Sep 24 2008
Bravo McCain – Put America First!
Just quick note so folks can have at it in the comments section. My initial take on McCain’s move to suspend his campaign and get to Washington to address the financial crisis is spot on. Country first.
Obama’s whining about a delay in a debate is proving to be a disaster – clearly he is thinking of Obama over country. Â There are 3 US Senators wandering the nation campaigning, not puting the financial crisis as a top priority.
If McCain’s move helps move the process then kudos to McCain. Obama can afford to wait a few days to flail (as we all know he will) in a debate. Want to debate Senator Obama? Get to the Senate and debate a fix to our crisis.
Update: And the Dems are acting like idiots. Â Last week Senator Reid claimed no one knew what to do and they planned to adjourn Congress, then came the Bush administration with a plan. Â Now Reid is telling McCain not to come to DC. Idiots. Reid is playing politics during a crisis and everyone can see it. Remember, the most reviled institution in DC is not the Presidency – it is the incompetent, do-nothing Democrat Congress.
Did you hear Obama say “Just call me if you need me” at his presser?
Well, at least there’s a silver lining if McCain loses – let the Dems try to figure out how to handle Great Depression part Deux.
McCain grabbed the attention again now he needs to shine the light of truth on the cockroaches in the Dem congress.
FOX just reported in 2005 Greenspan warned of a financial collapse if Fanny and Freddy were not reigned in played clip of Blarney Frank denying it.
All Dems voted against.
In 2006 McCain sponsored legislation to provide oversight on Fannie and Freddie all Dems voted against.
REFORMER McCain needs to use his new found spotlight to show who caused this and who is stalling trying to load a solution up with pork.
0Bomber is a lightweight and irrelevant except for the money he took from F=F more than any other in two years.
If Bush won’t point blame and REFORMER McMaverick won’t then turn Sarahcuda loose she will.
From a political standpoint this does not look good. However, the middle (of which AJ counts himself as part of) is very volatile and fluid. Reid is an idiot, he blew Obama’s cover. We don’t need you John because we can do nothing with or without you so just stay on the campaign trail. That will make the middle run to John and Sarah.
Even though I think this is a bad plan something has to be done or we are going to have a run on money-market mutual funds like we had last Wednesday. Then it will spread to a run on banks. Then things will get ugly.
However, there is a plan B and it involves the FDIC. It is through the FDICIA act of 1991 where the FDIC can assist a solvent bank without taking it over (i.e. IndyMac Bank). So the FDIC can assist WAMU without driving it out of business and zeroing out the common stock value.
McCain should ask for increased appropriations to the FDIC to fund banks in trouble, temporarily suspend the capital gains tax, make the Bush tax cuts of 2003 permanent, cut the corporate income tax, suspend the “mark-to-market” accounting rules, and suspend the Sarbanes-Oxley act for two years and repeal the act in 2009.
Finally, McCain needs to reform Fannie and Freddie. To wit, slowly sell off their portfolios and privatize them piecemeal without any government guarantees: or sell them off to the private sector. Then if the Dems want “affordable” housing they can do it through the FHA.
It looks like Ron Paul knew what he was talking about 6 years ago and no one did anything!!
Speeches And Statements
Congressman Ron Paul
U.S. House of Representatives
July 16, 2002
Mr. Speaker, I rise to introduce the Free Housing Market Enhancement Act. This legislation restores a free market in housing by repealing special privileges for housing-related government sponsored enterprises (GSEs). These entities are the Federal National Mortgage Association (Fannie), the Federal Home Loan Mortgage Corporation (Freddie), and the National Home Loan Bank Board (HLB. According to the Congressional Budget Office, the housing-related GSEs received $13.6 billion worth of indirect federal subsidies in fiscal year 2000 alone.
One of the major government privileges granted these GSEs is a line of credit to the United States Treasury. According to some estimates, the line of credit may be worth over $2 billion. This explicit promise by the Treasury to bail out these GSEs in times of economic difficulty helps them attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a massive unconstitutional and immoral income transfer from working Americans to holders of GSE debt.
The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase the debt of housing-related GSEs. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors.
Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges of Fannie, Freddie, and HLBB have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
However, despite the long-term damage to the economy inflicted by the government’s interference in the housing market, the government’s policies of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.
Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.
No less an authority than Federal Reserve Chairman Alan Greenspan has expressed concern that government subsidies provided to the GSEs make investors underestimate the risk of investing in Fannie Mae and Freddie Mac.
Mr. Speaker, it is time for Congress to act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors misled by foolish government interference in the market. I therefore hope my colleagues will stand up for American taxpayers and investors by cosponsoring the Free Housing Market Enhancement Act.
“Over the past two weeks, though, as Lord Melbourne once said, “What all the wise men promised has not happened,
and what all the damned fools predicted has come to pass.”
http://tcsdaily.com/article.aspx?id=092208A
Dan Riehl posted this interesting quote from BO:
http://www.riehlworldview.com/carnivorous_conservative/2008/09/i-really-dont-g.html
I Really Don’t Get This At All
As I posted recently, I watched Obama and McCain on 60 Minutes. Remembering a critical interaction in light of today’s news, I went back to find the transcript. Given Obama’s primary argument for his being a good President – expressed in his own words – how can he justify not being in Washington, DC right now? Why is he ducking such a solid opportunity to prove what he claims to be his most important qualification – one he has really yet to display on a National scale? Read the quote.
(on camera): Why do you think you’d be a good president?
OBAMA: Well, I think that when you think about the challenges we face, these are challenges that require us to look forward and not backwards.
(CROSSTALK)
KROFT: Why you? I mean, why do you think you would be a good president?
OBAMA: Well, I was going to get to that.
KROFT: Go ahead.
OBAMA: You know, I’m a, I’m a practical person. One of the things I’m good at is getting people in a room with a bunch of different ideas who sometimes violently disagree with each other and finding common ground and a sense of common direction. And that’s the kind of approach that I think prevents you from making some of the enormous mistakes that we’ve seen over the last eight years.
…
May 6, 2008
NEW YORK TIMES
Doubts Raised on Big Backers of Mortgages
By CHARLES DUHIGG
“We’ve taken tremendous risks by loosening these companies’ purse strings,†said Senator Mel Martinez, Republican of Florida and a former secretary of housing and urban development.
“They could cause an economy wide meltdown if they got into real trouble and leave the public on the hook for billions.â€
Concerns over the companies’ finances have prompted a fierce behind-the-scenes battle between nervous government officials and the two companies. Bush administration officials, the Federal Reserve and lawmakers all believe that the companies’ financial safety cushion is far too thin and have pleaded with them to raise more capital from investors.
Freddie and Fannie, which are enjoying new growth and profits, have largely resisted those pleas, people briefed on the talks say, because selling new shares could dilute the holdings of existing shareholders and drive down their stock prices. Though executives have promised to raise money this year, they refuse to specify how much and when.
Moreover, the companies are using their new found clout to push Congress and their regulator to roll back the limits that were imposed after recent scandals over accounting and executive pay, according to participants in those conversations.
Lawmakers are pushing to rein in the companies with new legislation. Senator Christopher J. Dodd, the Connecticut Democrat who leads the Banking Committee, will soon take up legislation giving the government broad authority over the companies. Lawmakers say it is likely a bill will pass this year.
“They are on real thin ice financially,†said Senator Richard C. Shelby of Alabama, the senior Republican on the Banking Committee. “And the way the law is written right now, there is very little we can do to correct that.â€
The companies say such criticisms are without merit. Their latest regulatory filings, they note, show a combined financial safety net that exceeds required minimums by $7 billion. The companies raised $13 billion from investors last year and say any future losses will be offset by new revenue and by money they have already set aside.
Criticisms Rejected
“The irony is that right now I’m seeing the best opportunities since I’ve been in this business,†said Daniel H. Mudd, chief executive of Fannie Mae, in an interview conducted last month.
The companies also say that they have not demanded anything. Rather, they say, the limitations have been dropped because of the companies’ commitment to financial transparency and aiding the housing recovery.
But others remain concerned. Though the companies’ main regulator, James B. Lockhart III, director of the Office of Federal Housing Enterprise Oversight, has voiced strong confidence in the companies, a high-ranking member of his staff said some officials had begun considering the worst.
“It’s not irrational to be thinking about a bailout,†said that person, who requested anonymity, fearing dismissal.
Despite those troubles, lawmakers had few alternatives to asking Fannie and Freddie to buy more and riskier mortgages.
“I want these companies to help with affordable housing, to help low-income families get loans and to help clean up this subprime mess,†said Representative Barney Frank, a Massachusetts Democrat and the chairman of the House Financial Services Committee. “Otherwise, why should they exist?â€
“We have to bow and scrape and haggle each time we need help,†said a senior Republican Senate assistant who spoke only on the condition of anonymity.
In a March meeting, Freddie Mac’s chairman, Richard F. Syron, bolstered those fears by saying the company would put shareholders’ interests first.
Ron Paul.. what a joke
The last thing Reid and Pelosi (and Obama) want to do is legitimize McCain. They will do all necessary to marginalize big Mac’s big play.
McCain must have several tricks up his sleve as the last thing he wants to do is be left twiddling his thumbs (with the TV cameras recording) when congress adjourns.
kittymyers. yes, I heard Obama say that and of course I was dying for the followup, ‘would you give us an example of an important issue you managed to get settled that way? of course the question didn’t come.
# VinceP1974on 24 Sep 2008 at 8:02 pm
Ron Paul.. what a joke
For someone who is a joke, he sure seems to get it right.
Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.
And
He seems to be in high demand appearing on practically all of the Cable News Channels.
Ron Paul on Glenn Beck
September 18th, 2008
Ron Paul on CNN, 9/19/08
September 19th, 2008
Dr. Paul in U.S. News and World Report
September 19th, 2008
Dr. Paul on Wolf Blitzer
Sunday September 20th, 2008
Dr. Paul on FOX Business Tonight
September 24th, 2008 by Jesse Benton
He’ll be interviewed by host David Asman at 7:15 pm ET
I disagree with Ron Paul on a whole list of things, but when it comes to the economy he is dead on.
Too bad there was no way to weed out the crazy without losing the good part too.
He hasn’t accomplished anything
I am constantly amazed that the American people think Obama is better at the economy then McCain. Obama has zero experience at economics. Actually he has zero experience at anything except arrogance. And putting the dems in power in the presidency is like putting the fox in the hen house. They are the authors of this mess all the way to Jimmie Carter’s presidency with their social engineering and Bill Clinton’s follow-up screw-ups. The idea of enacting a law forcing banks to lend to people who cannot meet their mortgage payments and 100% mortgages at that. This is just another form of income redistribution. They put into law that the have nots could have what the haves have with no effort on their part and we are paying for it now.
No one ever helped me with my mortgage. I paid them all myself and had to do without to do so and never got a 100% low interest mortgage. I have funds in money markets that I saved all my life and will probably lose all of it. You bet I’m angry at the dems with their stupid vote buying tactics that will be the detriment to all of us. And here they are bucking the plan Bush had. They admitted they don’t know what to do about this mess. I do. Get out out of the way.
I see Obama is ahead in the polls now. Folks, the dems want the economy to fail. That way they can bring socialism in easier. The whole point of socialism is to destroy the economy so they can build the country up again under their rules.
Delicious scenario:
Obama plans to debate the empty chair whilst his Democrat colleagues keep McCain tied up in DC.
And Sarah Palin shows up.
Either Obama shouts “Run away! Run away!” or he risks Palin winning the debate–which would be the final nail in the coffin of the Obama campaign.
Here is a perfect quote for the current proposed bailout!!
“The bad news is that painless lessons tend not to stick.â€
— Jesse Eisinger
SBD
McCain does himself no favors when he gives incoherent and contentless statements.
I want McCain to win.. but my God… he’s embarrassing.