Occupy Wall Street

"The Occupiers have the wrong address. The subprime crisis was designed in Washington, not New York."

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The Cato Institute's Tom Palmer reviews some of the complaints made by the Occupy Wall Street protesters and helps identify the culprit:

What caused the crisis, the indebtedness, the unemployment, the stagnation? The culprits are state agencies and enterprises, including our Federal Reserve (our government's bank), Federal Housing Administration (FHA), Federal National Mortgage Association (Fannie Mae), and Federal Home Loan Mortgage Corporation (Freddie Mac), which jointly flooded the country with cheap credit and encouraged and subsidized unsound banking and subprime mortgages, all to encourage wider home ownership, paper prosperity, and cozy relationships with their cronies.  We got a housing bubble, mountains of unpayable debt, and a financial crisis. Thanks, Uncle Sam.

The Occupiers have the wrong address. The subprime crisis was designed in Washington, not New York.

To follow Reason's ongoing coverage of Occupy Wall Street, click here. Check out former New Mexico Gov. Gary Johnson's visit to the protests in the video below.

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  1. Glass-Steagall!!1!1!1!!

    It was the repeal of Glass-Srteagall!!!!!!1!11!!!!1!

    Deregulation!!1!!!!!!11!

    Corporater greed!!!11!!!!1!

    1. So the government forced bankers to to use complex financial instruments that they didn’t understand? Or forced the rating agencies to issue bogus ratings? Or forced a majority of private banks to begin issuing sub prime mortgages…because it was profitable.

      How about this, you “capitalist” puritans. Maybe the government AND private corporations messed up.

      Banks have too much power (Both MARKET and GOVERNMENT) and libertarians are far to appeasing to the accumulation of vast amounts of market power because they believe it was “justly” earned.

      Blash blah wababa toot fart. I’m tired of this. Libertarianism, at least the REASON type, is vicious cynicism masked as realism and justice.

      I can’t do libertarianism anymore. The more I read, the less faith I have in the market as a just organizer of goods and empowerment. I just wish that didn’t leave the government as the only answer. At the very least, I know I have a voice in government, even if its on the verge of being inconsequential.

      Are there any libertarians anymore that can convince me that private property is the end all, be all of morality and justice?

      1. Are there any libertarians anymore that can convince me that private property is the end all, be all of morality and justice?

        What is the Right of Property?

        The right of property is simply the right of dominion. It is the right , winch one man has, as against all other men, to the exclusive control, dominion, use, and enjoyment of any particular thing. [*16]

        The principle of property is, that a thing belongs to one man, and not to another mine, and thine, and his, are the terms that convey the idea of property.

        The word property is derived from proprius, signifying one’s own. The principle of property, then, is the principle of one’s personal ownership, control, and dominion, of and over any thing. The right of property is ones right of ownership, enjoy?ment, control, amid dominion, of and over any object, idea, or sensation.

        The proprietor of any thing has the right to an exclusive ownership, control, and dominion, of and over the timing of which he is the proprietor. The timing belongs to him, and not to another man. He has a right , as against all other men, to control it according to my own will and pleasure; and is not accountable to others for the manner in which he may use it. Others have no right to take it from him, against his will; nor to exercise any authority, control, or dominion over it, without his consent; nor to impede, nor obstruct him in the exercise of such dominion over it, as he choose to exercise. It is not theirs, but his. They must leave it entirely subject to his will. His will, and not their wills, must control it. The only limitation, which any or all others have a right to impose upon his use and disposal of it, is, that he shall not so use it as to invade, infringe, or impair the equal supremacy, dominion, and control of others, over what is their own.

        The legal idea of property, then, is, that one thing belongs to one man, and another thing to another man; and that neither of these persons have a right to any voice in the control or disposal of what belongs to the others that each is the sole lord of what is his own; that he is its sovereign; and has a right to use, enjoy, and dispose of it, at his pleasure, without giving any account, or being under any responsibility, to others, for his manner of using, enjoying, or disposing of it.

        This right of property, which each man has, to what is his own, is a right , not merely against any one single individual, but [*17] it is a right against all other individuals, singly and collectively. The right is equally valid, and equally strong, against the will of all other men combined, as against the will of every or any other man separately. It is a right against the whole world. The thing is his, and is not the world’s. And the world must leave it alone, or it does him a wrong; commits a trespass, or a robbery, against him. If the whole world, or any one of the world, desire anything that is an individual’s, they must obtain his free consent to part with it, by such inducements as they can offer him. If they can offer him no inducements, sufficient to procure his free consent to part with it, they must leave him in the quiet enjoyment of what is his own.

        – Spooner

      2. Maybe the government AND private corporations messed up.

        You can tell the difference?

      3. “So the government forced bankers to to use complex financial instruments that they didn’t understand? Or forced the rating agencies to issue bogus ratings? Or forced a majority of private banks to begin issuing sub prime mortgages…because it was profitable.”

        The question is:
        “How much can we distort the market before the market becomes harmful to the participants?”
        The answer is:
        “Less than the mortgage market *was* distorted.”

        And as a result we have simpletons like Typical claiming:
        ” I can’t do libertarianism anymore. The more I read, the less faith I have in the market as a just organizer of goods and empowerment.”, ignoring the distortion.
        Good move, Typical!

      4. Private property is the key to entrepreneurship, and wealth creation. Look at any country that suffers from chronic poverty, and you will find a country that does not have a working means of securing private property rights. Whether is be the inability to secure a deed to parcel of land, or the permits to lawfully claim ownership to a structure created on the land owned by an individual.

        Without property rights, an individual does not have the ability to leverage an asset from one form to another. How can a person use his or her home as collateral to secure a loan to start their own business, if the legal system does not provide them a means to represent that they own the home, thereby representing that they hold a real asset?

        If you really want to understand the importance of private property rights, and the relationship between poverty, and the lack of property rights, read “The Mystery of Capital” by Hernando de Soto.

      5. Maybe the government AND private corporations messed up.

        They didn’t mess up at all.

        It went exactly as planned, well except for the collapse, but neither was hurt by that.

        The financial industry wasn’t victimized by government. Both were co-conspirators.

        You’ve bought into a false dichotomy that is being pushed by both sides of that conspiracy. Namely that what happened was in any way the result of free market interactions .

      6. So the government forced bankers to to use complex financial instruments that they didn’t understand? Or forced the rating agencies to issue bogus ratings? Or forced a majority of private banks to begin issuing sub prime mortgages…because it was profitable.

        How about this, you “capitalist” puritans. Maybe the government AND private corporations messed up.

        Uh, have you ever heard a libertarian say that banks should have been allowed to fail? Yes? Well, wouldn’t you figure such a libertarian believed that private companies also messed up?

        I mean, isn’t the entire idea behind creative destruction that companies aren’t perfect, and some should fail so that other, better ideas have room? If anything, it’s libertarianism as opposed to common American corporatism that believes private companies can be irredeemable; otherwise, shouldn’t we be advocating bailouts?

  2. So what if the Fed, Fannie, Freddie, and the FHA were the cause of the financial crisis? Korprations, and da filty richers are still to blame, because they force members of congress to take their money, just like they force us to buy HDTV’s, iPhones, PS3’s, Big Mac’s, and gasoline.

    Seriously, do you expect congress to resist a hand out? That would be un-patriotic.

    1. No one forced me to buy a PS3, but Elder Scrolls forces me to boot it up more than any person should.

      1. I thought it wasn’t being released until Nov. 11?

        1. I just recently went on an RPG kick and decided to pick up Oblivion and DA:Origins. Started with Oblivion since Skyrim is coming in November and wanted to test Oblivion to see if it would be worth purchasing the new one. So of late, all free time I have is dedicated to the mission of finishing that one in time for the release of Skyrim.

          1. I envy you if you have enough free time to play as open-world of a game as Oblivion. Shit, I have so little time I’ve been able to play about one hour of The Witcher 2 on my new game box (which can do Witcher at Ultra Spec graophics setting without going frame retard; I maxed every setting in Borderlands and it doesn’t even breathe hard).

            1. I have the benefit of working out of the house, affording me a little bit of luxury time when I get all caught up.

              1. Jerk. I don’t know what I’m going to do when Diablo III comes out. Or when Borderlands 2 comes out.

  3. why does someone believe that confusing OWS or liberals/Democrats (and isn’t all that redundant?) with facts will change anything? Obama is again this election cycle the leading recipient of Wall St campaign cash, more than the Repub field combined. But no on the left has an issue with that.

  4. Washington and New York are pre-op Siamese twins; the surgery would Sophie’s choice one for sure

  5. Cue the Troll Squad.

    1. Any mention of Tom Palmer calls for a Mises/Raimondo/CATO/cosmotarian war. It’s the libertarian way.

  6. Breath being wasted.

    1. Came here to say that.

    2. Nah, that breath is warming my scrotum quite nicely, thanks.

    3. Nah, that breath is warming my scrotum quite nicely, thanks.

  7. I was just thinking about how “Occupy Pennsylvania Avenue” would go over. I bet the press would savage it. Not to mention the DC police.

    1. I’m thinking more “The US Military” than “DC Police”.

      TEH PREZZIDENTS AND CONGRESSMENZZ ARE IN TEH DAYNJURRRAA!!!!!111!!

  8. Yes financial banks were innocent little victims of all the government policies they bought. Government had to forcefeed them those profits!

    1. like the wall streeters and bankers had to force those fat cash stuffed manila envelopes under the table to Obama’s reelection committee. please. Gotta keep the righteous wars going and bailout money coming.

    2. You’re going to make the loans we tell you to make, see? What? You think that might be risky? Tell you what – we’ll work something out on the backend to take care of you. But if this all goes to shit, we never had this conversation.

    3. “Government had to forcefeed them those profits!”
      No, shithead. No one has to ‘forcefeed’ profits. All they have to do is distort the market far enough that profits result from toxic incentives.

  9. “The Occupiers have the wrong address. The subprime crisis was designed in Washington, not New York.”

    I’m sorry Mr. Palmer, but you have committed a serious crime: speaking the truth. In so doing, you might have caused our youth (and recycled hippies) to think clearly. This can NOT be tolerated.

  10. Cain is a Godfather in the Bankster cartel!

    Perry is a Bilderburger!

    Bachmann is an avid listener but she is bats* * * crazy.

    Santorum is a puppet for the NAZI-youth Pope.

    Romney is part of the LDS conspiracy to have all men wearing dark suits and all women barefoot/pregnant in their kitchen.

    Gingrich is a Neo-Con stooge for K-Street.

    Huntsman is a UN useful idiot.

    You’re all crazy! Ron Paul is the only one!

    Ron Paul! RON PAUL!
    RON PAUL! Ron Paul!
    Ron Paul! RON PAUL!
    RON PAUL! Ron Paul!
    Ron Paul! RON PAUL!
    RON PAUL! Ron Paul!
    Ron Paul! RON PAUL!
    RON PAUL! Ron Paul!
    The world is going to end!
    Doom! DOOM! Doom! DOOM!
    DOOM! Doom! DOOM! Doom!
    Ron Paul! RON PAUL!
    RON PAUL! Ron Paul!

    1. Oh, wait’ll Max gets a load of YOU

  11. I was just watching Steve Wynn rip Obama a new asshole on Cavuto.

    1. Did he apologize for helping Obama get elected? Did he explain what he thought Obama wouldn’t do that he has done as President? Did he explain what he thought Obama would do that hasn’t done?

      1. He said Harry Reid hung up on him.

  12. Detailed explanation of the causes of the crisis here.

    Surprisingly, it wasn’t all the fault of Democrats and poor black people. Unless Wikipedia is part of the liberal conspiracy to oppress poor innocent Republicans and bankers.

    1. of course it wasn’t ALL the fault…. blame can be spread, but some groups, notably politicians in general, billionaire banking and other corporate and union recipients of bailouts should bear the brunt of the blame, being instigators and enablers and direct bailout beneficiaries.

    2. Wikipedia is not a source

      1. More so than anything you’re gonna choose to read.

        1. “More so than anything you’re gonna choose to read.”
          Yes, shithead:
          “When a bank originates a low-risk mortgage, why would the bank pay Freddie Mac a fee to guarantee that mortgage against default?”
          http://www.cato.org/testimony/ct-ak-20081209.html

    3. Wikipedia, seriously?

      Fuck you.

    4. “Detailed explanation of the causes of the crisis here.”
      Shithead’s attempt to justify shithead’s ignorance right there.

    5. For sure it was both crony democrats AND crony republicans. And for sure the bankers were greedy as all fuck. But the solution is to get rid of crony politicians not to blame everyone who works on wall street.

      1. Can’t get rid of crony politicians. That is their nature. Best to limit their power as much as can be done, and set differing sets of politicians against each other for the execise of the power allowed.

        1. i.e. follow the Constitution, as written

  13. The Financial Con Of The Decade Explained So Simply Even A Congressman Will Get It

    http://www.zerohedge.com/artic…..ill-get-it

    1. Wow. I knew it was bad, but not that bad. Any chance a liberal might comprehend this? I mean, the ones who weren’t in on it.

  14. I remember, not so long ago, when (who was it, the Ad Council?) actually ran ads on TV, targeted at minorities and other trailer trash, equating home ownership with “responsibility.” The worst one that I can recall was a young woman standing in front of a shoe store window, congratulating herself for not passing up a pair of new shoes that she liked, so she could go into massive unsustainable debt buying a house instead!

    The government literally and directly told Americans (using public money, of course) that buying homes they couldn’t afford was a mark of maturity and personal responsibility. That home ownership was proof of arrival, if not adulthood.

    1. It’s the same correlation-causation mistake that led to the higher ed bubble. Responsible/smart people own homes/graduated college so if we can get everyone to do that then everyone will be responsible and smart. Humans don’t work that way of course, but admitting that half the population is irresponsible and/or stupid isn’t a great political strategy.

  15. It’s the same correlation-causation mistake that led to the higher ed bubble.

    “Cargo cult.”

    Like when cosmotarians reactionarily assume that an Egyptian military/theocratic coup or a nationwide lefty Jew-hate fest must be spontaneous outpourings of (misguided!) libertarianism, because the people doing them have iPhones.

    I blame Postrel.

    (This ends the drinking game.)

    1. cosmotarians reactionarily assume LOL

      because the people doing them have iPhones.
      To be fair, many of the iPhones were personalized. That’s like catnip for cosmos.

  16. Government’s also responsible for the wealth and income gap… the more basic reason for the protests.

    The richest 400 people in America have more wealth than the bottom 150 million. They pay an average of 17% in taxes partly because of the low rate for capital gains–absurdly taxed lower than income on labor.

    Yes they should be protesting Congress for letting this absurdity persist. But it doesn’t matter who they protest, the only thing that’s gonna change anything is voting and electing people willing to do it.

    What’s that libertarians? Every cent of wealth in the hands of the wealthy is earned, and we can’t possibly raise any taxes ever? I see why you prefer to play mindless blame games to offering policy ideas.

    1. If the poor don’t want to pay for the services they want, then fuck them.

    2. Tedious Tony, very tedious.

      Your the first sentence of your second paragraph is a good example of something we call fact.

      The rest is recycled socialism.

    3. “Government’s also responsible for the wealth and income gap”
      And so shithead proposes MORE GOVERNMENT!

    4. Bullshit the top earners paid 17% in taxes. Jesus tap dancing Christ, just go to the IRS website to see what % they ACTUALLY paid.

    5. “They pay an average of 17% in taxes partly because of the low rate for capital gains–absurdly taxed lower than income on labor.”

      The real value of a realized capital gain can be completely wiped out by inflation, especially for long term investments. There are some very good reasons why capital gains are taxed at a lower rate, you may disagree with them but that does not make them absurd.

      What is absurd is enacting a tax policy that will discourage investment in an already anemic economy to satisfy the progressives’s quixotic quest for a mythical “fairness”.

      1. Not to mention that the initial investment of capital was taxed as income. Why are they taxing capital gains at all? It would be like IRS agents hanging around Vegas looking for big winners to tax.

        Oh yeah, I forgot they double tax those people as well when they gambled their after-tax income on a market ( be it the NYSE or the craps table at Caesar’s Palace) they chose to assume risk in.

        Just be honest about it, and admit you just want to steal from these people. You’ll at least be able to look yourself in the mirror, Tony.

        1. Wealth envy solves nothing, Tony. Never has, never will.

        2. IRS agents do hang around Vegas looking to tax big winners. Capital gains is income like any other… the only difference is it doesn’t take any labor. Double (triple, quintuple) taxation is a giant idiotic lie. My income once belonged to someone else who was taxed, and on and on.

          The important thing is what results: income taxed higher when it’s the result of labor than capital gains means our tax codes rewards you merely for having capital and hence punishes you for doing work. The opposite of the protestent ethic you guys base your entire economic system on.

    6. The richest 400 people in America have more wealth than the bottom 150 million.

      In 2010 the top 400 had a total of 1.37 trillion of roughly 55 trillion of total wealth. The bottom line is Tony is using unqualified numbers for shock value rather then actually putting forth a rational argument.

      1. You guys would never do anything like that, such as say half the country doesn’t pay income taxes, meaning they’re getting some kind of deal.

  17. Tony, like all liberals, doesn’t respect the sovereign citizen’s common law rights. Violating the individual’s rights is central to all liberal programs. I’m not defending our current mixed economy, I just don’t blame all the bullshit on the capitalist half.

  18. Free loaders are those who benefit from social practice and can get away with no contribution to their maintenance

    1. That would include the 43% of workers who pay no federal income taxes, would it not?
      I’d bet that a large number of 99%ers are a part of that group.

      1. About 42.57% by my calculations.

        1. That was stupid. I completely flipped the fraction – it should be 43.43%. It’s clearly bedtime.

  19. so the problem is too much regulation?
    oh wait, you’re serious.
    let me laugh harder.

    1. I’ll admit that more regulation would potentially lead to more jobs, since firms would have to hire people to untangle compliance issues. For maximum effect the additional regulations should be as complex as possible. I’ll just point out that the resulting measures are by definition non value-added.

  20. Good to see Pete Seeger marching in solidarity with Occupiers.

    1. …is out there looking for the Hammer and Sickle gang’s table.

      1. Hey, Occupier… still being a little pussy, eh? Pissed off because you have to pay your own fucking bills?

        1. Oh, and Pete Seeger doesn’t deserve a bullet in the head… that’s a waste of a good bullet.

  21. This is what is known as a “just so story.”

  22. Jerry Seinfeld style:

    Ever notice that on cable television we went from frick to frack when it comes to fuck?

    Why?

    Frick was a much better word to use for fuck than frack because frick rhymes with dick or prick of which both are used for fucking.

    And don’t get me started on those American Autumn Wall St. protesters.

    I don’t think there’s any common sense left in the world so goodbye. I’m on my way to go protest fracking shale because its fricking the environment.

  23. A comedy sketch from the headlines: Imagining how it all went down:

    Van Jones: Okay, ideas anybody.

    Professor #1: I think I could get some of my hippie students and their friends to protest Wall St.

    Professor #2 Great idea, I’m going to text some of my students from my iPhone and tell them they should be protesting evil corporations whose products are made in China and sell stock on Wall St.

    Van Jones: Excellent!

    Andy Stern: I can get some of my people there.

    Trumpka: Me too.

    JournoList: Hold back boys we wouldn’t want it to look like astroturf.

    Debbie Dolberman: Once the MSM sets the narrative about how spontaneous and grassroots the OWS crowd has sprung up we could get Nancy and Barrack to comment on it.

    Nancy: Okay.

    Tumpka: That’s the cue for us to come in Andy.

    Van Jones: Excellent. A very productive meeting on this one. We wouldn’t want another CBS incident. Has anyone admonished CBS and that reporter yet?

    Nancy: My husband and I need a distraction

    Al Sharpton: When will we tell them it should be about redistributing the money?

    Bill Keller: I’ll start setting the narrative that the Tea Party is finished.

    Charlie Rose: I’ll coincide with that and and call OWS a growing phenomenon.

    JournoList: Once all that’s rolling we’ll keep pounding the talking points.

    Harry: I’ll prevent the Senate from voting on the Barrack’s jobs Bill while all this is going on. I’ll need help blaming Republicans since the bi-partisan support is against us.

    JournoList: No problem and no different than business as usual.

    Al Sharpton: Money…when will we tell them it should be about redistributing the money?

    David Axelrod: Al follow my cue and then organize. Barrack will say “Republicans Don’t Want A Place Where People “No Matter What They Look Like” Can Succeed”

    Nancy: I will stir up their passions with stuff like they’re voting to let women die on the floor.

    JournoList: Great idea Nancy. That one helps get out the feminist vote every time. Women like “shiny things”.

    Whoopi: I can tell women George Bush er….Republicans want to steal their uteruses.

    Sean Penn: Garofalo and the rest of us will set the meme the Tea Party is the “Get The N-Word Out Of The White House Party”.

    Bill Maher: Excellent Sean! Most excellent! I will call Cain and republicans racist and poke fun at them.

    Al Sharpton: I will add to the meme: “We Will Get The Jobs Bill Done In The Street”.

    David Axelrod: Excellent guys. The WH messaging will be OWS “Will Be An Issue In This Campaign”.

    Valerie Jarret: We need to crush the idea MLK would have supported Cain. Barrack will tell the people at the ceremony that MLK Jr. Would Have Supported Occupy Wall Street.

    Lawrence O’Donnell: I will imply a brilliant man like Cain should have been drafted, or perhaps volunteered to be considered a patriot – rather than work for the Navy in a private capacity on rocket science where the Navy wanted him solving problems on an important project. I can also push the meme that he’s an Uncle Tom for thinking for himself and unlike 90%+ of African Americans. I will do this from atop my white horse. Perhaps MSNBC should hire Al to provide me cover.

    Al Sharpton: That’s what I do, I know how to crack the whip on those who dare leave the Democrat plantation. How much are they going to pay me?

    Van Jones Shut up Al! One last thing. Can you JournoList within the press corpse please keep ignoring the Fast and Furious scandal.

    WH Press Corpse Indeed!

    JournoList We concur, and don’t worry Nancy. Tell your husband too.

    David Axelrod: Once all this is rolling Barack will hop on the bus and hit the road with the standard organizing talking points like “GOP Wants “Dirtier Air, Dirtier Water, Less People With Health Insurance”.

    Martin Bashir David, I’ll follow your lead with “Cain Doesn’t Want To Be “Associated With African-Americans.”

    Comrade Brzezinski I’d suggest a Bolshevik type appraoch like “Make Rich Known Publicly To Pressure Them To Give Back”

    Eugene Robinson: I call my meme “Defend Wall Street” and go with the theme is not likely to be a winning campaign slogan in 2012. For Republicans, this is an obvious problem.

    Van Jones: Very productive people. I mean that..

    Bernie Sanders: We Need To Address The Issue Of The Rich Getting Richer

    Lawrence O’Donnell: I’d like to add Republicans still don’t have a jobs plan, they’ve never had a jobs plan because Republicans are lying liars that lie even when lying about lying that’s the kind of liars the lying liars are.

    Rachel Maddow: I’ll push this one “Republicans vote against employing more teachers and first responders” and since we believe the American people are too stupid to figure out the locals already pay taxes to cover those type of things in their cities.

    Van Jones Very good Rachel.

    Al Franken: And also remember we are good enough, smart enough and gosh darn it, people like us. We are wonderful people…..just ask us.

    Rachel Maddow: I’ll also go with Republicans think poor people are scam artists.

    David Axelrod: Excellent Barack will use the standard Alinsky playbook on his bus tour which we can film for campaign ads. Barack will also tell the people not to believe their lying eyes and that all the choices he made were the right ones. I’ll try and keep a straight face and plant a seed that the election is going to be a close one.

    Debbie Dolberman: I will project all our demagoguery onto republicans.

    Michael Moore: Will Barrack be using the styrofoam columns again? I will make a documentary of all this with a similar name as my Fifth one but call it “Bowling for Columnlike” instead.

    1. **hearty applause**

      1. Hey Bill O’Really, Dr. K., FOX News, do you believe Our Creator allows freewill?

        FOX Choir Why do they even have all these debates? Don’t the people know Romney is inevitable….it’s inevitable that Romney is inevitable…Romney is the only inevitable candidate….Romney…Romney…..Romney….

  24. Kindle excerpts from book by NYT Reporters , explaining how Democrats have collapsed the global financial system.

    From the book “Reckless Endangermnet”

    “When we boost the number of homeowners in our country,” Clinton said in a 1995 speech, “we strengthen our economy, create jobs, build up the middle class, and build better citizens.” Clinton’s prediction about the middle class was perhaps the biggest myth of all. Rather than building it up, the Partners in Homeownership wound up decimating the middle class.Read more at location 134 ? Delete this highlight

    Note: this is a great must read book Edit this note

    -Truly this was an unprecedented partnership. But what few have recognized is how the partners in the Clinton program embraced a corrupt corporate model that was also created to promote homeownership. This was the model devised by Fannie Mae, the huge and powerful government-sponsored mortgage finance company set up in 1938 to make it easier for borrowers to buy homes in Depression-ravaged America. Indeed, by the early 1990s, well before the government’s partnership drive began, Fannie Mae had perfected the art of manipulating lawmakers, eviscerating its regulators, and enriching its executives. All in the name of expanding homeownership.Read more at location 146 ?

    All the critics were either willfully ignored or silenced by well-funded, self-interested, and sometimes vicious opposition. Their voices were drowned out by the homeownership trust, a vertically integrated, public-private housing machine whose members were driven either by ideology or the vast profits that rising homeownership would provide. The consortium was too big and too powerful for anyone to take on. Its reach extended from the mortgage broker on Main Street to the Wall Street traders and finally to the hallowed halls of Congress. It was unstoppable.Read more at location 182 ? Delete this highlight

    Note: this is called fascism Edit this note

    -Because housing finance was heavily regulated, government participation was vital to the homeownership push. And Washington played not one but three starring roles in creating the financial crisis of 2008. First, it unleashed the mortgage mania by helping to relax basic rules of lending that had been in place for decades. Then its policymakers looked the other way as the mortgage binge enriched a few and imperiled many. Even after the disaster hit and the trillion-dollar bailouts began, Congress and administration officials did little to repair the damaged system and ensure that such a travesty could not happen again.Read more at location 188 ?

    “Clinton was clearly coordinating with him?they had the same goals at the same time,” said Edward Pinto, former chief credit officer at Fannie Mae, who is a consultant. With other high-level Democrats on his side, Johnson beat back all attempts to rein in Fannie Mae’s operations or growth plans. Although Johnson left Fannie Mae’s executive suite in 1999, his stewardship of the company not only opened the door to the mortgage meltdown, it virtually guaranteed it, former colleagues said.Read more at location 271 ? Delete this highlight

    Note: All you Democrats who blame Bush for the subprime crisis are simply deluded fools or dishonest frauds. Edit this note

    -Fannie Mae was on sound financial footing when Maxwell retired in January 1991, in spite of the massive losses the company had suffered in the savings and loan crisis. Maxwell told a Post reporter “it would take an event of such cataclysmic proportions as to result in a change of our form of government to put this company under.” The cataclysm was, in fact, just fifteen years away.Read more at location 400 ?

    Among Johnson’s first public initiatives was a $10 billion commitment by the company in 1991 to provide financing for lower-income borrowers. Called the “Open Doors to Affordable Housing,” it was one of many Fannie Mae programs designed to blunt criticism of Johnson’s aggressive growth plans. The idea, according to former company employees, was to finance so much low-income housing that Fannie Mae’s government perquisites could never be taken away.Read more at location 472 ?

    In September 1992, for example, Texas congressman Gonzalez withdrew the new regulatory bill from the House floor as it was about to be debated. Gonzalez did so “to allow more time for Fannie Mae to pursue changes in the bill,” a staffer told the New York Times. Those changes involved capital requirements; Johnson believed the bill, as written, gave too much discretion to regulators on the matter of such requirements and he had voiced his alarm over it.Read more at location 570 ?

    Just six months after its questionable report was published, the Boston Fed put out a twenty-eight page guide for banks called “Closing the Gap, a Guide to Equal Opportunity Lending.” It was a blueprint for banks showing them how to relax their lending practices to eliminate discrimination. “Special care should be taken to ensure that standards are appropriate to the economic culture of urban, lower-income, and nontraditional consumers,” the guide said.Read more at location 737 ?

    The Boston Fed went on to advise lenders that to facilitate minority lending, they should track the more unusual aspects of such loans and make exceptions to their normal standards. “Loan production staff may find that their experience with minority applicants indicates that the institution’s stated loan policy should be modified to incorporate some of the allowable compensating factors,” the guide urged.Read more at location 755 ? Delete this highlight

    Note: in 1993 the fed was telling banks to treats blacks differently for mortgages Edit this note

    -While some of those who dealt with Fannie thought that the company was forced to lower its standards by the prevailing political winds, some who worked inside the company contend that Johnson worked closely with the community groups to argue for relaxed lending. After all, lower underwriting standards meant Fannie could grow its portfolio and, of course, its earnings.Read more at location 776 ? Delete this highlight

    Note: groups equals obama Edit this note

    -But in scrutinizing FDICIA, Todd had uncovered an obscure amendment to the law that dramatically expanded the federal safety net, increasing the likelihood of taxpayer bailouts in the future. While previously only commercial banks who were members of the Federal Reserve System could request emergency financial support from the central bank in times of crisis, the amendment to FDICIA increased the availability of Fed assistance to include investment banks and insurance companies.Read more at location 806 ? Delete this highlight

    Note: chris dodd included investment banks in bailoutable sections Edit this note

    -Banks did not create pools of loans and sell them to investors like Fannie and Freddie did. They either sold them to the government or kept them. All this changed, however, in June 1993 when United Companies Financial, a publicly traded mortgage lender based in Baton Rouge, Louisiana, cobbled together its first mortgage pool.Read more at location 936 ? Delete this highlight

    Note: fannie and freddie get their first competiton Edit this note

    -In 1994, some $40 billion in subprime loans was made. Just five years later, annual issuance of subprime mortgages would rise to $160 billion.Read more at location 987

    According to OFHEO’s 1996 annual report, the percentage of loans the company purchased with a loan-to-value ratio of greater than 90 percent rose from 6 percent in 1992 to 19 percent three years later.Read more at location 1448

    -Experimentation and the financial service industry’s determination to tap new markets has long proved that credit can be extended well beyond what skeptics at any given time in our history deemed feasible. These past few years have seen the industry accepting new challenges and addressing lingering issues that had impeded progress. ?EUGENE LUDWIG, Comptroller of the Currency, May 10, 1996Read more at location 1763

    -Under pressure from dealers, used-car finance companies began to employ and rely on the same underwriting technologies and credit scoring models, like Fair Isaac Corporation scores, that had been developed in the mortgage industry.Read more at location 1846

    -Although Mercury stood out in this industry, it was not alone. By the end of 1997, the number of subprime used-car-financing companies had increased from about 25 to about 170. Among these were subprime companies set up by auto giants Ford and General Motors, providing dealers with even more certainty that they would rarely have to turn away a potential customer.Read more at location 1854

    -But the clearest signal that big financial players would no longer be allowed to fail came in the late summer of 1998. That was when the Federal Reserve Bank of New York, the most powerful regional bank in the Federal Reserve system, brokered a rescue of a huge and troubled hedge fund called Long-Term Capital Management.Read more at location 2035

    -In a dramatic decision, the Fed summoned every major Wall Street firm that did business with the fund to its ornate and fortresslike downtown headquarters.Read more at location 2040

    -Nevertheless, the rescue was deemed a success and on February 15, 1999, Time magazine published a cover story titled “The Committee to Save the World: The Inside Story of How the Three Marketeers Have Prevented a Global Economic Meltdown?So Far.” Pictured on the cover were Greenspan, Rubin, and Summers, looking smug and self-satisfied.Read more at location 2046

    -Regulators no longer needed to stand over these institutions with a whip, the Fed argued. After all, what banker in his or her right mind would do something crazy enough to blow up their company?Read more at location 2067

    -The watering down of capital requirements and other restrictions on bank operations began in the mid-1990s with actions taken by representatives of the ten major countries that make up the Basel Committee. This group, named for the city in Switzerland where it meets, consists of central bankers from each country as well as top bank supervisors.Read more at location 2081

    -One of Cuomo’s earliest moves was to proclaim that Fannie and Freddie should buy more subprime mortgages. “GSE presence in the subprime market could be of significant benefit to lower-income families, minorities, and families living in underserved areas,” he said.Read more at location 2130

    -With such marching orders from their regulator, Fannie and Freddie were being told to lower the underwriting standards for the loans they bought or packaged into securities. As such, Fannie and Freddie would no longer restrict themselves to good-quality loans. Pushed to buy subprime loans, the degradation of underwriting standards was now under way.Read more at location 2133

    -When Cuomo announced his initiative in 1999, he raised these goals. Fannie and Freddie were already buying 42 percent of their mortgage loans to benefit low- and moderate-income families, but under Cuomo’s new rules, that requirement would rise to 50 percent.Read more at location 2159

    -And if Fannie and Freddie failed to meet these goals? Cuomo held out a stick: possible penalties of $10,000 for each day that the targets remained unmet.Read more at location 2172

    -Some $160 billion in subprime loans would be underwritten in 1999, up from $40 billion five years earlier. And in another four years, that figure would jump to $332 billion. Many of these loans wound up in Fannie’s and Freddie’s portfolios. By 2008, some $1.6 trillion of toxic mortgages, or almost half of those that were written, were purchased or guaranteed by Fannie and Freddie.Read more at location 2182

    -And in 1998, top Fannie officials had begun manipulating the company’s results by dipping into various profit cookie jars to produce the level of income necessary to generate bonus payouts to top management.Read more at location 2197

    -In 1998, Fannie’s board was burnished by the addition of Stephen Friedman, former chief executive of Goldman Sachs, the prestigious Wall Street firm. Brokerage firms like Goldman Sachs flourished from the fees generated by underwriting securities issued by Fannie and Freddie, with fees totaling $100 million a year. With a former Goldmanite on Fannie’s board, Goldman was likely to gain even more of the favors the company had to dish out.Read more at location 2231

    -The accounting fraud at Fannie went undiscovered until 2005 when an investigation by OFHEO unearthed it. In a voluminous, intensely detailed 2006 report, OFHEO noted that if Fannie Mae had used appropriate accounting methods in 1998, the company’s performance would have generated no executive bonuses at all.Read more at location 2253

    -During his years at Fannie Mae, making a cool $100 million, he made sure to arrange for an inflation-adjusted consulting contract with the company that began at $390,000 a year. His pension?around $900,000 a year?was secure and so were company-paid perquisites such as a car and driver for him and his wife, office space at the prestigious Watergate complex, and the services of two employees.Read more at location 2281 ? Delete this highlight

    Note: jim johnson Edit this note

    In a speech in October 1999 to the Bond Market Association in New York City, Ferguson outlined his preference for less, not more, regulation. “Heavier supervision and regulation of banks and other financial firms is not a solution, despite the size of some institutions today and their potential for contributing to systemic risk,” he said. “Increased oversight can undermine market discipline and contribute to moral hazard.Read more at location 2373 ? Delete this highlight

    Note: clinton appointee to the new york fed Edit this note

    As the FDIC researchers neared publication of their paper, they sent it to the Fed for comments as a courtesy among colleagues. Ferguson immediately tried to silence the critics and contacted Donald Powell, the chairman of the FDIC. His message: Do not publish theRead more at location 2389 ? Delete this highlight

    Note: in 2003 clinton fed appointee blockd fdic report on capital reserve risks Edit this note

    Then, in the fall of 2001, the Treasury made a move that pushed investors to increase their already sizable holdings in mortgage securities issued by Fannie and Freddie. Stunning most investors, the Treasury announced on Halloween of that year that it would stop issuing its benchmark long-term bonds, those with 30-year maturities.Read more at location 2571

    -Angered by Fannie’s over-the-top response to the previous hearings, Baker opened round two proclaiming: “This is a very important hearing. It literally is a battle over huge fortunes. I speak to the potential liability of taxpayers if everything is not run perfectly. The potential for systemic risk is enormous.”Read more at location 3075 ? Delete this highlight


    -Those who argued that Fannie and Freddie were thinly capitalized and poised to create some future crisis were fear mongering, Brendsel said. “Not only is Freddie Mac highly skilled at managing risk, we are extremely well-capitalized for the risks we take. Freddie Mac holds enough capital to withstand 10 years of severe, adverse economic conditions?much like the Great Depression.”

    -As evidence, Brendsel pointed to a report recently commissioned by Freddie. It had hired William Seidman, the respected former head of the FDIC, to look at the company’s capital requirements. Quoting from the report, Brendsel said: “The risk-based capital standard set forth in the 1992 G.S.E. Act creates a very stringent capital standard, one that could be devastatingly stringent if applied to most other financial institutions.” He delivered the coup de grace: “The fact is, if the thrifts had held as much capital relative to risk as Freddie Mac does, there would never have been a thrift crisis.”Read more at location 3085

    -As for the company’s critics? “Let me emphasize that our concern is not with congressional oversight, the hearings of this subcommittee or proposals to improve the housing finance system,” he said. “Our concern is with any actual change in the law that would weaken our charter or impose regulatory burdens that would raise our costs of providing capital to the housing finance system.”

    -Bob Riley, an Alabama congressman, immediately challenged Raines. He pointed out that Fannie had not only taken issue with Baker’s introduction of legislation that would eliminate the $2.5 billion Treasury tie, the company had also attacked a Treasury undersecretary for having harmed homeownership simply because he supported cutting that financial bond. How much had the discussion of the bill actually moved interest rates as Fannie executives had claimed? Riley asked Raines.

    -Talk of removing the Treasury backstop had increased prevailing interest rates by between 0.20 and 0.40 percent, Raines replied, which in turn increased mortgage costs for consumers. Riley pushed harder, asking Raines to explain how much it would actually cost borrowers to pull the Treasury line. Would it be between half a percentage point and 1.5 points? “Maybe around that number,” Raines responded.Read more at location 3107

    -But Riley had Raines right where he wanted him. The interest rate on the average 30-year fixed-rate mortgage backed by Fannie or Freddie had actually declined slightly between the introduction of Baker’s bill and the week following Gensler’s testimony. It had fallen from 8.3 percent to 8.26 percent. Riley pointed out this undeniable fact. The congressman went on to warn Raines that if Fannie hoped to work constructively with Congress, the company had better curb the rhetoric claiming certain members of Congress were anti-housing.

    -Next up: the matter of those constituent letters imploring so many in Congress to reject the Baker bill. John Sweeney, a Republican from New York, and Donald Manzullo, an Illinois Republican, told of calling some of the folks who had sent the letters. What they found was shocking: These constituents had no idea that their names had been signed to such a letter. Others, meanwhile, explained that they had not been contacted by any coalition but by Fannie itself, while still others said they had specifically asked Fannie not to use their names. Some had no recollection of being contacted at all.Read more at location 3119

    -The Coalition for Homeownership appeared to be a coalition of one?Fannie Mae, acting once again through its wealthy nonprofit foundation. Sweeney’s staff walked through the hearing room carrying boxes, which they deposited on the witness table next to Raines. In them were more than two thousand letters received by various representatives’ offices arguing against any restrictions on Fannie Mae.

    -“I feel like the judge in ‘Miracle on 34th Street’ when they brought in the letters to Santa Claus and put them on the judge’s desk,” Raines said. Asked by Sweeney and later by Manzullo to explain, Raines admitted that Fannie had bought the names of constituents from a commercial list vendor and contacted the constituents. He could not say how much money Fannie had spent on the effort. Manzullo went on the attack, telling Raines that his staff had called thirty of the letter writers from his district; the first nine they contacted said they knew nothing about the letters. “Most of my constituents were upset that their good name had been used by your company,”

    -Manzullo raged. “I am upset also.” He went on. “I want you to send letters to 2,000 of my constituents apologizing for using their good name. This is bogus lobbying.” Raines responded with defiance: “We will ask for support from people in the United States to support the secondary market,” he said. “We will ask them to contact their members to express their point of view. If any letter came to you that was not an accurate expression of the views of a constituent, I’m sorry for that, and we will endeavor in the future to ensure that that does not occur.” The fireworks were over. The hearing was drawing to a close. Because of a pending vote, Raines would soon be excused. But before he was, Carolyn Maloney, a New York Democrat, wanted to ask a question about new product areas Fannie and Freddie might pursue.

    -“There is one that I would hope that you would take a look at and expand to,” she said. “I think it would be appropriate to bring the G.S.E. structure to childcare, an area that has been failed by the private markets. You literally revolutionized home ownership in this country, it is now at an astonishing 70 percent, yet childcare, we can’t get the financing. It is not supported. I would like to know, would Fannie and Freddie be opposed to having the authority to buy childcare facility mortgages?” Raines would have loved to respond to such a softball question, but Baker concluded the hearing, asking that Fannie and Freddie answer Maloney’s question in writing. After almost five hours of testimony the hearing was finally over. Battle lines were clearly drawn between those, like Maloney, who wanted to expand the reach of Fannie and Freddie to execute government policy?her idea was called Kiddie Mac?and those who wanted the companies out of the business of banking altogether.Read more at location 3129

    -While before its directors had been obscure businessmen who counted Mozilo as a friend, in 2001 the Countrywide board took on a more political tone. That was the year that Henry G. Cisneros, the Clinton-appointed secretary of HUD from 1993 through 1997, became a Countrywide director. Cisneros was also on the board of KB Home, the giant homebuilder where Johnson was a director from 1992 through the first few months of 2008.Read more at location 3442

    -Countrywide also hired the children of politicians and others in power. Paul Pelosi Jr., the son of Nancy Pelosi, the former Speaker of the House, worked as a mortgage broker and sales manager at a Countrywide office in San Mateo, California. In 2007, when the company was on the ropes and beginning a mass of layoffs, Pelosi’s name was on the list of those to be cut. According to a former executive with knowledge of the situation, Mozilo personally removed Pelosi’s nameRead more at location 3476

    -In addition to selling billions of dollars in mortgages to Fannie Mae every year, Mozilo recognized the importance of being able to issue and sell mortgage securities containing Countrywide loans directly to investors. As such, he was among the first to jump-start the so-called private-label mortgage securities market in 2002. One year later, Countrywide was the fourth-largest issuer of private-label mortgage securities.Read more at location 3496

    -Obsessing about market share meant that as Countrywide’s rivals corrupted their lending practices, it would have to do so as well in order to compete. The former finance executive recalled: “To the extent that more than 5 percent of the market was originating a particular product, any new alternative mortgage product, then Countrywide would originate it. I would ask ‘why are we originating 182 products?’ and the answer I got was we want to be the leader in all products. We might lose business otherwise.”Read more at location 3510

    -But for some in Congress, even this type of loan was too restrictive. In an April 2003 hearing sponsored by the Committee on Financial Services, Maxine Waters, a Democrat from California, implored the housing finance industry to eliminate down payments altogether. These requirements were too onerous; besides that, they wereRead more at location 3555

    – Note: what a stupid negressEdit this note

    -“I think we ought to be encouraging our private institutions, our financial institutions to have more products where you have no down payments,” Waters urged. “There are people who will never have a down payment, who make their rental payments every month on time, and they would be just fine if they could get a product that could be offered to them by the people who really do the financing, who do the mortgages.”Read more at location 3560

    – Note: maxie waters typical democratEdit this note

    -Still, the housing market was ramping up and NovaStar was able to persuade many of its shareholders that its mistakes were honest ones and were immaterial to its growing business. The company hired Lanny Davis, a well-connected lobbyist and crisis public relations operative, to run interference for it among investors and reporters.Read more at location 3897

    – Note: wow i just read 10 pages of wrongdoing by novastar and find out Lanny Davis is their lawyer SCUMBAGEdit this note

    -Home prices have been rising strongly since the mid-1990s, prompting concerns that a bubble exists in this asset class and that home prices are vulnerable to a collapse that could harm the U.S. economy. A close analysis of the U.S. housing market in recent years, however, finds little basis for such concerns. The marked upturn in home prices is largely attributable to strong market fundamentals.

    ?JONATHAN MCCARTHY AND RICHARD PEACH, Federal Reserve Bank of New York, December 2004Read more at location 4034

    -When Timothy F. Geithner, a fresh-faced acolyte of Robert Rubin, the master of deregulation, was ushered in to preside over the Federal Reserve Bank of New York in 2003, the banks knew they held all the cards. Geithner’s selection committee consisted of executives of most of the institutions that would rely on him later to bail them out.Read more at location 4282

    -There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,

    ?TREASURY SECRETARY JOHN W. SNOW, testifying before the House Financial Services Committee about increasing oversight of Fannie Mae and Freddie Mac, September 10, 2003Read more at location 4369

    -By late July, Fannie had found the support it needed to neutralize Baker’s efforts. But the company faced another threat, this time from the Bush administration, which had expressed a new willingness to work with Baker. The goal: to ram GSE legislation through the Congress. None other than John W. Snow, the Treasury secretary, set the new tone from the administration.

    -In congressional testimony on September 10, 2003, he urged the creation of a new Federal agency to regulate and supervise the financial activities of the government-sponsored enterprises. “We need a strong, world-class regulatory agency to oversee the prudential operations of the GSEs and the safety and soundness of their financial activities consistent with maintaining healthy national markets for housing finance,” he said. The administration wanted that world-class regulator to be in the Treasury Department.

    -This was bad news for Fannie and Freddie who preferred the underfunded, undermanned, and malleable regulator they had. As both companies knew, any remotely “world class” overseer would almost certainly be interested in raising the companies’ capital requirements. In mid-September, Raines met with Snow about the legislation and promised that Fannie would not fight it. But almost immediately, the company began circulating documents on the Hill highlighting everything the company hated about the bill. It doled out talking points on various issues to Democrats the company knew could be relied upon to throw up roadblocks to the legislation. In congressional hearings in late September, two of Fannie’s most constant defenders questioned Snow’s view that the company needed a new regulator.

    -They were Democrats?Barney Frank, the representative from Massachusetts, and Maxine Waters, the California congresswoman. “I have sat through nearly a dozen hearings where, frankly, we were trying to fix something that wasn’t broke,” Waters said. “Housing is the economic engine of our economy and in no community does this engine need to work more than in mine. We should do no harm to these GSEs. We should be enhancing regulation, not making fundamental change. Mr. Chairman, we do not have a crisis at Freddie Mac, and in particular at Fannie Mae, under the outstanding leadership of Mr. Frank Raines. Everything in the 1992 Act has worked just fine.” Then Barney Frank chimed in, asking Raines and his counterpart from Freddie Mac, George Gould, whether they felt they had been underregulated over the years. When both men said they had not (surprise!), Frank wondered aloud why Congress was even discussing a new regulator for the companies.

    -“I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists,” Frank concluded. At the same time, the National Association of Realtors and the National Association of Homebuilders were lobbying hard against the proposed Treasury regulator. Allowing it to vet or disapprove new or existing programs could limit the enterprises’ ability to meet their mission of funding affordable housing, these groups argued. Of course, they noted that minority and moderate-income households would be hurt the most by a new and tougher regulator.

    -It was right out of the Jim Johnson playbook. Reining in Fannie would only harm the poorest Americans; shouldn’t they have the right to reap the rewards of homeownership? The legislation died; Fannie and friends had beaten back yet another onslaught. It would, however, be their last hurrah.Read more at location 4515

    -Among the most vocal was Christopher Dodd, the Democratic senator from Connecticut, who urged Congress not to lose sight of the great deeds Fannie and Freddie had done over the years for everyday Americans. “Like most of us here, this is one of the great success stories of all time,” Dodd said, inarticulately. “And we don’t want to lose sight of that and has been pointed out by all of our witnesses here, obviously, the 70 percent of Americans who own their own homes today, in no small measure, due because of the work that’s been done here.” Dodd seemed to be directing his words at Fed chairman Greenspan, who was on hand to testify about Fannie and Freddie. He was not what Fannie would call a friendly witness; like Treasury secretary Snow, Greenspan and some of his colleagues at the Fed were becoming more critical of theRead more at location 4607

    -Now Greenspan was testifying before the Senate Banking Committee about regulatory reform for Fannie and Freddie. Outlining the Passmore paper’s findings, he said: “The Federal Reserve is concerned about the growth and the scale of the GSEs’ mortgage portfolios, which concentrate interest rate and prepayment risks at these two institutions.” And unlike savings and loans and commercial banks, Greenspan noted, Fannie and Freddie had the thinnest of capital cushions but employed heavy leverage.Read more at location 4636

    -The problems were becoming clear enough, but few regulators seemed to notice the calamity in the making. Capitol Hill, for its part, was asleep. As the housing market rotted from the core, Ben Bernanke expressed his concern about inflationary pressures and Tim Geithner, president of the powerful New York Fed, sounded warnings on unregulated hedge funds.Read more at location 5437

    -Testifying before the Congressional Joint Economic Committee in March 2007, Bernanke, considered a scholar on central banking, said, “The impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained.” And later that month, Paulson, the secretary of the Treasury who had recently run Goldman Sachs, echoed Bernanke’s view that the mortgage crisis would not infect the overall economy or world financial markets.Read more at location 5440

    -I am extremely proud of my service to Fannie Mae and in other important dimensions of public service. I believe Barack Obama’s candidacy for president of the United States is the most exciting and important of my lifetime. I would not dream of being a party to distracting attention from that historic effort0.

    ?JAMES A. JOHNSON, resigning from the Obama advisory team, June 11, 2008Read more at location 5491

    -In addition to beggaring the American people, the twin rescues of Fannie and Freddie made liars out of many people. First among them was Johnson, who had claimed that Fannie would never cost the taxpayers a dime. Barney Frank, Fannie’s ardent supporter, was also proven wrong in his assessment that the company posed no threat to the public.Read more at location 5557

    – Note: barney fag should be in jailEdit this note

    -Some examples: William Daley, White House chief of staff, served on the Fannie Mae board during the 1990s. Timothy Geithner, the relaxed regulator at the New York Federal Reserve Bank, became Treasury Secretary. Others include Tom Donilon, Fannie’s longtime head of government affairs and a key political operative, who is now national security advisor to Obama. Thomas R. Nides, the Fannie Mae human resources executive who figured in the OFHEO investigation into earnings manipulations at the company, was nominated to the position of deputy secretary of state for management and resources in fall 2010. When the White House publicized both appointments, neither Donilon’s nor Nides’s years at Fannie Mae were mentioned.Read more at location 5580

    -The irony of having two of the nation’s most strident defenders of Fannie Mae sponsoring the new reform act was lost on few of those who knew the entire sordid Fannie story. And yet the law failed the most basic test?it did not insist that large and unmanageable institutions be cut down to size to alleviate their threats to taxpayers in the future.Read more at location 5591

    -At the end of 2010, as policymakers began to consider what to do with the beleaguered Fannie and Freddie, Barney Frank had this to say: “I think blaming Fannie and Freddie as a primary cause of the crisis is a mistake. Fannie and Freddie helped it get going, but there would have been people doing it without them.”Read more at location 5597

    -ANDREW CUOMO?director of HUD who urged Fannie and Freddie to finance more low-income mortgages; governor of the state of New York.Read more at location 5616

    -PETER ORSZAG?author of flawed paper minimizing Fannie Mae’s potential costs to the taxpayers; resigned as director of Office of Management and Budget in the Obama administration in July 2010. Joined Citigroup as vice-chairman.

  25. Anyway, the Occupiers have occupied the grounds of St. Paul’s cathedral in London, prompting its first closing since WWII. God is not amused.

    http://www.guardian.co.uk/uk/2…..-cathedral

  26. Did you forget to mention all the $$ Countrywide and the banking industry used to create ‘too big to failed’? I just love all the garbage the right is throwing. Follow the $$$ & you will see the real culprit. Yeap $$ is buying a good cover story for the right. Blame your puppet and then give them a 6 figure job when they are done doing your duty job. So typical of BIG BUSINESS.

  27. OWS was a test putsch by our Community-Organizer-in-Chief.

    The test showed you can rally angry mob into the streets during fall weather.

    We’ll see how the Occupiers due in November. This will be the big test. If they maintain the mob in the cold fall weather.

    Full roll out for the putsch will be Nov. 2012. Obama and his minion Van Jones have organized a little Sturmabteilung, we’ll have to see how they work out in real battle.

  28. So, are unions not to blame either because government policy is what allows them to exist? Should everyone who tries to take advantage of Washington cronyism not be blamed because it ultimately was Washington that enabled it?

    The fact is that Wall Street has been given trillions of taxpayer dollars which have not been paid back despite the protestations of dumb conservatives everywhere. The Federal Reserve bought all of those assets from the banks at above-market prices and a huge bout of money printing recapitalized those banks at the expense of inflation for everyone else. This is in addition to the fact that they are given privileged status in our crony banking system as primary dealers for the Fed and committee members on the FOMC.

    The banks and the government are in bed with each other because our monetary system is based upon U.S. Treasury debt and it requires ever-increasing amounts of debt to create money. While the OWS protesters are idiots, I’m not going to absolve Wall Street of blame, just like I wouldn’t absolve unions of blame.

    Also, when Wall Street banks specifically lobby for these bad policies, how are they not also part of the problem?

    1. Here’s a better graph showing all of the off-balance sheet mortgage backed securities purchases.

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