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Monday, December 13, 2010


Donald Pay

Who was really shielded froom the recession were the banksters. It always strikes that the Republicans always want to blame the victims, and reward the criminals.


Government is creating this risk-averse environment by eliminating risk for some (GM, AIG, et. al.) but not for others (Lehman).

We had long standing rules on investments - secured loans get paid first, followed by bonds, other loans, labor contracts, and finally stocks. Well the last 2 years have seen case after case where the elite rewrite the rule AFTER the investment, turning this over.

Every turn for the last two years has added burdens for the "greedy" investors: new EPA regulations, new labor regulations, higher taxes, more audits, changed rules on existing contracts. It isn't that we are more risk averse - it is that many new risks are added to each economic decision.

Investors are behaving rationally to the irrationality displayed by our government.

Donald Pay

So, we have William who thinks "change" is the problem. But if you really look at everything William says, it really isn't change that William and his ilk object to. What they object to is change that makes the investor class accept the risks associated with their investments. If the change is to socialize the costs of business onto the public (make regulation lax), William is a cheerleader. When it comes right down to it, William is risk averse, and so are the businesses that lobby for the lax rules changes William supports. Notice how we never heard a peep about all the change in regulatory environment when the corrupt Bush regime was changing regulations. William and the other sociaiists supports all the risks being taken by the public and zero risk being taken by investors. William is a socialist.



If you never heard the "peep" (I thought it a rather bellowing yell) about the regulatory environment (not only during Bush JR, but LBJ, Nixon, Ford, Carter, Reagan, Bush SR, Clinton...) then you haven't been paying attention. (I've been on this train for awhile...) I do NOT trust centralized authority, removed from the people it supposedly represents. Never have, never will. Grand plans, run by "experts" ALWAYS turns out badly when attempted on a national scale.

WHAT (other that blind ideology) would make you thing that I support a regulatory regime that provides a barrier of entry to new business to the benefit of political corporatism?

For some reason, you seem to feel that human beings in positions of governmental authority are blessed with "super powers" that will be channeled for the good of mankind if we just let them RULE US. Somehow, when faced by national challenges, these "super-humans" will use "their powers for good, not evil"...

I believe, that markets, flawed as they may be, are the most freedom enabling force known to mankind.

The Obama administration leans toward a "Kleptocracy" that is nullifying the rule of law to award favors to it's supporters, it's undermining market certainty with "ad hoc" changes in regulatory authority and replacing the legislative process through the expansion of regulatory authority beyond the oversight of Congress. Unions taking precedence over secured creditors? Do you seriously want to justify this?

Risk takers, the lifeblood of innovation and commercial success are sitting on the sidelines because they have NO IDEA what this administration may do to PUNISH them for success.

Obama has essentially "baked in the cake" an economic uncertainty that will prevent risk takers from investing in the United States". Even with a Republican Congress, enough uncertainty and fear of Obama's "real motives" will stifle economic growth during the remainder of his term.


Donald says, "Notice how we never heard a peep about all the change in regulatory environment when the corrupt Bush regime was changing regulations. William and the other sociaiists supports all the risks being taken by the public and zero risk being taken by investors. William is a socialist."

Ha!...Nice Try....But No!

Donald says, "If the change is to socialize the costs of business onto the public (make regulation lax)."

The Bush Administration pushed for more regulation of Freddie and Fannie, and warned that they had taken on more risk than they could handle, which has a cause and effect response thorughout the economy.

Of course, it was the Democratic Politicians of the left that fought against it, because their agenda was to accomplish exactly what you are accusing William of. They wanted to socilaize the risk. Each side apparently has their own definition of "regulation", but once the working definition is established, it becomes apparent who the "Socilaists" are, and that would the people you have consistantly supported.

Donald Pay

The real problem in the mortgage meltdown was not Fannie and Freddie, which did have some regulatory oversight. The real problem was the private subprime mortgage market, which had absolutely zero regulatory oversight, and which had displaced Fannie and Freddie as the largest lender to moderate income homeowners.

From the Federal Reserve data:

More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

Read more: http://www.mcclatchydc.com/2008/10/12/53802/private-sector-loans-not-fannie.html#ixzz189ULGmsi


Donald, you know full well that regardless of who made the loans, it was Federal policy that was encouraging the loans. Lenders were punished if they didn't make enough loans to sub-prime applicants.

Donald Pay

Sorry, William, you have your facts wrong. The private mortgage market found it very profitable to sell first time home buyers risky loans, even if they qualified for less risky loans. Higher profits were generated by shoving these loans on first time home buyers and in refinancing packages. Not only that but more profit yet could be obtained through bundling low risk with high risk loans. Securitization of mortgage products and selling derivitive products on the underlying securitized products counted on a bundling low risk and high risk mortgages. If they couldn't generate high risk mortgages the amount of profit from securitization and derivatives would be less.


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