September 17, 2008

Thomas Frank wants a class war.

You know, Thomas Frank -- of "What's the Matter With Kansas?" -- has a weekly Wall Street Journal column. Today's piece has a great title: "Get Your Class War On." So let's read!
Now comes the fall culture-war offensive, catching the Democrats by surprise as it always does and spreading panic and desperation among their ranks. As the depth of the Republican breakthrough becomes apparent to Democrats, they launch the same feeble counterattacks that failed them last time, prudishly correcting misleading GOP advertisements and crying for the recess monitor when the other side plays dirty.
Painfully apt.
Things would go better for Democrats if they recognized the culture war for what it is: a debased form of class war, a false populism in which an "authentic" America rises up against its would-be masters, an effete bunch of arugula-eaters who say "Happy Holidays" instead of "Merry Christmas."...

Since the 1970s, and with only a few exceptions, the Democratic response to this endlessly recurring attack has been to regard it as something beneath contempt -- which only reinforces the persecution fantasies at the heart of the culture-war myth. Take GOP vice-presidential pick Sarah Palin, for example, the flag bearer for this year's fall offensive. Like every other culture warrior before her, Mrs. Palin presents herself as a person looked down on and sneered at by the high and the mighty, defined as the liberal elite. Look down on or sneer at Mrs. Palin and you have merely reinforced the story, offered an illustration of what the lady is talking about.
That's an effective dynamic. Attack her and you promote her.

Frank goes on to say the Democrats should wage a "class war" by blaming Republican ideology for the current economic "catastrophe."
There is simply no way to blame this disaster, as Republicans used to do, on labor unions or over-regulation.
Oh, of course, there's a way.

113 comments:

Derek Kite said...

I heard this guy on CBC radio the other day.

Essentially, his message is that if the americans weren't so stupid, they would vote democrat.

He can't help it. He thinks he (and like minded ones) are superior. Like, how can you not be a bit condescending?

AUTHENTICITY!

Derek

John Lynch said...

Insightful, . . . and clueless. How does he do that?!

Paco Wové said...

I wonder why he felt it necessary to call it false populism. What would "real" populism look like?

Rich B said...

Ann-

Are you buying his stuff?

Bissage said...

And I, for one, welcome our new Marxist overlords.

Zeb Quinn said...

Actually, Rush Limbaugh laid out a pretty good case yesterday for blaming it all on the Democrats.

Palladian said...

"What would "real" populism look like?"

Democratic victory, of course. Leftys are the real majority, they like to tell us.

Anonymous Blogger said...

Oh, of course, there's a way.

Yes, but it won't make any sense. Labor unions lack the power they once did in great part because of McCain's unconstitutional campaign fiannce reform legislation. Deregulation and lack of regulation of private equity markets, oil speculators, hedge funds, and white collar criminals is obviously problematic to anyone affected by the mortgage crisis or shocked by the fall of a 158-year old investment bank. This is not the year to get away with blaming unions or excessive regulation, and even McCain knows it. That's why he's aping everything Obama says and running away from his actual record. If he keeps doing it, Obama's going to have to raise Keating-Five. Because that's what the current circumstances are like.

chickenlittle said...

I blame current economic woes on a Vegas-style, something for nothing baby mentality.

Dems brought us Las Vegas didn't they?

Roger J. said...

I think there is more than enough blame to go around with the on-going financial market bail outs. This is, IMO, a terrible policy; but these precedents were set during the new deal and pursued by both republicans and democrats. Moreover, the feds don't seem to have any specific legal authority that I can see, and they apparently have no set of rules--why AIG but not Lehman? Where is John Galt when you really need him.

Mortimer Brezny said...

Keating Five. Ouch. That's harsh.

Mortimer Brezny said...

Moreover, the feds don't seem to have any specific legal authority that I can see, and they apparently have no set of rules--why AIG but not Lehman?

They do. It's just broad authority to discount any notes at will. The Feds have totally unreviewable discretion. That IS the law.

Arturius said...

There is simply no way to blame this disaster, as Republicans used to do, on labor unions or over-regulation.

Of course not. The current disaster is a direct result of letting the free market roam free which has been the GOP staple for decades. While strict regulation will stifle growth, there is something to be said for stability. What the free-market folks need to understand is that you can't have an un-regulated free market and then have the market come running to the Fed with hat in hand when they demonstrate that they're incompetent in running a business.

What is needed is tight regulatory controls which will keep in check the stupidity and greed of both corporations as well as the idiot consumer who thinks they can afford a $500,000 home on a $40,000/year salary.

Harsh Pencil said...

Thomas Frank: Hmm. Isn't he the guy who wrote
"What's wrong with Connecticut?" about how
rich left wingers stupidly vote against their economic
interests because they get bamboozled by Democrats over social issues such as gun control, gay marriage, abortion (all which they are for) but are really just a smokescreen?

Original Mike said...

Thomas Frank has always called for class warfare. It's what he does.

Palladian said...

The Feds, we have learned, can do what they want. If it's not "legal" they can make it legal. They are the authority.

Brent said...

Thomas Frank would be far more effective if he didn't actually look down on values voters while talking about looking down on others.

His premise is actually the difference between "values" voters and "self-interest" voters.

Values voters believe that voting someone into office with the right character and moral/social/security values will lead, with imperfections, to the continued promise of America's freedoms and resulting opportunties.

Self-Interest Voters believe uppermost in voting their immediate financial/moral interest, with the hope that America's standing and security will remain strong as a secondary point. Normally, liberals would call this "greed"

A recent study asked conservatives to get inside the heads of liberals in attitude. It was wildly successful in outcome: conservatives easily understood the opposing viewpoints while disagreeing with those same viewpoints.

When the Study's subjects were reversed however, a disaster: Liberals - almost without exception - couldn't empathize with or even fully verbalize conservative viewpoints. They just couldn't "get it"

What's the Matter with Liberals?

Palladian said...

"What the free-market folks need to understand is that you can't have an un-regulated free market"

We don't and never did have an "un-regulated" free market. It's precisely the betrayal of the principles of free markets by Republicans and Democrats (natch) that we're having these problems. What part of quasi-governmental don't you understand?

Fatmouse said...

"weekly Wall Street Journal column"

WEEKLY?

Jesus, I used to respect the WSJ. Is there a single paper left not infected with the delusional?

Skyler said...

I guess pointing out the shortcomings of a political opponent is "playing dirty" and not simply exposing them for what they are.

Roger J. said...

The feds giveth, the feds taketh away--blessed be the name of the Feds. That is most definitely not what I want. At least I will be expecting a dividend check from all of my investments in the financial sector--do they pay quarterly?

Triangle Man said...

McCain's rhetoric has become so "populist" that, at times, he sounded like an honest-to-goodness Communist on the Today Show. Blaming CEO's, corporations, greed, and excess for the current financial problems is not something I expect (or want) from a Republican candidate.

rhhardin said...

You can't cheat an honest man works because the honest man isn't interested in something for nothing, not because the honest man is exceptionally shrewd.

Peter V. Bella said...

Barack Obama is beginning to do just that, but he must keep hammering at the point until everyone in America understands the choice that lies before us.

Let’s see, a man with no experience, no qualifications, and a bunch of ideas from college texts, ideological party pamhlets, and community organizations is going to save the world.

Simon said...

Frank writes...
"Palin presents herself as a person looked down on and sneered at by the high and the mighty, defined as the liberal elite."

Umm... Has Tom been living in a bubble these last three weeks? She is and has been looked down on, sneered at, and indeed slimed by, the high and mighty liberal elite. It's the second coming of Andrew Jackson - Sarah "New Hickory" Palin.

rhhardin said...

The WSJ has gone more lifestyle in an effort to interest women.

However the column probably replaces Al Hunt, their former lefty columnist.

``Al Hunt writes columns over at the Wall Street Journal that make you want to kill yourself,'' as Imus put it one day long ago.

Henry said...

The closest Frank gets to pinning the tail on the elephant is to blame the financial crisis on "the waves of deregulation, the takeover of government itself by business interests."

So I did a little googling on mortgage deregulation and came up with this progressive viewpoint: Wall Street Crisis Is Culmination of 28 Years of Deregulation.

Yup, sounds like Frank is right. Until you get to this graf:

With Congress eager to expand home-ownership, regulators felt pressure to deal lightly with mortgage loans to low-income households, and virtually no one proposed national regulation of non-bank lenders or mortgage brokers.

Had regulators questioned sub-prime lending, they would have been harshly criticized, said Edward Kane, a professor of finance at Boston College.

"Imagine what congressional committees would have said," Kane said. "They would have asked about affordable housing. It was a no-win situation for regulators..."


Hmmm. Who are these "regulators" the article talks about and how did Congress have so much influence on them? I thought the market was deregulated.

* * *

The irony of Frank's class warfare rhetoric is that it is on the coasts that the housing bubble has blown up the most.

Those dumb redstaters in the middle of the country are still happily paying off their big houses on their big lots in their unbubbled suburbias.

Roger J. said...

Simon--thats a pretty good analogy--hadnt thought about it. Would be great if Palin opened the white house to all those alaskans like Andy Jackson did.

Roger J. said...

Triangle Man: agree entirely, and its only because the alternative is worse, will I vote for McCain-Palin (emphasis on the latter)

Kirby Olson said...

Liberals have a silly sense that what goes on in shows like Charlie Gibson's or in academia are where the real intellectual activity in the nation is at.

It's not.

It's in the houses of worship. The pastors know dozens of languages and they know the history of the west, and often the history of other areas much better than the paltry knowledge academics possess.

Plus pastors keep their "students" for life, while colleges have kids at their most anti-intellectual and hedonistic, and only for a few years.

The pastors will eat the lunch of the academics every day of the week and twice on Sunday.

Not only are they deeper and more literate, but they actually have something to say that won't eventuate in Prozac.

Amanda Marcotte is the outcome of the colleges.

Who wants to end up like that?

I'd rather be Sarah Palin any day of the week and twice on Sunday.

The religious traditions of the country are mostly for the Republicans because the Republicans are much deeper.

It's just the young who are fooled by the Democrats. Obama can have those votes.

The media and the colleges can't hold a candle to the deep beautiful light of our churches and synagogues.

Oxbay said...

Thomas Frank offers a classic illustration of the real class war in America. There's them that have it and them that don't. Mr. Frank is sadly lacking even a little.

Peter V. Bella said...

as well as the idiot consumer who thinks they can afford a $500,000 home on a $40,000/year salary.

Those poor people were not idiots. They were VICTIMS, led down the golden path of home ownership as a God given right by glib real estate brokers and fast talking loan officers. They are VICTIMS. Their lawyers never read the contracts they signed either. VICTIMS.

Ask them, they will tel you. Ask the Democrats, they will tell you. We now have a new class of VICTIMS. VICTIMS their own stupidity.

bill said...

From the punk box stored in the 80s attic, it's the band Fear and their song "Let's Have a War."

Let's have a war.
Jack up the Dow Jones.
Let's have a war.
It can start in New Jersey.
Let's have a war.
Blame it on the middle class.
Let's have a war.
We're like rats in a cage.

There's so many of us.
There's so many of us.
There's so many of us.
There's so many of us.
There's so many of us.

Let's have a war.
Sell the rights to the networks.
Let's have a war.
General Motors'll get fat like last time.
Let's have a war.
Give guns to the queers.
Let's have a war.
The enemy's within.
Let's have a war.

It already started in the city.
It'd be just as easy.

Arturius said...

We don't and never did have an "un-regulated" free market. It's precisely the betrayal of the principles of free markets by Republicans and Democrats (natch) that we're having these problems. What part of quasi-governmental don't you understand?

Bear Stearnes and AIG are not quasi-governmental although with the most recent AIG bailout and the Fed now having a controlling interest in the company, I suppose they now fall under that definition.

I think the current economic straits we're in are due to seeing what happens when a free market is not properly regulated. Simply put, the regulators were out to lunch when the only requirement for giving out mortgage loans was a pulse. If there were any betrayal of the principles as you refer was the complete lack of oversight IMHO.

Bushman of the Kohlrabi said...

Mr Frank is somewhat confused. Mrs Palin never presented herself as someone looked down upon. It's the elite media that has looked down on her since she joined the campaign. I think she has carried herself rather well despite the personal attacks on her famiily. If anything, it just the same old "democrats smart" "republicans stupid" meme the media trots out every election cycle.

Sloanasaurus said...

As a reader of the WSJ every morning on the way to work, I enjoy skipping over Frank's column once a week.

Balfegor said...

What the free-market folks need to understand is that you can't have an un-regulated free market and then have the market come running to the Fed with hat in hand when they demonstrate that they're incompetent in running a business.

And yet . . . look at who's been failing. Bear Stearns. Lehman. Morgan Stanley. AIG.

Investment banks and an insurance company. And a few commercial banks. Oh, and Fannie and Freddie.

These are not unregulated entities in any way shape or form. On the contrary, these are some of the most heavily regulated enterprises in the entire United States.

If we were seeing unregulated entities fail, what we'd be looking at is a string of hedge funds going bust and blowing up the market. Which is exactly what people thought the next crisis was going to be, and exactly what we're not seeing.

Yet.

Balfegor said...

No sorry, that was Merrill, not Morgan. Whoops.

Simon said...

Roger, I floated it yesterday: "Every day, looking at the hysteria on the left about Palin, my conviction strengthens that the most apt analog for this election is 1828: the visceral reaction of a horrified elite to the realization that no matter how much scorn they might pour out, or how loudly, their time was up. They had lost. Old Hickory was coming to Washington. And so is Sarah."

save_the_rustbelt said...

The Democrat campaign approach.

You (the blue collar middle class values voters) are stupid and misguided, but please vote for us and we will give you utopia via our brilliance.

Didn't work out so well for Gore or Kerry, huh?

Arturius said...

These are not unregulated entities in any way shape or form. On the contrary, these are some of the most heavily regulated enterprises in the entire United States.

Clearly not regulated enough considering 3 of the 5 largest investment banks in the US have collapsed and now the largest insurer in the world needs a Federal handout. Certainly you would agree that these failures were hardly the result of over-regulation?

And my point wasn't that we have an un-regulated free market but rather that a segment of the population thinks de-regulation is the way to go whereas current events suggest otherwise. Perhaps if enforced due diligence on the part of Lehman and others was required, they wouldn't have saddled themselves with mountains of bad mortgages.

TMink said...

In general, Liberals are psychologically unspohisticated. They talk a good game, but the project like CRAZY! Take any accusation they make against someone else, you can be sure they are guilty of it. Bank it.

And so it is here: "Things would go better for Democrats if they recognized the culture war for what it is: a debased form of class war"

Here the projection is that the Republicans have been engaging in class warfare when the Democrats have had a Robin(g) Hood mentality toward the wealthy since before (and with the exception of) Kennedy!

Senator Obama's wife has even told America to expect wealth distribution if her husband get's elected.

My theory is that growing up in single parent households the liberals suffer from brain damage. It has to do with the prefrontal orbital cortex.

So when a liberal accuses someone else, you know that they are really talking about themselves.

Trey

Sloanasaurus said...

I am waiting for Obama to come out and say that under an Obama administration he will wave his magic wand and my 401k will rise. Then I will switch my vote.

His current plan, however, to raise taxes on all the companies getting crushed by the market, seems a bit foolish doesn't it?

Dust Bunny Queen said...

Government intervention in banking and mortgage lending is a big part of the problem. Beginning with Carter and the Community Reinvestment Act whereby banks were forced to lend in areas where the borrowers were just unqualified. Forced to make bad loans. Next the erosion of Glass-Steagall by the Clinton Administration, which removed the barriers between conventional banking and their depositors and the investment banking side of the business leads directly to the fall of giants like Lehman.

The lack of regulation over mortgage brokers and the sheer stupidity and greed of the borrower. The mortgage broker pushing ARMs on people who should never have qualified. The greed of the borrower and speculators in the housing market. All fueled the current melt down.

As one poster already said. The "common" guy living outside of the liberal enclaves isn't generally hurt by the mortgage credit crisis because they/we wisely live within our means and buy homes to live in, not to leverage.

Remember the silent majority? Guess what. They now feel that they finally have a voice in Sarah Palin. The Democrats should be shaking in their boots.

Sloanasaurus said...

Obama's economic plan:

Kick those rich bastards while they are down!

Balfegor said...

Clearly not regulated enough

It's not clear to me that if 3/5 largest and most heavily regulated investment banks in the country fail, the solution is more regulation. They had regulation up the wazoo. it failed to work. Better regulation, sure. In hindsight, we can tell exactly what kind of regulation would have worked.

But what are the chances that regulators working two, five, ten years ago could have foreseen what happened and could have prevented this?

About as good, I'd venture, as the chances that the risk management people in these companies. Which, obviously, didn't catch the problem.

MadisonMan said...

I can't say I'm thrilled that the Feds are ponying up more billions to cover up for the bad choices of former executives who have steered the ship onto the shoals of bankrutpcy. Very few good options. I'm sure former AIG CEO Martin Sullivan who got a $47M buyout when he "resigned" in July laughed while he cashed that check a long time ago. I take solace that his stock options are now worthless.

And this on top of $8bn to the Highway fund. And the billions and billions to Iraq. And the billions and billions to Medicare.

Where does the Govt find all this money lying around? Oh yeah, in my grandchildren's piggy banks.

Peter V. Bella said...

Balfegor,

Tell that to the Left. All they see is a giant conspiracy theory.

John Lynch said...

(nto John Lynch)

Arturius, others on the regulation over/under discussion:

http://online.wsj.com/article/SB121677050160675397.html

The link is relevant to the discussion. Regulation harms innovation and allocation of resources (investments, personnel, goods and services.) Sometimes regulation is necessary to curb a particular effect, usually a hidden cost, for example environmental issues.

I think in the case of the recent failures, the case is not one of over/under regulation, but a particularly egregious regulation, intentionally distorting allocation of resources (credit) and failing to properly monitor risks. In this case the regulation actually forced lenders to put aside credit standards, and when proper legislation was proposed for monitoring risks, it was opposed.

The bundled loans were then gobbled up by investment houses and AIG (as a part of their portfolio) and later found to be less than top quality. What a surprise! Most of these policies were put in place during the 90s, some in the 80s.

Take it where you will from a partisan perspective, but this looks to me like socialism and corrupt politicians who personally benefited. But Pelosi's revisionist investigations will soon brush away those tracks and create new ones for us all to learn from.

Simon said...

MM, I agree - it's one thing to bail out Fannie & Freddie. There's a good argument why that had to be done although I can't say I like it one bit. I'm still not sure that I understand why AIG is in the same class, although that might just be my own ignorance. Why is failure a dirty word? I guess that the best justification for it is that with an economy that is jittery, there's a fear that AIG failing would tip us over into recession, making this more of a symbolic move than a practical one. Not sure that that makes it better, though.

Sloanasaurus said...

I'm thrilled that the Feds are ponying up more billions to cover up for the bad choices of former executives who have steered the ship onto the shoals of bankrutpcy. Very few good options. I'm sure former AIG CEO Martin

Your lack of knowledge about this issue shows.

AIG didn't make stupid investments. However, the market believes that it did, so they refuse to lend AIG money out of fear. This excessive fear will lead to AIG defaulting on its debts, much of which are loans to money market funds held by individuals. So the stupid idiots in all this are small investors.

The AIG scenario is the classic "run on the bank."

Yes, its ultimately AIG's fault for not guarding against this fear and being able to explain its balance sheet, however, at some point there is nothing you can do about the fear as it feeds on itself. The Fed rightly stepped in this time.

Simon said...

Arturius said...
"'These are not unregulated entities in any way shape or form ... [but rather] some of the most heavily regulated enterprises in the entire United States[?]' Clearly not regulated enough...."

And there it is, folks, clear as day: the other side's world view, encapsulated. If it failed, that is proof that it wasn't regulated enough.

Paul Zrimsek said...

Axiom: Regulation prevents financial crises.
Observation: A financial crisis is occurring.
Conclusion: There must not be any regulation.

VariableSpin said...

"Clearly not regulated enough considering 3 of the 5 largest investment banks in the US have collapsed..."

Clearly a logical fallacy that statement. Perhaps they were encouraged to make unsound business decisions precisely because of the regulations that they encountered.

Sloanasaurus said...

I guess that the best justification for it is that with an economy that is jittery, there's a fear that AIG failing would tip us over into recession, making this more of a symbolic move than a practical one. Not sure that that makes it better, though.

The government is trying to stem the excessive fear and pessimism that is leaking into the market. Their liquidity to AIG isn't much different than the $85 billion being offered to banks from the discount window, except since banks are refusing to on-lend money they are getting from the discount window, the fed is doing it for them.

Most likely the government will profit in the end from their takeover of AIG.

Peter V. Bella said...

Perhaps if enforced due diligence on the part of Lehman and others was required, they wouldn't have saddled themselves with mountains of bad mortgages.

Perhaps if forced due diligence on the part of:

Home buyers was required, they would not try to buy a more expensive home than they could afford.

Realtors was required they would not try to sell people homes that cannot afford.

Lawyers was required they would actually read mortgage documents and kill the deals.

Mortgage brokers was required they would not seek mortgages for people who do not qualify.

Consumers was required they would not be saddled with five figure credit card debt and mortgages they cannot pay off.

Credit Card companies was required they would not issue credit cards and keep bumping up credit limits on people with so much debt.

MadisonMan said...

sloan, if you're going to quote me, kindly keep the meaning of my statements intact.

chickenlittle said...

@bill

Let's not forget the "Circle Jerks":

In a sluggish economy
inflation,recession
hits the land of the free
standing in unemployment lines
blame the government for hard time

we just get by
however we can
we all gotta duck
when the shit hits the fan

10 kids in a cadillac
stand in lines for welfare checks
let's all leach off the state
gee!the money's really great!

soup lines
free loaves of bread
5lb blocks of cheese
bags of groceries
social security
has run out on you and me
we do whatever we can
gotta duck when the shit hits the fan

integrity said...
This comment has been removed by the author.
ricpic said...

Hey, wasn't it the Democrats who insisted that every poor put upon minority should have a house and you damn well better pony up those subprime loans mister mortgage man or the full righteous wrath of gummint will come down on your racisss head if you don't?! And now that the evil bankers have done the Dems bidding with the inevitable consequences they're blaming those same bankers for the consequences?

That's chutzpah worthy of admiration.

integrity said...

I have zero interest in a class war. I want to see the right-wingers and extraordinarily arrogant people like Ann and her kids get their comeuppance. Some friggin' hick that has been wrong about everything for at least the last 5 years is gonna tell me what to do and how to live. NEVER. NEVER. NEVER.

Just for kicks last night I went and read this blog from November, 2004. Comeuppance is gonna be so sweet.

You've dug your own right-wing graves. I hope there is not a job in sight when this is all over, due to deregulation and deregulation alone.

This is going to be the most fascinating year ever.

Keep up the Hillary '12 pipe dream. We are more determined than ever to make sure Hillary does not get elected. It will never happen. Ever.

Richard Dolan said...

There is a lot of foolish commentary about the subprime mortgage mess at the root of the current turmoil in the financial markets, most of it framed in terms of agenda-driven blame-games. Frank's piece is more of the same.

The key legislative changes (all designed to make the credit markets more rational and responsive to consumer needs) were adopted long ago -- in 1980 (the Depository Institutions Deregulation and Monetary Control Act), 1982 (the Alternative Mortgage Transaction Parity Act), 1986 (the Tax Reform Act), and 1997 (the changes to the capital gains rates, along with the adoption of an exemption for the first $500,000 in gains from the sale of a primary residence). Basically those statutes abrogated state-law based limits capping the allowable interest that a lender could charge on mortgage loans; allowed lenders to offer ARM and balloon-payment mortgages; gave mortgage interest favorable tax treatment compared to any other type of consumer interest payments; and gave very favorable tax treatment to the gain realized on the sale of a primary residence as compared to other assets. Prior to the enactment of the first two laws in 1980 and 1982, there was no sub-prime mortgage market, which meant that borrowers who could not qualify for a prime-rated loan were just unable to obtain a mortgage at all. The effect of the 1980 and 1982 laws was basically to remove legal barriers to risk-based pricing of mortgages. Mixed in with that was the uproar about "redlining," which had become a short-hand for denying mortgages to borrowers deemed undesirable risks based on where they lived (often minority communities). The changes in the tax laws gave a strong impetus to mortgate and home equity loans, as compared with other forms of financing.

In order for any risk-based pricing scheme to work, the seller has to have sufficient information about the nature and extent of the risks in order to efficiently price whatever is being sold, in this instance mortgage loans. In the mortgage business, that necessity was dealt with in three basic ways. First, lenders adopted elaborate rating schemes and underwriting standards to grade potential borrowers according to risk (A- to D). Second, when securitization of mortgage loans took off in the '90s, they had to be rated for risk, among other reasons to make them assets that could be held by insurers and others.

Securitized loans (securitized anythings) are saleable in a market only if there is some way efficiently to price them. Obviously sub-prime loans, by definition, carry greater risk of failure, and are especially at risk in a market characterized by falling house prices. Pricing thus was tied closely to how risks were rated. When market players loose confidence in the ratings agencies and underwriting criteria that are supposed to provide the information necessary to evaluate risk, pricing becomes much more difficult. The result is that the securities become unsaleable (illiquid), not that they become worthless.

The final regulatory piece that made all of this a perfect storm was a change to the accounting rules that financial firms are required to use. Previously, a firm was required to "price to market" only those securitized assets held for trading purposes; assets that were being held to maturity did not have to be priced to market. Now all such assets must be priced to market. The impact on a financial firm's balance sheet is enormous when (as has happened here) a firm like Lehman or AIG is holding huge amounts of securitized mortgages which become increasingly illiquid. Pretty soon, a balance sheet that looked robust is showing nothing but red ink.

All of these financial firms were highly leveraged, which just means that their capital was a small portion of their overall balance sheet equity. As securitized assets lost value, the miracle of leverage was working in reverse, and the firms had insufficient capital to make up the difference. All of a sudden (literally in a matter of days for Bear S and Lehman), robust balance sheets became instead a picture of insolvency (meaning debt exceeded assets, resulting in negative equity).

This is just a very rough sketch of what was going on, and leaves out a lot of the story. But it is enough to show that it's a complicated story, not amenable to any quick fix. The slightest familiarity with the details shows that it has nothing to do with Bush. Frank's rendering is just ridiculous, as is the blather one is likely to hear from the politicos this election season.

Whoever wins in Nov will need a strong team at Treasury to sort it out, while avoiding idiotic blame-games that will just make things worse (e.g., as the adoption of Sarbanes-Oxley did in response to Enron).

Peter V. Bella said...

why AIG is in the same class

AIG held the insurance against most of the failures, especially the mortgages. If they go down, the whole system goes with them. They are one of the largest, if not the largest insurer in the world.

Look at it this way. It is a simplistic example. Say there are multiple climatic catastrophes in one month; Hurricanes, earthquakes, massive floods, and tornadoes. What happens if State Farm, Geico, or Allstate cannot pay off all of those claims?

Dust Bunny Queen said...

AIG didn't make stupid investments. However, the market believes that it did, so they refuse to lend AIG money out of fear. This excessive fear will lead to AIG defaulting on its debts, much of which are loans to money market funds held by individuals. So the stupid idiots in all this are small investors.

Exactamundo. While I don't like the precedent that this sets, the Feds taking over private industry, can we all say Communism????, this isn't an 85b gift to AIG. The loan is a one year loan with interest at the LIBOR rate plus a bump. The loan is collateralized by the assets of AIG (hence the take over talk). This gives AIG time to restructure without going into Chapter 11 Bankrupcy like Lehman, which is still a somewhat viable entity and has a slight chance to emerge from BK. AIG is expected to sell some of its assets to repay the loan and the Fed holds the assets as collateral just in case.

Peter V. Bella said...

Hey, wasn't it the Democrats who insisted that every poor put upon minority should have a house and you damn well better pony up those subprime loans mister mortgage man or the full righteous wrath of gummint will come down on your racisss head if you don't...

They even passed a bill that was veto proof and Bush ahd to sign to guarantee it. It loosened the restrictions of the Freds- Mac and Mae.

George said...

May I have your attention, please?

The petty bickering has become a distraction.

As a result, at 12 p.m. noon tomorrow Eastern Standard Time all electric power generation around the world will cease for a period of 15 of your minutes.

If you do not believe me, ask Professor Zorba at the Institute of Large Numbers in your diamond-shaped national city. I left a message on his blackboard. It should still be there, unless his secretary erased it.

Don't worry about Bobby. He is fine. Gort is good with children.

Once again, cool it.

Your friend,
Mister "Carpenter"

Peter V. Bella said...

integrity said...
I have zero interest in a class war. I want to see the right-wingers and extraordinarily arrogant people like Ann and her kids get their comeuppance. Some friggin' hick that has been wrong about everything for at least the last 5 years is gonna tell me what to do and how to live. NEVER. NEVER. NEVER.

Um, Integrity, ah, that is class war. Sorry.

BTW, Bill Clinton was a “friggin hick”.

Dust Bunny Queen said...

Some friggin' hick that has been wrong about everything for at least the last 5 years is gonna tell me what to do and how to live. NEVER. NEVER. NEVER

It seems to me that it is the so called liberals and progressives who want to tell us what to do and how to live. Light bulbs, forcing sex education on our small children against our wishes, restricting food choices, forcing homosexual agendas in schools, using global warming to tell us where and how to live, what kind of cars we can drive, what temperatures to keep our homes......the list goes on and on and none of these proposals come from the so called lower class types like the rubes represented by Palin.

terrance said...

Whoever wins in Nov will need a strong team at Treasury to sort it out, while avoiding idiotic blame-games that will just make things worse (e.g., as the adoption of Sarbanes-Oxley did in response to Enron).

But Richard....as the Boss said in "Blinded by the Light"...."that's where all the fun is". I mean, blame games make the political blogosphere go round.

I am not an economist, and had a hard time following your post.....but you make it sound like the financial straits companies like Lehman and AIG found themselves in were just exaggerated mirror images of the highly leveraged status of their borrowers (i.e. the home buyer).

And I love the blame gamers like Palladian who blanketly assert that while we have never truely had an unregulated free market..... unregulated free markets would solve our economic woes...I mean, if we have never had a truely unfettered free market.....how does he/she "know" that an unregulated one would not lead to the same outcome, better outcomes, or worse outcomes. Since in my over half century of life we have never lived without regulation on free markets, I cannot say with any kind of certainty what kind of outcomes to expect...Like you, I suspect it depends on a number of forces....some of which would be unanticipated. In the meantime, the political/cultural/racial/economic "class war" climate, it seems to me....may be a particularly malignant one in which to raise and implement potentially effective solutions to our current economic dysfunction.

Arturius said...

The lack of regulation over mortgage brokers and the sheer stupidity and greed of the borrower. The mortgage broker pushing ARMs on people who should never have qualified. The greed of the borrower and speculators in the housing market. All fueled the current melt down.

This is pretty much the case and I agree.

It's not clear to me that if 3/5 largest and most heavily regulated investment banks in the country fail, the solution is more regulation. They had regulation up the wazoo. it failed to work. Better regulation, sure.

Perhaps the question is whether the regulators were doing their job from day one. It’s one thing to have regulations on the books and another as to whether or not they’re being enforced. It’s illegal to jaywalk in my city but it’s done all the time and no one is ever ticketed for it.

AIG didn't make stupid investments.

Their biggest problem right now is the credit default swaps, about $78 billion of them they were selling and then began defaulting on them when they were being called. And therein lies a big problem with that particular financial instrument. The joy of a CDS is that they are essentially an insurance instrument yet don’t fall under any insurance laws, thus, they don’t have any reserving requirements. In other words, you can write all the CDS you want and not be legally required to have a dime to back it up.

Perhaps if forced due diligence on the part of:

I don’t disagree. Both the consumer and the corporation are at fault here which is what happens when kindergarten recess doesn't have any adult supervision.

miller said...

Let me tell you about real estate "hicks."

I bought my house 15 years ago for about a third of what it's worth now.

I haven't sold it or made money on it yet.

However, my county government thinks that since it's worth 200% of what I paid for it, I should have taxes that are tripled.

My income has not gone up by 200%. I have enjoyed very modest raises over the last 15 years.

So now we have two jobs, one to pay the ordinary bills, and one to pay the property taxes.

Have I increased my support costs for the county? Do I consume 200% resources such as jails, roads, and social services?

No.

So, in spite of the fact that I bought my house with payments that were about 20% of my income, I now have payments that are closer to 40% of my income, including all the extra charges for government services.

Yeah. Thanks.

I am surrounded at work by people that reliably vote the Democrat Party ticket because of their concern for the "poor," but not a one of them owns a house. They rent, and think that rents going up is due to greed. So they gladly vote to increase my taxes because somehow I, a single-home owner, am "greedy" because I don't want the county government to get ever-increasing taxes from me. I resent working more and more for the government because they steal more and more from my family's budget.

Don't get me started about the county government who wants us all in high-rise apartments paying ever-increasing county taxes, but who themselves live in estate housing.

(The best was Seattle's mayor, who yesterday said that using plastic grocery bags "absolutely" caused Hurricane Ike to wipe out Galveston, TX. I am not making this up.)

These are the economic morons that decide my liberties, and they get miffy when I point out that they have no right to do so.

avwh said...

Can there ever be enough regulation to protect people from their own stupid decisions in a free society?

There's lots of complexity and blame to pass around on this one, as some of these posts illuminate.

But boiling it down to the underlying principle: either people are held accountable for their actions - which allows failure in a free market, or the government tries to be the all-powerful regulator and prevent people from suffering from their own mistakes. If the government "misses" regulating it in time, then it seems to feel an obligation to be the insurer and underwriter of last resort (unless you're Lehman, in which case you're the sole example of moral hazard still applying in this go-around, at least).

In the case of Freddie Mac & Fannie Mae, it seems they as GSEs tried to have it both ways: we'll privatize profits when we can make a LOT of money and pay ourselves extraordinarily well, and when we're unprofitable, we'll just socialize the risk & losses - "let's just put that on the government's tab". That's sort of a half-assed private/public entity, which from the taxpayer's perspective, might be the worst of both worlds.

PatCA said...

Is he an idiot or what?

"Since the 1970s, and with only a few exceptions, the Democratic response to this endlessly recurring attack has been to regard it as something beneath contempt."

That's because they actually do hold American people and values in contempt. So that's why they act that way, Frank.

Both the Bush Administration and McCain did try to re-regulate Freddie and Fannie Mac in the past five years and were defeated in Congress.

So, yeah, let's have a class war. The uber class will lose. That's you, Frank.

Bissage said...

Kudos to Richard Dolan at 10:13 and miller at 11:03.

Arturius said...

But boiling it down to the underlying principle: either people are held accountable for their actions - which allows failure in a free market, or the government tries to be the all-powerful regulator and prevent people from suffering from their own mistakes. If the government "misses" regulating it in time, then it seems to feel an obligation to be the insurer and underwriter of last resort

But the problem is that we sit on the fence of the free-market and governmental control. I for one simply don't trust either corporate America or the great unwashed to make sound decisions and as the current crisis shows, both are responsible. I'm perfectly content to watch John Dipshit lose his house because he bought more than he could afford. But when John Dipshit is joined by hundreds of thousands of more Dipshits and Dumbassess whose unwise decisions result in a collapsed nationwide housing market and failed financial institutions then it becomes my problem.

To say that no one could see this coming has to be living in the Valley of the Blind and I am the one eyed man. There was a time when you actually had to demonstrate credit worthiness and show an income to buy a home plus put down at least 20% to prove to the bank you were really serious about owning a home. And then they'd only loan you an amount based upon your ability to pay. Which means you couldn't buy a McMansion on a McDonald's salary.

Arturius said...

Both the Bush Administration and McCain did try to re-regulate Freddie and Fannie Mac in the past five years and were defeated in Congress.

That's not a winning argument for Bush since the GOP have dominated Congress through 3 1/2 of the last five years and have pretty much rubber stamped everything he wanted from the Medicare Part D or the Iraq war.

chickenlittle said...

@DBQ:

I believe you've stated why Palin is such a threat to the left and must be destroyed at all costs. She represents a bottom-up threat to the top-down approach.

former law student said...

With Congress eager to expand home-ownership, regulators felt pressure to deal lightly with mortgage loans to low-income households, and virtually no one proposed national regulation of non-bank lenders or mortgage brokers.

Hah! Government regulators were just girly-men, who wilt at the slightest "pressure" from Congress. They should have remembered the separation of powers.

Moreover, mortgage brokers are not lenders, but intermediaries (hence the name "broker"). Bank committees were supposed to review and approve each loan they granted.

The loan is collateralized by the assets of AIG

What assets?

due diligence on the part of:

Home buyers was required, they would not try to buy a more expensive home than they could afford.


People who sold homes every day for a living and people who made mortgages every day for a living told the home buyers that they could afford those homes. How were people buying the first home in their lives supposed to know better than the professionals?

Next the erosion of Glass-Steagall by the Clinton Administration

Do you mean the Gramm-Leach-Bliley Act? Because that bill was originated by Republicans, including McCain economics advisor Phil Gramm, passed the Senate on a party-line vote, including one John McCain. I admit that two-thirds of House Democrats voted for it, allowing it to pass. Campbell, Paul, and Tancredo were among the Republicans smart enough not to vote for it.

former law student said...

However, my county government thinks that since it's worth 200% of what I paid for it, I should have taxes that are tripled.

My income has not gone up by 200%. I have enjoyed very modest raises over the last 15 years.


I agree 100%. Property tax is the most regressive tax of all. Move to California, which strictly limits increases in property tax.

Bruce Hayden said...

The problem as I see it with class warfare is that the Democratic Party has become a party run by elites pretending to represent the small guy. So, you have John Edwards being taken seriously as he lives in his 20,000 square foot house on his farm across the street from a trailer park talking about the "Two Americas".

When was the last time that the Democrats ran a non-elite for president? Carter? Clinton? Surely not Gore, Kerry, or Obama. The party that was built to represent the poor and downtrodden no longer sends that type to Congress very often, nor runs them for president. Not surprisingly, a couple years ago a survey was taken of the Senate, and there were more Democratic millionaires there, and their combined net worth was significantly higher than their Republican colleagues. They have a Kennedy, a Rockefeller, etc. representing them there.

Sure, John McCain III married into money, though not quite as much as John Kerry did. And being the son and grandson of full Admirals did make him part of the military aristocracy.

But Sarah Palin did not. Her connection to unions isn't through her father (as is Bidens), or having known some union leaders (as is likely the case with Biden), but rather, she has belonged to a union, and her husband currently does.

Who better to understand middle America than someone who is a card carrying member of it? Someone who has to deal with two normal incomes supporting five kids, one with special needs, instead of on a half million dollars a year, while whining about the cost of good child care.

Class warfare doesn't work for the Democrats, esp. at the presidential level any more because while they can talk the talk, they can't walk the walk. They are elitists looking down on the peasantry that they are attempting to lead through envy, but keep getting in trouble when the reality of their elitism keeps coming out.

Bruce Hayden said...

Sorry, another typo:

But Sarah Palin did not. Her connection to unions isn't through her father (as is Biden's), or having known some union leaders (as is likely the case with Obama), but rather, she has belonged to a union, and her husband currently does.

F15C said...

This whole mess was brought on by Democrats stupidly pressing the idea of "affordable housing" far beyond the limits of economic sanity.

As reported in the NY Times, in September of 2003 the Bush administration said that Fannie and Freddie were "broken" and tried to improve the health of the two by focusing oversight in the Dept. of the Treasury instead of in Congress.

Of course, Democrats pushed back and Barney Frank disagreed with Bush saying:

"These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis" said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

"I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,'' Mr. Watt said."

Dust Bunny Queen said...

I agree 100%. Property tax is the most regressive tax of all. Move to California, which strictly limits increases in property tax.

Prop 13 FTW!!

F15C said...

"People who sold homes every day for a living and people who made mortgages every day for a living told the home buyers that they could afford those homes. How were people buying the first home in their lives supposed to know better than the professionals?"

Let me fix that for you:

"People who sold used cars every day for a living and people who made automobile loans every day for a living told the car buyers that they could afford those cars. How were people buying the first car in their lives supposed to know better than the professionals?"

chickenlittle said...

FLS said: Move to California, which strictly limits increases in property tax.

Plus housing in CA is getting more affordable every day.

F15C said...

"FLS said: Move to California, which strictly limits increases in property tax."

Speaking as a California native, believe me, they more than make up for the reasonable property tax rates with state income tax (amongst the highest five states), sales tax (second highest state), and taxing and fee'ing nearly everything that moves or doesn't move.

And the state still has $14B shortfall.

former law student said...

Sure, John McCain III married into money, though not quite as much as John Kerry did. And being the son and grandson of full Admirals did make him part of the military aristocracy.

Not only that. His mother's father Archibald Wright was loaded. After the family moved to LA, he became a stay-at-home dad. From an August Jonathan Weisman article in the Washington Post:

Arch Wright, who made a fortune on liquor, gambling and oil in Indian territory before relocating to Los Angeles with a sprawling clan in tow, including McCain's mother, Roberta Wright. He died there in 1971, when McCain was being held as a prisoner of war in North Vietnam.

former law student said...

f15, the advantage of income tax is that they can't tax you more than your income. You can minimize your sales taxes by being frugal. Nothing you can do can control your property tax.

Because he had to take on a second job just to keep the government from taking his house away, essentially Miller is running just as fast as he can just to stay in the same place.

PatCA said...

Bush's attempt to regulate FFMae occurred during a barely Republican (51-48) congress, yes. Dem Barney Frank spoke against reform: No problem here

McCain spoke out in 2005. The Dems killed the reform once more. Reform DOA. The largely Dem executives, however, did quite well, earning from $26 million to $100 million apiece while Rome slowly inevitably burned.

Revenant said...

Frank goes on to say the Democrats should wage a "class war" by blaming Republican ideology for the current economic "catastrophe."

The Democrats "should" be blaming Republicans?

Was this article written in 1859? Democrats have been blaming Republicans for everything that goes wrong with the country for my entire lifetime, and Republicans have done the same to Democrats.

Stinger Assassin said...

People of Earath or whatever it is you call it:

My message of 10:20 was not heard.

I was told by the Providers that althouse was the watering hole. Where the wise ones and also the lawgivers gather. Perhaps I have the wrong url. I don't know.

In any event, what I said about the electricity still goes.
It won't be pleasant. Especially if you are in an airplane.

My recommendation? Let the black man and the white man share. On weekends, the man who likes trains and the lady in high heels can take turns.

Bobby is still fine. We are watching iCarly. They are not paying me enough quatloos for this.

Sincerely,
Mister "Carpenter"

PS: If you act now to resolve your petty bickering, I will make sure that the new Keanu Reeves movie never sees the light of day.

Also, Gort says 'hi.'

Bruce Hayden said...

f15, the advantage of income tax is that they can't tax you more than your income. You can minimize your sales taxes by being frugal. Nothing you can do can control your property tax.

The problem with the income tax is the tendency to make it highly progressive, as it is now. Most people pay little income tax, and many pay none. This invariably leads to irresponsibility in both the taxpayers and the politicians trying to buy them.

Property taxes don't go up by magic. In many jurisdictions, they do so via property value inflation. The answer - borrow against all that new equity or trade down into a more affordable house.

Besides, where is all that additional money going? Governmental expenditures don't go up by magic either. Rather, someone has to vote to make that happen. Best thing to do there is to make your representatives at the various levels of government responsible. Don't vote for the candidates who have increased government employee pay or benefits or government programs.

And, as a last resort, you can vote in an amendment to your state constitution that limits government spending, as was done with TABOR in Colorado. There, when appraised values go up, assessment rates go down accordingly, limiting effective tax increases to close to the level of inflation (absent a vote of the people at the ballot box for tax increases).

Bruce Hayden said...

It is interesting that the infamous Jamie Gorelick, of the "Wall" and 9/11 Commission fame is involved here too, as a highly paid Vice Chair of FNMA (and represented Duke University in their recent scandal). How did someone with no financial experience (and who arguably had as much responsibility as any American for 9/11) get that job? It was obviously political, given her close Clinton ties and that she helped protect Bill from the 9/11 Commission.

The reality is that above and beyond the politics of marginal lending, these organizations were used as highly lucrative political patronage for well connected politicos.

Seven Machos said...
This comment has been removed by the author.
Seven Machos said...

Why are all the rich liberals voting against their own interests? Meanwhile, why are all the poor white trash toothless stupid people voting against their own interests?

And will Thomas Frank be a boring one-trick pony for the rest of his life, spouting that he just can't fathom the answer to what the poor hicks are thinking?

In any event, Tom, how about we go over to Yellow Sub in your Volvo and get venti skim carmel macchiatos with extra shots? You can read me some of your favorite passages from Das Kapital and we'll just agree to disagree.

Mitch said...

Where is John Galt when you really need him.
On strike

avwh said...

To say that no one could see this coming has to be living in the Valley of the Blind and I am the one eyed man. There was a time when you actually had to demonstrate credit worthiness and show an income to buy a home plus put down at least 20% to prove to the bank you were really serious about owning a home. And then they'd only loan you an amount based upon your ability to pay. Which means you couldn't buy a McMansion on a McDonald's salary.

I agree completely - this why any investment bank, commercial bank, or insurer in the chain was going to get burned eventually, b/c all underwriting standards went out the window, and this paper had little or no economic substance, as soon as the collateral stopped rising in value (which was only a matter of when, NOT if).

Balfegor said...

Re: FLS:

How were people buying the first home in their lives supposed to know better than the professionals?

Presumeably because the government makes the lenders put together that sheet with the crucial terms, like "does this loan have a demand feature?" "does this loan have a variable rate feature," etc. And, just like with rent, most people can probably tell whether they're going to be able to make those payments or not. If there's an adjustable rate, they're on clear notice that there's an adjustable rate. I just bought a condo so I actually have the paper right in front on me. When you go through the closing, you just have to be willing to ask them the stupid "what if" questions -- I suppose they might lie to you, but the forms are designed to make it hard for them to do so.

The professionals know what the professionals no, but when it comes to your own household budget -- what you're willing to pay, and what you're willing to forgo -- you know better than they do. People ought to make their decisions on that basis.

Now, people who are perfectly able to pay their mortgages, but have just seen their equity wiped out by falling prices because their foolish neighbours failed to read the papers carefully . . . I have some sympathy for them. And that's something that they couldn't have seen coming, at least in the specific (although in the abstract, people had been warning we were in a bubble). But still -- they weren't the trigger here. They're just the dominos that fall.

Revenant said...

People who sold homes every day for a living and people who made mortgages every day for a living told the home buyers that they could afford those homes. How were people buying the first home in their lives supposed to know better than the professionals?

There's exactly one person in the world who has day-to-day, 24/7, hands-on experience dealing with the question of what you can and can't afford. That person is you. You, not some banker, are the single best judge of what's affordable to you.

The simple truth of the matter is that almost all of these people knew they couldn't afford the house. They just didn't think they'd HAVE to afford the house; they thought house prices would keep going up and up and up, and they could refinance or flip the house and keep the money. In short, they gambled with borrowed money. They got greedy and it bit them on the ass.

Ralph said...

the Gramm-Leach-Bliley Act? Because that bill ..., passed the Senate on a party-line vote, including one John McCain
Not accurate, the final vote was 90-8. See Taranto

Steven said...

The problem here is that people like Thomas Frank don't apply the logic of the progressive income tax to economic policy in general, and thus miss the fact that everyone is actually voting their real selfish interest.

Just like a marginal tax rate of 90% would take a lot of money from Bill Gates or Warren Buffet but wouldn't actually reduce their lifestyles any, the wealth- and growth-destroying policies of the Democrats don't actually hurt the rich very much. As long as the Democrats deliver the social policies they like, the economic ones don't actually matter. The difference in actual comfort between a half-million dollars a year and five million a year is minimal, and between five million and fifty million is zero. Thus, for example, we see the senior people at the Lehman Bros. giving their campaign contributions overwhelmingly to Obama, or the leftism of Hollywood, and the like.

And just like an income tax rate of 5% really does impact the life of somebody making $30,000 a year, the growth-destroying policies of the Democrats really hurt the working class. When growth goes away, their jobs do, too. Therefore, they get maximum utility from voting Republican . . . unless the Republicans act like a pack of idiots like the '05-06 Congress.

At the very bottom of the pile, we find the non-working class, people who aren't affected by low economic growth because they aren't participating in the economy as anything but consumers. The voters in this segment actually tend to have similar social issue beliefs as the working class, like opposition to abortion and gay marriage. However, they allow themselves to be bought off with government-provided benefits.

Now, Frank sees that, and thinks you can buy off the working class by promising them benefits just like you can buy the non-workers. The trouble is, you can't, because you have to tax the workers to give them the benefits, and people are better at buying for their own desires than strangers are. You can partly overcome by padding it with "free" money from the rich . . . but not enough to overcome the inefficiencies of buying one-size-fits-all services in bulk for strangers.

Revenant said...

The difference in actual comfort between a half-million dollars a year and five million a year is minimal, and between five million and fifty million is zero

It isn't even necessarily half or five or fifty million; their income could be zero. They've got money in the bank already. Gates could live like a king for the rest of his life without earning so much as one penny in taxable income.

Stinger Assassin said...

Hey, People...People of Earth--

Is there someone who represents you, who can speak for all of you?

If there is, please take a look at my messages of 10:20 and 11:51, I think. I don't know, it's late, and Bobby, well, he was playing with the transmogrifier, and I'm afraid Gort has had to discipline him. He's being quite still now. Gort, too. I will work on his cellular revitalization. I have a lot of training in this. Just tell the lady to keep her Norwegian dickhead writer husband away from me. Off my back, Dahl.

In the meantime, you keep in mind that 12 p.m. deadline tomorrow. I'm looking for a little world peace here, people. If you have some surgery scheduled at that time, I would postpone. Especially if skull drilling is involved. I'm no kidding when I say there will be no electricity for 15 minutes. Battery backup? In your dreams. There's no negotiating about this.

Start being nice to each other, and give back that lady's electronic mails. You don't want to be taking no lady's mail.

Sincerely,
Mister "Carpenter"

Dust Bunny Queen said...

I'm no kidding when I say there will be no electricity for 15 minutes. Battery backup? In your dreams. There's no negotiating about this.

Well, I'm sure glad you told me this. I'll be sure to not be participating in a PvP event in World of Warcraft at that time. Nothing worse than losing power or experiencing extreme lag to make you die in a battleground. So frustrating

Thanks for the tip. :-)

former law student said...

the Gramm-Leach-Bliley Act? Because that bill ..., passed the Senate on a party-line vote, including one John McCain
Not accurate, the final vote was 90-8.


The final vote? The final vote was 1-0; Bush signed it.

What you're talking about is the conference report, where the house and senate versions of the bill are typically reconciled.

Put it this way: Had the Gramm-Leach-Bliley bill NOT passed the Senate on a party-line vote, including one John McCain, there would have been no conference report to vote on. I couldn't tell you why so many Democrats did not decide to fight on in a losing cause.

former law student said...

The simple truth of the matter is that almost all of these people knew they couldn't afford the house.

Things must have changed since we bought our house. We knew we could afford the house because the bank went over everything with a fine tooth comb before they OKed the loan.

First, we went to the bank to find out how much house we could buy. After we brought in our W-2s, bank statements, etc., and after the bank confirmed everything we asserted, and after the loan committee met, then we got our loan.

Revenant said...

What you're talking about is the conference report, where the house and senate versions of the bill are typically reconciled.

The conference report is the actual bill that gets signed into law. Democrats overwhelmingly supported it, just as they overwhelmingly supported the House version of the bill. The reason for the difference in support between the original Senate version and the final law is due to the fact that most of the things the Democrats disliked about the Senate version were removed in the conference committee.

As for the notion that Bush is to blame -- the bill passed with a veto-proof majority.

I couldn't tell you why so many Democrats did not decide to fight on in a losing cause.

Because they wanted the bill to pass.

Revenant said...

Things must have changed since we bought our house. We knew we could afford the house because the bank went over everything with a fine tooth comb before they OKed the loan.

Really? I knew I could afford my house because I sat down and figured out how much I could afford to pay.

Maybe you prefer to let other people -- people with less reason to care if you lose your house than you have -- figure that stuff out for you. If so, you deserve what you get.

Stinger Assassin said...

People--

Less than two-and-one-half hours left to stop the bickering. This financial problem you are having. It is so childish. In the world that I have come to you from we have surpassed that petty plane.

As for Bobby, he is better, especially with the cryonic suspension. A little problem with frost build-up, but not to worry as Gort has a scraper.

Anyway, two hours and twenty three minutes to that electricity event. Please move at least seven miles away from all petrochemical factories.

Wishing you global peace and membership in the alliance of planets, I remain sincerely,
"Mister" Carpenter.

Stinger Assassin said...

Earth People--

Fifty seven minutes.

Do you think it is an accident, all these financial problems you are having?

Better to talk with me than to have to deal with Gort.

Sincerely, your friend until noon,
"Mister" Carpenter

Steven said...

The final vote? The final vote was 1-0; Bush signed it.

Bzzzzt, wrong. In 1999, Bush wasn't even the Republican nominee, much less President. Bill Clinton signed it. You know, the Democrat?

If the Democrats had wanted to stop the bill, all they needed was for Clinton to veto it and 34 Senate Democrats to vote to sustain the veto. They didn't.

If the Democrats had disliked the conference version (that is, the actual bill that became a law) as much as they disliked the initial Senate version (the one that didn't become law), then the conference version would not be law today.

Stinger Assassin said...

Earthers--

Well, unless you are in central Africa where the power is presently out, you can tell that we have been having a little problem with the transmogrifier.

Gort found one of Bobby's Go-gurts in the crystal inverter.

Consider yourselves lucky as I have three other planets to visit today.

Farewell,
Mister "Carpenter"

PS: Gort will leave Bobby in the frozen foods dept. of the Whole Foods at 1436 Mass NW in DC.

viall said...

As a lifelong Dem, I really dislike Obama's lack of experience. Despite that, I am left with no alternative since McCain has moved right of even GWB. How idiotic. Now he says he will reform Wall Street and fire the bad CEO's and eliminate greed. Sure. That will no doubt happen when we win the war on terrorism or win in Iraq whichever comes first. The foolish nonsense posted here that says Freddie and Fannie were over-regulated is amazingly out of touch with reality. What we are witnessing is the unfettered marketplace that Laffer and Kudlow say will make us all rich. In the real World, it doesn't work and never has. Reagan's legacy was to pass along the largest deficit in history to George H. W. Bush who had to agree to increased taxes or we would have tested the limits of financial markets back then. Now along come Bush II and we're in deep do do again thanks to the flawed reasoning of the "market economy". Greenspan and Bush's easy money policies have once again destroyed the free markets they wished for. DUH!