’ efforts to influence social policies ranging from abortion rights to stem cell research to gay marriage rights to teaching “Creationism” in public school classrooms to securing a legal right to private gun ownership for all Americans. “Traditional Family Values” was a long-time platform of the Republican Party, reflecting the will of a constituency that holds conservative views regarding the composition and deportment of an American family.

The Democrat Party, on the other hand, tends to represent more secular or “less” Christian constituents, minorities, and Americans possessing a comparatively smaller portion of the overall national wealth. The secular flavor of the Democratic Party guides policy initiatives that include ensuring the continued legality of abortion, the securing of the right to marry for homosexuals, greater support for stem cell research, a repudiation of “Creationism,” and a call for great restrictions on the private ownership of firearms.

In the cases of both parties, economics hold an important place in the minds of the constituency, however, a glance at the underlying motivations of either parties shows that Republicans often subscribe to the tenet that a person’s success (or failure) should depend almost exclusively on his or her own merits and efforts, and that this philosophy of individual perseverance contributes to the economic wealth of the nation. This might be best described as the “By Your Own Bootstraps” school of thought.

Conversely, Democrats lean more towards the idea that despite one’s merits or efforts, sometimes it is in the best interest of society as a whole to lend a helping hand to those not possessing the economic, social, or cultural advantages that help make the attainment of social and economic success easier. “Level The Playing Field” might be a good way to describe this philosophy.

In short, Republicans and Democrats are not the same. Not by a long shot.