Wednesday, September 17, 2008

The Blame Game

Fannie Mae, Freddie Mac, Lehman Brothers, and now AIG are dominating the financial news. Naturally, the blame placers are looking to finger everyone, other than themselves.

House Speaker Nancy Pelosi, when asked Tuesday whether Democrats bear some of the responsibility regarding the current crisis on Wall Street, had a one-word answer: “No.”

Pelosi (D-Calif.) ripped President Bush’s “mismanagement” of the economy and a lack of regulation that led to the current situation.

“I think the American people have had it with this situation where the middle-income people in our country are not protected from the ramifications of the risk-taking and the greed of these financial institutions,” Pelosi told MSNBC.

When asked whether the Democrats “deserve some responsibility” regarding the economic crisis, Pelosi responded: “No.”


Ms. Pelosi has to be in the biggest state of denial, since the dawning of time. In the election of 2006, the Democrats promised to clean up "George Bush's mess", if only the American people would give them a chance. They have had almost two years to get things done, and so far nothing but some hearings on baseball steroid use. They also promised to make this Congress the most ethical in the history of the institution. They have had almost two years to clean up the vile stinking culture of Congress, and yet, tax-cheat Charlie Rangel still has his committee chair and William Jefferson still has his seat. Some ethical reform that was.

Additionally, Obama has been a member of the US Senate for almost four years and has been running for President for 19 months, now. That has been ample time to warn the people of the impending doom. But until today, he has essentially been silent. In fact, it is very interesting to note that he has benefited greatly from Freddie and Fannie.

When Reid Pelosi or Obama are asked about what this major debacle, all they do is blame the policies of George W. Bush. If you ask them what can be done about the entire mess, all they say is elect them so they can change directions from the "failed policies of George Bush".

Democrats running Congress into the ground further than it already was and Barack Obama standing idly by until it gives him campaign fodder. Can anyone fathom the damage that will be done if these imbeciles control both the legislative and executive branches of the US government?

Personally, I don't think government should do anything about these greedy companies that make bad business decisions. I think the government should allow the market corrections to take place, unabated. At some point, we must stop the bailouts and ride this thing out. But as you can see, I am not in Washington and have no plans to ever be, unless it's a sight-seeing tour.

Politicians should stop trying to insult my intelligence by telling me that this someone else's fault (usually the opposite party and its leadership). It's not government's job to control the economy, it's their job to get the hell out of the way and allow the market to cleanse itself. Anything else just sets the market up for failure, another day.

Think of it as resuscitating a terminal cancer patient, only to have the patient die next week.


12 comments:

Greg said...

0bama got a sweetheart mortgage from Countrywide (and additional capital from convicted Lebanese felon "Tony" Rezko) to buy his mansion in a white Chicago neighborhood.

He's been raking it in from Fannie Mae/Freddie Mac, now out of money and bailed out by the taxpayers 0bama promises to look out for.

And then this:

http://www.opensecrets.org/news/2008/09/brothers-grim-is-lehman-next.html

Change my arse! He's a whore like all the rest. In fact, he's working his way up to head prostitute in D.C.

Greg said...

As to the substance of your post, I tend to agree that gov't should get out of the way. I am in principle just annoyed that people who borrowed too much, or lent too much, or otherwise took risks would be bailed out with my tax dollars. You can't reap all the profit without being subject to any risk. If people don't feel the pain, they will just repeat the same error. As my contracts professor was fond of saying, the law does not protect those who don't protect themselves.

But I think it would be a disaster for everyone - my family included - if AIG went under. So, I'm pissed that so many billions of taxpayer funds are going there, but I'd probably be more upset if the US just let AIG - and the pensions it manages - disappear.

Also, do you have any information on an alleged law passed under Clinton to force lenders to give mortgages to low income people? A local talk radio guy has been hammering this, but I don't if it's reality or his anti-Clinton imagination....

A.C. McCloud said...

My example is Gerald Ford's purchase of the Penn Central in 1976. Had he not bought it the lines were going to scrap and eventually to shopping centers and condos. PC served all the main auto plants so it would have really put a dent in his WIN button program.

Ironically it was Carter who saved the day with de-regulation a few years later. It was one of the few good things he did. This allowed market forces to pare down the overloaded rail network and eventually we sold Conrail for a profit. If not for dereg, we'd still own it.

On the contrary, Obama seems like he might be OK with the Feds owning nearly everything.

Z said...

I'm still looking for the article I read and deleted somewhere (~!) this morning saying Bush had seen this coming five years ago and tried to get involved in Fannie Mae, Freddie, then, etc.....but the Democrats said that was silly.

Raines was warned about Freddie Mac and downplayed any threat and he's one of Obama's economic advisors and was apparently on the VP quest committee, too.

Nice if the media exposed this stuff. I'm glad you have.

Z said...

Also, Chris Dodd was on the committee investigating CountryWide and got a sweetheart loan from them.......the irony!

TERM LIMITS TERM LIMITS!

LASunsett said...

//Also, do you have any information on an alleged law passed under Clinton to force lenders to give mortgages to low income people?//

I am not sure on the law part. But I know that for 20 years or so, the government has more or less strongarmed lenders like Countrywide to do this.

LASunsett said...

//On the contrary, Obama seems like he might be OK with the Feds owning nearly everything.//

This is not difficult to understand when we consider Obama's past mentors were nearly all communist.

LASunsett said...

//Raines was warned about Freddie Mac and downplayed any threat and he's one of Obama's economic advisors and was apparently on the VP quest committee, too.//

Two reasons why they wanted this to happen now:

1. To use as campaign fodder. Dems love hard times, makes it easier for them to win.

2. They didn't want it happening on their watch, should they win. I mean they would have blamed it all on Bush, but still it would have been their problem to deal with.

Rocket said...

Hi LA

"Personally, I don't think government should do anything about these greedy companies that make bad business decisions. I think the government should allow the market corrections to take place, unabated. At some point, we must stop the bailouts and ride this thing out."

I generally agree with you but in this case, we've got situations of failure of some of these companies which are so big and their debt so extended internationally that it could bring down the world economy.

Now we don't want that do we.

Look at how the market has corrected itself so far.

For those who would be tempted. This is not socialism. This is survival.

In any case, the greed (maybe it's endemic to our system) has got out of hand and yes the poor middle class is taking the brunt of this greed losing their pensions while the CEO walks off with millions. UNACCEPTABLE!

More later but I've got to work to cover my equity losses.

PS - Screw the Dallas Cowboys. I turned off the tv with Philly ahead but I knew Dallas would win and damn if they didn't.

Mustang said...

There is no mystery here … Socialists oppose capitalism, a principle that holds that there are both rewards and risks associated with capital investment. When corporations make decisions, they do so with the knowledge that a poor judgment will likely have unsatisfactory consequences. It could mean that the CEO/CFO loses his or her job. It could mean that shareholders will change the composition of the board of directors. It could mean that stockholders will sell-off their holdings and invest in some other country. And all of this does seem equitable to me.

Greed is good … so said Michael Douglas in one of his better films. But moderation is the key, in my view. There is nothing wrong with long-term gains from thoughtful business decisions, but short-term gains from corrupt business dealings is avarice at it’s worst. Corrupt businessmen, when combined with corrupt politicians lead us to unseemly difficulties. Democrats are not alone in this, and yet none of the current gaggle seems to have learned much from fall of Duke Cunningham. The top four Democrats in the Senate accepted considerable campaign donations from both FRE and FNM … the same individuals responsible for oversight of both these corporations. Obama has personally benefitted from his position as a senator from Illinois (not unlike his former pastor Jeremiah Wright has benefitted from cozy deals with crooks). The list could go on an on …

And now these socialist pukes want to transform the corporate mindset into one that parallels that of utterly stupid people who finances a home on an ARM they could not afford as the rates adjusted upward. I resent the government bailing out individuals, and I oppose the idea that government should bail out poorly leveraged corporations. My real concern is that McCain seems to share the socialist view that it is government’s responsibility to oversee corporate financial transactions. And while I fear there is little that I can do to change any of the poorly conceived ideas among Washington politicians, it will not take corporate CEOs long to figure out that they can still draws tens of millions of dollars in bonuses, no matter how incompetent they are, or how risky poor business decisions may be, because Uncle Sugar will be there to bail them out.

Money is a limited resource. For every one dollar the US government spends on loans to shaky corporations, there is one dollar less to invest in improved infrastructure benefitting the American people. For every dollar taxpayers must pay into taxes, there is one dollar less to invest or save. And given the state of our national treasury, each dollar presented to citizens as a “rebate” is a dollar added to the national debt.

I will conclude that we are not well served by politicians; they are the problem and will continue to be the bane of a democratic people until we are allowed to shoot one or two of them.

A.C. McCloud said...

My real concern is that McCain seems to share the socialist view that it is government’s responsibility to oversee corporate financial transactions.

For a man of principle, McCain sure seems to blow with the political winds at times. I blame his advisors, and him for listening. He's old enough to tell them to screw off but I guess populism is too tempting--after all he's caved on global warming, immigration and ANWR.

Rocket said...

Hi Mustang

"Socialists oppose capitalism, a principle that holds that there are both rewards and risks associated with capital"

I would be careful with that statement. They oppose it for the masses but not for themselves given the net worth of many of them. OH! I've got stories to tell about the French socialists.