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Is Clinton responsible for Fannie and Freddie? October 3, 2008

Posted by sliceof in American Politics, Economics.
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There is a claim running around Republican apologist circles that Cliton is respnosible for Fannie and Freddie’s fallout.  Here is the old NYTimes article going around:


The problem wasn’t that F&F were lending to poor people, it was that Fannie and Freddie and many others lent more to poor people than they could pay back with the hopes that they would be indebted for the rest of their lives.  It may seem appealing if you want to shift the blame to Clinton, but it is doesn’t explain away the real problems in the market.

The push by the federal government, supported by both Bush and Clinton, to expand Fannie and Freddie was to expand lending to lower income people.  The LENDING PRACTICES and the handling of debt were the problem.

Here is a bit from a non-partisan capitalist economics article.

“The proximate cause of current Housing situation (and eventual Credit crunch) stem primarily from 3 significant errors of the 2000:

1) Grenspan’s FOMC: Took Interest Rates taken to 1%, and kept their for over a year;

2) Banks and Mortgage Underwriters: Abdication traditional lending standards, and ignored the traditional principle that loans should only be made to those who can reasonably repay them;

3) Federal Reserve: Failed to adequately supervise banks; I consider this to be Greenspan’s Nonfeasance.

About the regulations which expanded F&F, done by BOTH Bush and Clinton, they say “While there is some merit to the argument that this movement impacted the housing market, it is for the most part significantly overstated, given what we now know about abdication of lending standards and the issuance of mortgages over the past 6 years.”

I am not blaming Bush and I am not absolving Democrats.  What I am saying is that the dominant Conservative Republican Ideology of refraining from regulating the market to allow it to grow quicker is flawed.  Regulations level out the economy.  With every windfall is a crash and we can level out the market to prevent such big spikes.

What could leaders have done differently?  Well instead of crafting legislation to spur growth in the economy in 2001, they could have left it alone.  The economy was in a natural cycle.   Perhaps lowering interest was helpful, however it was left low for too long and, In my opinion, left too low for political reasons.  It is not politically easy to add regulation to the market when it is steadily growing.

Why does most of the blame get assigned to the Republicans?

1. They were in charge of the House, Senate, and the White House until 2007.

2. Deregulation and less constraints on the market are an essential aspect of the Republican ideology.

I am primarily attacking the ideology.  This idea of putting regulation at the bottom (consumers and individuals) and removing regulations at the top is flawed.  I think it is remnant of Reganomics.  And while you may not agree, but the economic changes from Reagan era dominate the Republicans to this date.

There is a double speak with Republicans.  Republicans say less government, less spending, less taxes.  The Republican ideology is more government control at the executive level, excessive spending to the point the it nearly adds 50% to the defecit, and more taxes for the middle class while less for the richest in the country.


Sarah Palin doesn’t read for knowledge, she watches movies October 2, 2008

Posted by sliceof in American Politics.
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Here is a description of part of Katie Couric’s interview of Sarah Palin:

On a lighter note, Couric asked Palin how she liked to spend her free time, whether she read books?

“Oh sure, I have read a whole bunch,” said Palin.

‘What books have you read?” asked Couric, sensing an opening.

“Oh, y’know, different books … C.S, Lewis, he’s way, way deep. And I like Runners World, the magazine. I’m not into literature, the deep stuff. I’m so busy. If a book can’t grab my attention in the first paragraph, I have to put it down and do something else. I don’t read many books really, they’re not part of my life I guess. I’m not a book kinda gal. But I like movies.”

(You can click on the text to see the full article)

I don’t know what to say.  “I have read a whole bunch”  and “I don’t read many books really” are said in less then a minute of each other.   How do you reconcile that?

The first thing that comes to her mind when asked what she reads is:

1. C.S. Lewis- Author of childrens fantasy books and sci-fi with a Christian agenda and also Christian apologetics.

2. Runners world- A sports magazine aimed at runners and authors of such gems as “101 KICKS IN THE BUTT

3.Movies-Glorified television shows

The content of what Sarah Palin considers reading is severely lacking.  However, my the biggest problem isn’t just that content of her reading is lacking.

“Reading books” in Sarah Palin’s mind is not associated with research or facts or history or current events or KNOWLEDGE in general.  “Reading books” to Sarah Palin is associated with fiction or stories or sports or movies or ENTERTAINMENT in general.

When an important document comes across her desk, does she pass it by if the first paragraph doesn’t grab her?  How does she develop her knowledge of policy?  How does she justify cutting one program over another without some empirical basis for making the decision?

We get a peek of how Sarah Palin views knowledge in her thoughts on “reading books.”  Books are the primary source of knowledge and facts in our society.  To Palin, they are merely entertainment.

This isn’t the only time Palin has expressed here dislike for books and knowledge.  In 1996, Palin asked the head librarian of Wasilla if she would ban books.  The librarian stood firm and refused to consider banning books.  Palin then asked the librarian to resign two different times before the librarian finally resigned. (source: Anchroage Daily News).

Palin also expressed her dislike for sex education.  I posted about this earlier. (A Traditional Christian Marriage).  Palin said she would not support sex-ed programs that explicitly talk about sex.  She supports abstinence only programs, even though they are consistently show to provide incorrect information and fail to prevent unwanted pregnancy.

Palin’s relationship with knowledge scares me.  She doesn’t seem to need knowledge.  So what does she base her decisions on?

She has a default.  God.  She can base her decisions on her interpretation of the bible.  She can base her decisions on the way she feels after she prays.  She need only to consult with God and her moral code to make decision for the rest of the world.

Tonight Sarah Palin debates Joe Biden.  I hope we see the Real Sarah Palin in more depth.   If we do,this debate is going to be a carnival of ridiculousness.

The Price of Delaying the Bailout September 30, 2008

Posted by sliceof in American Politics, Economics.
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There are two types of people that are going to be DIRECTLY affected by the failing financial market.

1. People with much of their wealth invested in the market.  These people are going to suffer some loss, but as long as they don’t pull out of the market, they will be fine.  The market will go back up and their money will be there.  Their loss will end up being the loss of interest and gain on their investment.

2. People who lose their jobs.  Well, if workers in any sector are going to lose their jobs, the workers in the financial sector is probably the most apt to handle it
a. They already have incomes well over the cost of living.  Without a 300k job, they are going struggle making payments on pricey houses and cars, but it is highly unlikely that they are going to struggle to eat.
b. Most of those in the investment sector are well educated.  Other sectors of the economy will be able to absorb their skills much easier than if a toothpaste factory shut down.  Again, they may not be making the same quarter of a million they were making on wall street, but it is probably not going to be devastating.

Cut backs for people on Wall Street are going to be less Starbucks and switching from Taxi’s to the subway.   I pulled that directly from ths BBC interview in this post:

The Hardships of Being a Wall Street Employee

The extent of this market failure depends on the passing of a bailout.  Waiting a week isn’t going to do irreversible damage.  Waiting a month may leave scars and may push the money of the world into other financial markets with more “socialistic” governments.

I am thankful for the discussion and the tug of war in the congress, but something needs to pass or the effects of this failure are going to reach much farther then Wall Street.

The Hardships of Being a Wall Street Employee September 26, 2008

Posted by sliceof in American Politics, Economics.
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The BBC reports that Wall Street Workers are faced with devastating hardships.

Some people have to “Cut way back on the Starbucks habit, now it is a treat.”

Other hardworking wall streeters are forced to used subways instead of taxis.

Pretty soon they will be forced to make dinner at home!


A traditional Christian marriage September 25, 2008

Posted by sliceof in American Politics.
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I watch a bio of Sarah Palin and caught a quick mention about her marriage.

Nearly twenty years ago, Sarah and her now husband Todd secretly eloped, with no notice to family members and friends.  Two kids run off to tie the knot and finally consimate their love within the bounds of marriage.  A romantic tale of love.

However, one small detail caught my ear.  Less than eight months after the Palin’s suprise marriage, their first son Track was born.

This leaves two possibilites:

  • Track was conceived in the cheap honeymoon hotel and born more than one month early
  • Track was conceived in the cab of a Ford F150 and born a couple days early

I have no proof concerning the validity of either statement.  However, it is possible that and after missing her period and taking several pregnancy tests, Sarah eloped Todd to ensure that that Track was legitamate in the eyes of God and chruch.

I come from a big Catholic Family.  To me, Senario 2 seems more probable then possible.

Why does this matter?  Am I just fueling the tabloid politics?

Yes, Maybe.

This is important because it hightlights the problem of sex education.  Sarah Palin strongly opposes comprehensive sex education.  She says, “The explicit sex-ed programs will not find my support”(http://eagleforumalaska.blogspot.com/).  I think what she means by “explicit sex-ed programs” is “factual sex-ed programs.”

Sarah Palin supports abstinence-only programs.  Abstinence-only programs have been proven over and over again to be ineffective (http://www.washingtonpost.com/wp-dyn/content/article/2007/04/13/AR2007041301003.html).  Part of their failure may have to do with the fact that many students of abstinence-only programs in the US receive information that simply isn’t true (http://www.washingtonpost.com/wp-dyn/articles/A26623-2004Dec1.html).  Abstinence-only programs don’t prevent kids from having sex, they don’t prevent girls from getting pregnant.  I could go on about how ridiculous these programs are, but on to the main point.

The reason I bring all this up that the Palin family have benefited from a strict Abstinence-only education in the home.   The result has been a (possible) unplanned pre-marital pregnancy with Sarah and Todd and an obvious unplanned pre-marital pregnancy with their daughter. Bristol.

The problem I see here is that values get in the way of reality.  How can you continue to pretend that abstinece works when it fails statiscally and fails in your own family?
If Sarah Palin makes her decisions based on her values in spite of their effect, what else will she apply her values too?  Instead of spending time making this country better, will Palin spend her time making this country fit her values?