During this whole mug-the-taxpayer debacle, a.k.a. the "Bailout", or *cough*, the "Rescue" of Wall St., I've been having some "spirited debates" with various members of the Sociocrat wing of the Republicrat Party.
"SEE!", they howl with a misinformed smugness, "THIS is what you get with a *sneer*, free market economy!!!"
Ahem. "Exactly what free market economy are you referring to, sir?", I retort.
"Wha-wha-WHAT?!?", shrieks the stunned Sociocrat. "Why, the evil, greedy, capitalistic free market economy of America...the one you 'fiscally conservative' Republican & Libertarian types brag about! What do you have to say about your hero Adam Smith now?"
*Cough* "Exactly what fiscally conservative Republicans are you referring to, sir?", I ask incredulously. "Nevermind. How can you possibly consider Fannie Mae and Freddie Mac part of a free market economy? Remember the Clinton administration, Barney Frank, and their legislation to force mortgage companies to make loans to people who would otherwise not qualify in a free market economy?"
"Oh, well, they were just helping out the poor and the common man.", says the Sociocrat.
"No, don't try tugging on my heartstrings...come back over here to the discussion of our alleged free market economy. How does government enforced lowering of mortgage qualifications even remotely fall in the realm of the free market?"
Answer: It doesn't...it is one of many examples of how we DO NOT have a free market economy, so stop blaming capitalism, do your homework, then open your eyes to reveal the true culprit of this Latest Economic Apocolypse.
"With Liberty and Justice for All??"
4 years ago
5 comments:
I heard on The Ticket (supposedly sports radio) about the Political Five Second rule. That is, if it takes more than five seconds to explain, you lose.
So, it's easy to scream 'Deregulation is at fault!" (3 seconds) ....
...Than to explain about how the deregulatory aspects of the GLBA didn't cause this crisis, but rather the regulatory riders requiring banks and other financial institution to adhere to certain lending standards (er, lower standards) associated with the Community Reinvestment Act. Also, a bank's ability to receive FDIC insurance and to take advantage of some of the 'modernization tools' in the GLBA Banking Modernization Act is also linked to giving loans to unqualified people based on racial quotas and historically underutilized business and underperforming neighborhoods. Now, these banks typically take their mortgages and batch them together to create mortgage backed securities which pays interest to investors which are actually generated from the underlying mortgage instruments that comprise this bond. Ordinarily, these bonds should be considered junk - but they received an AAA1 Moody's Bond Rating because they're 'guaranteed' by FNMA, a Government Supported Enterprise (GSE). But it turns out that FNMA cooked their books and also, simply 'rubberstamped' their approval on any and all mortgages, thus giving the market a false message about the true nature of these securities. On top of this, banks and other financial institutions are trading things called Credit Default Swaps (CDS) - which are effectively a put option guaranteeing a repurchase of securities should default occur. These again, had a false price built in due to a phony-baloney AAA1 rating. Yet, there were TRILLIONS of these going around due to the lack of freedom in the market. So, when Ms. Jones, a welfare recipient, defaults on the loan to her McMansion - that's the first domino setting this crisis in motion. All caused by REGULATION!
Er - took longer than five seconds. Guess I lose and not only should we 're-regulate', but I'm implicitly 'Hitler'.
Heil! LOL
Jonsie,
Another good job.
Albert
Browncoat,
With respect of your opinion and your steadfast dislike of Democrats in general, I do not see how you can sit 'beside' Republicans on this matter. It is will established that the once, "fiscal conservative party", known as Republicans, long ago, abandoned that title.
McCain's campaign to continually tie the Fannie and Freddie Orgs. to this financial failure in America, as the Key Initiators Of The Housing Failures, is not supported by Fact. In fact, it was recently discovered that a GOP consulting firm (DCI) was paid off by Freddie and Fannie to fight regulatory changes. See this link that exposes the GOP link to failed legislation attempts: Freddie Mac's Secret Plan To Kill Reform (http://www.cbsnews.com/stories/2008/10/20/national/main4531578.shtml), supported by GOP Consulting Firm. Also coming of light is that McCain's campaign aids were connected with this secret plan:(http://www.cbsnews.com/stories/2008/09/24/politics/washingtonpost/main4473574.shtml?source=related_story).
While I get the jist of your blog comments and I do like reading you 'editorial opinion' facts do make a difference. The GOP, while in charge were the culpable Party, not the Democrats who did not have majority control of either house and the White house for the almost 8 years, this financisl mess was created.
Albert, read it again, I'm not siding with the Republicans...you apparently missed some of my sarcasm.
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