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What Just Happened? Democrats Deny Any Culpability for the Financial Crisis

October 3, 2008

What Just Happened?

I’m sure there’s enough blame to go around. I don’t know that for a fact, but I’ve been taught to take that position reflexively. Call it the thinking person’s unthinking position.

Except for the fact that Democrats and other open-minded, fair and non-ideological types, have decided to make the case that what’s happening is simply the fault of a) George W. Bush b) Conservatives and C) more generally free-market capitalism.

I’m fed up.

Go ahead. Learn me the right-thinking lesson. Tell me how in your un-biased totally nuanced and non-partisan way that it’s simply a combination of A B & C. Plus, Jesus hated teaser rates. He loved tax collectors, but hated mortgage brokers.

Maybe you’ll surprise me, but I’m already writing the “I expected better” response.

Pork-larding congress, BURN IN HELL !!!

N.B. (for Timmy’s benefit of course) this post was written under the influence of a perfectly chilled Martini- 2 shots of ice-cold Bombay Sapphire and a generous supply of the World’s Largest Olives from Trader Joe’s. Your mileage may vary.

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13 Comments leave one →
  1. David permalink
    October 3, 2008 10:34 pm

    The sad fact. Congress is to blame (republican led ’94-2006, but lets not exonerate the Democrats on this gravy train). The public, for taking out loans they could not afford. To the loaner’s, for giving out loans to people without background checks, credit checks, and down payments. Some are including the poor as part of the problem for the repeal of the Glass-Steigall act, (allowing more investment into poor communtiies),but a lot of these loans where given to the middle and upper-middle class with teaser rates as well

    The national savings rate is at an all time low. The gatekeepers (credit industry, banking industry etc), just saw the money. No oversight, no cares, great ponzi scheme).

    Maybe I’m wrong, but I’m a middle class person, with a middle class home (that I can afford), and I am saving for my retirement, kids college etc, but the two times that I went to the LA Dodgers this summer, I couldn’t believe that people would pay $5 for a hotdog, $10 for a beer etc (and technically my wife and I are in the top 6% of household income earners in this country). I don’t own a flat-screen, my laptop is 5 years old, my ipod is on its second hard-drive etc etc etc.

    Count, I’m with you. All of congress were for it, before they were against it. The promises being made in the debates and tv-ads are mostly lies, from both parties. The realities of what can be delivered because neither side can be honest with the public, because this is a gladiator sport, and the public are like an unfed, untamed lion. No one wants to hear the truth, and the truth really matters. So what are they to do? We are only as good as our elected leaders.

    My biggest issue with Republicans is the supreme court and the christian RW.

  2. David permalink
    October 3, 2008 10:37 pm

    We are all to blame. R’s and D’s are all in the payroll of these bankers.

  3. October 3, 2008 11:41 pm

    David (no not you, the other David)-
    There may be R’s and D’s on the payroll (more heavily D, but John McCain is up there last I heard) but only one campaign is advocating that judges can arbitrarily reset the amount of principal due on a loan.

    Speaking of which, just where in the Constitution does Biden purport to find the delegated power of the government to break the terms of private contracts?

    Donald Sensing: Biden promises to destroy the American housing market

    This is insanity.

  4. Timmy C. permalink
    October 4, 2008 11:22 am

    Pretty non-controversial stance, both D’s and R’s let this happen.

    Robert Reich, former Labor Secretary who way back in 2003, warned about this presciently, recently said this:

    ” In the latter years of the Clinton administration — when I was not there any longer, I should add — there was an attempt by Alan Greenspan and Bob Rubin and a few others to deregulate financial markets, and they did. They split commercial banking off from investment banking. And many people say, “Well, that was the beginning of the problem,” and then, of course, in 2003-2004, Alan Greenspan reduced short-term interest rates to the point where every single bank wanted to lend money. I mean, if you could stand up straight you could get a bank loan because there was so much pressure to get that money out the door. Money was so cheap. So, yes, there is some responsibility on Democrats, some responsibility on Alan Greenspan and the Fed.”

    And FYI this is Barack’s position too… back in March he said

    “Under Republican and Democratic Administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productivity and sound business practices. We let the special interests put their thumbs on the economic scales. The result has been a distorted market that creates bubbles instead of steady, sustainable growth; a market that favors Wall Street over Main Street, but ends up hurting both. ”

    Some deregulation of outdated rules was smart. But NOTHING meaningful was built in it’s place. At the same speech in March:

    “Unfortunately, instead of establishing a 21st century regulatory framework, we simply dismantled the old one – aided by a legal but corrupt bargain in which campaign money all too often shaped policy and watered down oversight. In doing so, we encouraged a winner take all, anything goes environment that helped foster devastating dislocations in our economy. “

    I think Republicans are bearing the brunt of this overall because:

    A. Ultimately the buck stops where? You can blame Congress (as the NRCC video you post did) for not passing the FEDERAL HOUSING ENTERPRISE REGULATORY REFORM ACT OF 2005…

    (but in reality that bill PASSED WITH A VERY STRONG DEM MAJORITY in the House…
    See here: http://www.govtrack.us/congress/vote.xpd?vote=h2005-547 and ended up dieing in Republican lead committee in the Senate without ever getting a vote)

    ..but ultimately I think Americans are saying: “Whose watch did this happen on? What more important things was the Secretary of the Treasury doing when this was happening? Or Greenspan? Where was Bush?”

    B. Some articulations of conservative fiscal ideology just seem lacking – given this crisis:/b> The idea that wealth trickles down, and our policies should be built on that idea… (Barack’s best line is that this just showed pain “trickling up.” The idea that you “deregulate, baby deregulate” your way to broad prosperity…. The knee jerk response from some conservatives that any governmental accountability into the market is “artificial interference” to the “Invisible Hand of the Marketplace” and thus unwise.

  5. October 4, 2008 12:03 pm

    So… even though both are to blame, demagoging the shit out of it on behalf of Obama is perfectly acceptable. It’s politics, fine.

    Bush and McCain did warn about the problem in 2003 and 2005 I believe. Also, Democrats have been in control of congress for the last 2 years. Certainly this could have been a top priority for them. I think the crisis suits them just fine though. Whatever gets them in power. Instead they’ve simply dithered around running out the clock until they can take over in 2009.

    Also there is a good case to be made that deregulation helped some banks be able to take over other banks that made bad decisions.

    I hope the Dems can show some leadership on this. Republican calls to investigate and regulate Fannie and Freddie are very conveniently labled as rascist attacks- the nuclear bomb of politics. I don’t see Obama helping the situation- and in fact I think he’s hurt it tremendously already.

    It’ll be interesting to see what happens when the can finally do whatever they want. I’m not looking forward to it.

  6. Timmy C. permalink
    October 4, 2008 1:42 pm

    “So… even though both are to blame, demagoging the shit out of it on behalf of Obama is perfectly acceptable. It’s politics, fine.”

    That’s not what I’m saying. Nor Barack.

    In his speech he calls out the Dems for what they did wrong, and the Republicans in Congress for their side, and Bush and his Feds for their fault.

    And i forgot to give it’s source URL:
    http://www.barackobama.com/2008/03/27/remarks_of_senator_barack_obam_54.php

    Are some saying it’s exclusively the R’s fault? I’m sure but you didn’t link to any…which ones got your goat so?

    And why no criticisms equally of the Republican video you posted exclusively blaming democrats?

    “Also there is a good case to be made that deregulation helped some banks be able to take over other banks that made bad decisions.”

    I agree that SOME deregulation was important and needed, but once it was taken down, they erred clearly in retrospect in NOT replacing it with a 21st century appropriate set of regulations to force SOME accountability.

  7. October 5, 2008 5:17 pm

    Tim-
    For starters, how about Nancy Pelosi’s speech before the failed vote? A sample:

    PELOSI: When was the last time anyone ever asked you for $700 billion?

    It’s a staggering figure and many questions have arisen from that request. And we have been hearing a very informed debate on all sides of this issue here today. I’m proud of the debate.

    $700 billion. A staggering number, but only a part of the cost of the failed Bush economic policies to our country. Policies that were built on budget recklessness when Pres. Bush took office, he inherited Pres. Clinton’s surpluses – four years in a row budget surpluses on a trajectory of $5.6 trillion in surplus. And with his reckless economic policies, within two years, he had turned it around. And now 8 years later, the foundation of that fiscal irresponsibility, combined with an “anything goes” economic policy, has taken us to where we are today.

    They claim to be free-market advocates, when it’s really an anything goes mentality. No regulation, no supervision, no discipline. And if you fail, you will have a golden parachute and the taxpayer will bail you out.

    Those days are over. The party is over in that respect.

    Democrats believe in a free market. We know that it can create jobs, it can create wealth, many good things in our economy. But in this case, in this unbridled form, as encouraged and supported by the Republicans — some Republicans, not all — it has created not jobs, not capital, it has created chaos. And it is that chaos that the Secretary of the Treasury and the Chairman of the Fed came to see us, just about a week and a half ago. It seems like an eternity, doesn’t it? So much has happened. The news was so bad. They described a very dismal situation.

    This is such destructive demagoguery, not to mention so chock full of vicious lies and half truths it simply floors me.

    That you would say “an approrpriate set of regulations to force SOME accountability” is needed and there fore blame the Republicans just blows my mind. What darkness has overtaken you friend?

    Has it not been made clear that in was Democrats that created the CRA? That forced Fannie Mae and other lenders to take on bad loans or else face legal troubles or political disgrace? That both President Bush in 2003 and John McCain in 2005 sought greater oversight of Fannie Mae only to be reubuffed primarily by Democrats? That even now the McCain camp is reticent to point these things out for fear of being labled a rascist by your “post-racial” candidate?

    Your party is responsible for the very things you decry. Wake up. Snap out of it. YOUR party resisted efforts for accountability. That’s why we’re in this mess.

    Should there have been other regulations about ARM’s and teaser rates? In retrospect yes, but that’s mostly about regulating greed – both on Main Street and Wall Street.

    In the link you have – from 6 months ago, because Obama has had virtually nothing to say lately on this mess- a mess he also resisted getting involved in years ago- he says this:

    This loss has not happened by accident. It’s because of decisions made in boardrooms, on trading floors and in Washington. Under Republican and Democratic Administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productivity and sound business practices. We let the special interests put their thumbs on the economic scales. The result has been a distorted market that creates bubbles instead of steady, sustainable growth; a market that favors Wall Street over Main Street, but ends up hurting both.

    No, no, no. Banks were forced to make these bad loans which were then guaranteed by Fannie Mae. Because of community organizers like Obama. Because of Democratic ideals. If “thumbs were on the scales” it was to favor Main street. Wall Street traded in these loans – which were essentially backed by the government- “safe investements” which is not surprising or chaos but good business.

    Then came the accounting scandals- which could have been avoided by better oversight desired Bush and McCain- and here we are.

    Let’s be clear: the market was rigged to favor MAIN STREET and ended up hurting MAIN STREET. This is not a crisis of capitalism- messing with capitalism for social engineering purposes was the seed.

    This is the truth that you and Obama are trying to subvert and I can’t take it any more. I can’t take the big lies. It’s Orwellian and it has to stop.

    The deregulation in question- erasing the Great Depression era distinction between investment banks has been part of the solution, not part of the problem as far as I can tell. The emergence of ARMS and teaser rates, while ratcheted up during Bush’s watch, was not the “policy” of the Bush regime or conservatives but simply a market reaction to cheap money and pressure to make housing affordable to all. That pressure was primarily Democratic and efforts to regulate and increase oversight of it were also Democratic.

    Still, I’ll agree that Congress and Clinton and Bush administration policies created this mess. We have a crisis of leadership.

    The answer though is not to do what Obama has suggested and give judges the ability to reset principal and interest rate terms in mortgages. That kind of social-engineering has got us into this mess and will only make things worse, as good as it sounds to the common man in trouble.

  8. Timmy C. permalink
    October 5, 2008 6:48 pm

    “Your party is responsible for the very things you decry. Wake up. Snap out of it. YOUR party resisted efforts for accountability. That’s why we’re in this mess.”

    Um, didn’t I say that Dems were in part responsible? And didn’t Barack?

  9. Timmy C. permalink
    October 5, 2008 7:16 pm

    Frankly and even in the overheated speech that so pissed you off, still Speaker Pelosi said that the crisis was caused by “some Republicans, not all…”

    Where is the “some, not all” in the NRCC ad you played?

    And where is your disapproval of their completely blaming the Dems?

  10. David permalink
    October 5, 2008 8:34 pm

    Our deficit, debt in this country is mostly the cause of Republican majority that was around from 1994 to 2006. No oversight committees to speak of at all. At least oversight was being restored after 2006. Then there has been the appropriations bills for funding the (illegal) war in Iraq. That money was not being taken out from the war budget, but from straight from our childrens’ pockets (We borrowed from the rest of the world (Chinese etc). Bush will go down as the worst president ever, with a secretive VP who supports torture). McCain will be the same.

    All of a politicians hold responsibility, as well as citizens who over-extended themselves during the wanton handing out of loans to all people of all incomes. Now we need to hand out pills for Alzhiemers and short term memory loss. Because that’s what the people of this country are suffering from. Republican’s had the majority in congress for 12 years, all this shit didn’t just happen because of the last 2 years of policy. Think about it Count.

  11. Toayminator permalink
    October 7, 2008 1:37 pm

    While I mostly agree with the Count, I think this financial crisis is just a symptom of a much bigger problem. I think THIS gets to the real root of the problem:

    http://www.onenewsnow.com/Politics/Default.aspx?id=275010

  12. March 11, 2009 1:25 am

    I dont usually comment, but after reading through so much info I had to say thanks

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  1. Why I Mostly Blame the Democrats for the Financial Crisis « Strange Monkey Doll

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