Arnold and Bill

I never quite know what to make of O'Reilly. Years ago he tempered his social conservatism with a healthy dose of individual responsibility and fiscal conservatism. Then he seemed to become a populist... I think many people just don't know where the man stands anymore.

Barney Franks and the Democrats have been in charge of congress for 18 months. The Republicans have been in charge of the Presidency and the congress the rest of the last 7.5 years and Bill'O tries to blame it on Barney Franks.

When you'd come to the point of putting Screamin Bill'o on your side you've pretty much lost your case.

Max M - it's always been about O'Reilly. I can't stand how he's always peddling his books and T-shirts, and coffee mugs.

O'Reilly is a dangerous idiot. Barney Frank is a cunning crook.

muirgeo --

Interesting point. Of course, you realize that if you can't blame the Democrats for anything passed (or not passed) by the Republican Congress then, then you also can't blame the Republicans for anything passed (or not passed) by the Democrat Congress now.

This means, among other things, that the initial failure of the $700B "bailout" was the Democrats' fault, not the Republicans'. It also means that all the gluttony in the bill that did pass (a tax-break for wooden arrows ?!) is the Democrats' fault as well.

In any case, remember that the Democrats had more than 40 votes in the Senate. Due to the Senate's filibuster rules, the Republicans could not pass anything in the face of a solidly opposed Democratic opposition. So, the two sides had to compromise.

O'Reilly manages to make Barney Frank look reasonable. I would be embarrassed to post his rant here.

I wish this didn't have the bombastic music, the McCain pitch, and the Obama trash, but for the most part, this video does an excellent job of putting together all the facts including graphs and charts. A REALLY good summery. It moves kind of fast, so you may want to watch it a second time and hit pause on each slide.

http://www.youtube.com/watch?v=GaABV1CWXug

This video is less bombastic, it's mostly (D) Waters, Meeks, Watt, Davis, Frank and Franklin Raines all saying "there's nothing wrong with Fannie and Freddie". It's right here, in their own words. Listen to the quotes from these people, and listen to all the regulators and people with (R) in front of their names trying to rein this in years ago.

http://www.youtube.com/watch?v=JNAapMpetvw

"This means, among other things, that the initial failure of the $700B "bailout" was the Democrats' fault, not the Republicans'. It also means that all the gluttony in the bill that did pass (a tax-break for wooden arrows ?!) is the Democrats' fault as well."

Agreed but this is the same logic that blames FDR for the Depression.

It's like saying youdid a poor job of putting together the shattered vase that some one else broke.

One more thing on Bill'o... see that furious outrage he projects. That's the outrage of a man with his ideological back against the wall.... these ideologies.... these preconceived fallacious beliefs do not die easy.

muirgeo --

He's always like that. The problem with people like him is that they generate more heat than light. It has nothing to do with the topic.

As to your first point, I am increasingly unclear that the vase was ever broken to begin with.

1998 Salary and Bonus of Senior Fannie Mae Executives:

James A. Johnson,


salary $966,000 Bonus $1,932,000


Franklin D. Raines


salary $526,154 Bonus $1,109,589


Lawrence M. Small


salary $783,839 Bonus $1,108,259


Jamie Gorelick


salary $567,000 Bonus $779,625


J. Timothy Howard


salary $395,000 Bonus $493,750


Robert J. Levin


salary $395,000 Bonus $493,750


Office of Federal Housing Enterprise Oversight


September 17, 2004

... this video does an excellent job of putting together all the facts including graphs and charts.

No. It's crap. Blaming the CRA for the whole thing is mindless. We already have evidence in the forum that over half of the subprime loans came from lenders not subject to the CRA at all and substantially more from lenders with little CRA exposure. Some CRA-governed lenders contributed to the problem.

Some twelve year old girls love Madonna and grow up to become porn stars. This fact doesn't make Madonna "the cause" of porn. Maybe we can meaningfully call Madonna "a contributor" or "symptomatic", but that's a far cry from "the cause".

I'm getting married next year, so I've been in the housing market for a while. "Low income housing" is not the problem in my experience. I'm now tracking several new, high end properties that have stood vacant on the market for many months, even years. The overbuilding did not occur on the low end of the market, not in my neck of the woods.

Citing the CRA without citing the recent doubling of the Jumbo Mortgage threshold is incredibly disingenuous. That's politics, not economic science.

Some twelve year old girls love Madonna and grow up to become porn stars. This fact doesn't make Madonna "the cause" of porn. Maybe we can meaningfully call Madonna "a contributor" or "symptomatic", but that's a far cry from "the cause".

Poor analogy. Extremely poor.

What's your beef with Madonna and twelve year old girls?

see that furious outrage he projects. That's the outrage of a man with his ideological back against the wall.... these ideologies.... these preconceived fallacious beliefs do not die easy.

Thanks for explaining yourself, Muirgeo. I feel I understand you much better now.

Some twelve year old girls love Madonna and grow up to become porn stars. This fact doesn't make Madonna "the cause" of porn. Maybe we can meaningfully call Madonna "a contributor" or "symptomatic", but that's a far cry from "the cause".

Martin, as a former 12 year old girl...um...that's just a bad example. Neither I nor any of my 12 year old cohorts were ever influenced to become porn stars by Madonna or anyone else. I'm afraid that girls who become porn stars have deeper and more complex issues than Madonna.

I don't disagree with you that the CRA is not the sole cause but CRA together with jumbo loan limits don't explain the whole story either. Fed rate cuts in 2001, credit spreads tightening to unprecedented levels, Alt-A loans, zero-down mortgages, removal of capital gains tax on houses but not other investments and excessive leverage (of which tight credit spreads and reduced or nonexistent downpayments are a part) and Fannie & Freddie also belong on the laundry list of reasons for this mess - or whatever we're calling it. If government had not mandated that people needed to have a mortgage instead of renting whether they could afford it or not and that we were not to suffer a recession at all costs in 2001, any excesses that may have popped in the credit markets and the mortgage market in particular would have been on a much smaller scale.

I think I agree with Peter Schiff that our avoidance of recession in 2001 was instrumental in making the next recession worse. I dread the depression that will grow out of the current shenanigans to avoid recession this time as well

As for Bill O'Reilly...I don't like him so I never watch his show. But in this case, I found the video deeply satisfying. I've been wanting to slap Barney Frank for months and this is the closest I'm ever going to come.

Martin,

I don't totally disagree with you. Understand, I didn't make the video. And I already posted that I had some reservations about it.

I spent dinner tonight (and dinner last friday) giving a lesson from 1921 to the present situation. I'm humble in what I know, but I realized I know orders of magnitude more than others around me. And in general, I don't hang around fools.

You can't possibly be denying the CRA was part of the mix. I'm not a big fan of "blame" and single causality. Things are much more complicated than that.

But please don't take half a breath and then turn right around with your anecdotal evidence from your own house hunting in your back yard.

I believe that Muirduck was opposed to the bailout bill earlier this week. Now that the Democrats in the House voted to make it law, I wonder if the muirdiot has seen the light and now supports it?

"I spent dinner tonight (and dinner last friday) giving a lesson from 1921 to the present situation. I'm humble .....

You can't possibly be denying the CRA was part of the mix. "

Posted by: SteveO

So I guess you are going to tell us how the CRA caused the 1927's housing crash that was a major factor leading to that economic disaster???? Hold on before you start... I want to get some cookies and milk first.

No I wanted the housing bill to fail... I was hoping for a 60 seat Democratic senate majority.

Yep, I'm upset with the Democratic leadership because they were in the position of power and they acted like pussies before the weakened Wall Street Titans..... they could chopped off their god dam heads.

Neither I nor any of my 12 year old cohorts were ever influenced to become porn stars by Madonna or anyone else.

Well ... I've never been a 12 year old girl, but I've seen a lot of former 12 year old girls on TV.

Yeah, they're influenced to become porn stars by the Madonna brand, among many other things, but Madonna's not "the cause". She's symptomatic. That's precisely my point.

I was a huge Madonna fan in the nineties by the way. Some of her lyrics are very clever, "Like a Prayer" for example. What's like a prayer?

I have nothing against porn stars either. I don't know how they make money these days. Peak Porn seems a compelling proposition too. I suppose most women hate the work after a while and burn out quickly, but others are happy with it and profit in innovative ways.

I don't disagree with you that the CRA is not the sole cause but CRA together with jumbo loan limits don't explain the whole story either.

I agree, but all of the particulars you list are trees, not the forest. We're still avoiding the forest, too much nominal "investment" chasing too little entitlement to rents. Why must we substitute a trillion dollars in compulsory rent for a trillion in "free market investments"? Because we're going to create these rents somehow come hell or high water.

The problem certainly is not limited to FICA and FNMA. Both are now huge factors in the rent-seeking equation, but neither were the "rents" of classical liberals, and the classical rents still exist too.

These rents are modern "Capitalism" in reality. It ain't no cooperative, voluntary, market mediated, entrepreneurial producer/consumer's utopia imagined by Pierre Proudhon or Murray Rothbard or anyone else. That elements of these utopian visions exist doesn't contradict this thesis.

If government had not ... , any excesses ... would have been on a much smaller scale.

No. You confuse cause and effect. The demand for rents exists out here. It's not simply a motive of central authorities. If we hadn't bought mortgage backed securities of dubious value, we'd have bought something else of dubious value, and we'd now be clamouring for our Congressmen to substitute taxpayer obligations or whatever for the something else. Politicians are happy to sell us the bill of goods, but they don't manufacture the market for entitlement to rents. They only supply it.

What's happening now would still happen in any nominally "stateless" system you can imagine. It would happen under a gold standard with no central bank, and the Rothbardians would be crying "fraud" all over the place, and they'd be calling upon more central authorities to police the fraud ... and to give 'em their money back.

Because people are lot of state worshiping hypocrites in reality.

Yep, I'm upset with the Democratic leadership because they were in the position of power and they acted like pussies

It would be wonderful if the PUSSIES got a 60 seat majority, Wouldn't it?

Martin,

Since I have to say that I'm not expert enough on the subject of whores to make any decisive statements on Madonna's influence. Plus, I was more a Boy George fan than Madonna - just something about a guy from South London from a family of boxers built like the side of a barn with a falsetto voice and a quivering vebratto dressed so kooky appealed to my love of the bizarre. I spent my youth more interested in Sid Vicious and eccentric characters than in dressing like a slut. So, what do I know about porn?

If we hadn't bought mortgage backed securities of dubious value, we'd have bought something else of dubious value, and we'd now be clamouring for our Congressmen to substitute taxpayer obligations or whatever for the something else. Politicians are happy to sell us the bill of goods, but they don't manufacture the market for entitlement to rents. They only supply it.

...Because people are lot of state worshiping hypocrites in reality....

I don't disagree with you. However, had government not been so involved in creating this problem, it would not be as large and the cry for more intervention would have been smaller as well. After all, when small businesses fail, government doesn't bail them out. Without government to raise barriers to entry and to create rents, I don't think individual businesses can grow "too large to fail". In fact, our constitution was meant to reduce the power of government so that it couldn't tread on individual liberty and couldn't arbitrarily decide who can succeed and who can fail. Instead, it is the constitution which has been trodden upon. So, we're screwed. We have traded uncertainty for perceived security. As one who has lived in several countries which have made this trade-off, I can tell you that people always sell uncertainty too cheaply and vastly overpay for security.

... I'm not expert enough on the subject of whores ...

I confess I'm a little disappointed.

After all, when small businesses fail, government doesn't bail them out.

Big fish eat smaller fish. Whales eat plankton.

... people always sell uncertainty too cheaply and vastly overpay for security.

We overpay for perceived security anyway. Then when the sellers have swallowed the premium, we want a refund, and we don't much care how we get it.

Browse over to a new blog when you feel like it. I'm trying to develop a thesis and keep this subject alive as it fades temporarily from the headlines.

I'm not quite a gen Xer, but I'm at the tail end of the baby boom and still have a lot of rent seeking ahead of me. The competition for rents has never been so fierce, and capital markets seem incredibly inflated all around these days. As incredible and unprecedented as it seems, this bailout can't be the final chapter. It's more like an introduction.

As incredible and unprecedented as it seems, this bailout can't be the final chapter. It's more like an introduction.

The government postpones (relatively) small problems until they become big disasters.

As incredible and unprecedented as it seems, this bailout can't be the final chapter. It's more like an introduction." is the prologue to a coming collapse

I absolutely agree with you. And by "security" I mean the security of never being able to achieve anything by merit alone ever again. The security of relative poverty, of malaise, of a life of bitterness and a dim future. That is the security people get in exchange for selling uncertainty to Big Brother. Ironically, the populations of those countries end up being the least certain and optimistic about their futures. They have fewer children and spend less because they never know if they will have enough in years to come.

I probably come across as a terrible pessimist predicting doom, but that's not my point. I call it "Peak Rent", because rents presumably must peak eventually. Even the most heinous conmen (or incredible morons or both), like Dubya, can't squeeze more rent out of us beyond a certain point. Your empire collapsed. Ours will too. I'm optimistic about that.

The world is still full of opportunity for enterprising people. The problem for rent seekers, going forward, is that these enterprising people won't sell enough entitlement to rents to satisfy the unprecedented demand, but that's never been a problem for me, because I've never wanted to live on rents anyway. I want to be one of the people who won't sell.

Arnold would have been more gracious.

Grace doesn't play well on cable news. Faux outrage and excited bloviating are much better for ratings.

Your empire collapsed. Ours will too. I'm optimistic about that.

It collapsed only briefly. I have no optimism when it comes to Russia. I have more optimism for the U.S., though. In Russia, we have and have always had a love of strongmen (much like the Middle East). There's still much more love of liberty here.