...when everything is going right the "free market capalists" say government only gets in their way and then when the government saves their ass by cleaning up their pile of shit the free market capitalists say it was a necessary step?

Fannie and Freddie were monsters created by Congress. Their lending standards were slashed at the end of the '90s which led to all the crappy credit that broke the investment banks (who were the victims of government policy).

This was nothing more than "Affirmative Action" for mortages.

I don't believe in Government bailouts, but as no.6 points out Fannie and Freddie were government creations. Government broke it now goevernment needs to buy it, on the back of the taxpayers of course.

...not really sure where to start there.

For the sake of argument, let's just go with your premise that Congress "created monsters" which "slashed" lending standards.

With no lending standards in place I guess you're saying that lenders just couldn't help themselves from writing shitty loans, and the investment banks and bond underwriters just couldn't help themselves from securitizing these loans in creative ways and rating them so that they would end up in not only every balance sheet in the country but also in your money market account.

Yea, those investment banks and lenders are the real victims of our evil government.  Why, the evil government probably even invented some insidious way to give them the idea to create credit default swaps, which as I'm sure you know is responsible for no small part of this mess.

Yea...brilliant insight.

Both were at fault, but primarily it is the governments fault.
Gambler is correct in stating that this was affirmative action in the mortgage business.
There was much pressure to write minority loans. Look at Countrywide. They were pressured and bullied by the government to write more minority loans. When they did, and the housing market plummeted, they were accused of predatory lending because of the minority foreclosures.
Of course, we will all pay for it in the end.

though Lehman was left to sink, so that's "progress" of a sort, if that's the right word to use here.

It's the "too big to fail" theory at work I guess.

FNMA was created in 1938. It took 70 years for government to create this crisis? Bullshit.

Freddie was created in 1970. It took 38 years for government to create this crisis? Bullshit.

This crisis was created by greed, pure and simple. Regardless of the spin you hear from the echo chamber, people at the top of mortgage institutions designed and approved the no doc loans so they could be paid exorbitant commissions. It didn't matter to them that they were loaning to crackheads because by the time the default occurred they would already have their payments.

Whatever purpose Fannie and Freddie started with, it's easy to see that what went wrong also went wrong with the whole finance industry. Same disease, different cadavers.

The government was influenced to do a poor job because of greed-- starting outside the government and working in. It was not a matter of government screwing up business, it was a matter of business screwing up government, and getting super-wealthy doing it.  

Look and see who made the most money off subprime mortgages, or the S&L scandals. Those people weren't in the government. Definitely some government people received a share of it, and those who used the revolving-doors open to them received a much larger share. For the most part, though, the businessmen who needed a regulation removed here, or a regulator discouraged there  made a buttload of money up to now, and they are the ones who deserve the almost all the blame.

Behind all the fraud, waste, and malpractice-- a business or businessman hauls it all to the bank. Having been trained by deregulation propaganda, we quickly call him (or her) not a businessman but a criminal, and then blame government. We never blame business, because we're trained confirm that all business is good, that capitalism only saves the world if that government didn't spoil all her tireless efforts.  

The government needs to do a better job stabilizing the economy than this buyout/giveaway package. If Fannie and Freddie are too big to fail, break'm up as part of the cost of bailing 'm out. That goes for all the rest.

Tell that to Enron, Ken Lay, Jeffrey Skilling and Andrew Fastow.

Why is it that no one, not even Reid nor Pelosi is calling for heads to roll now? What are their conditions to sign on? That no affected CEOs unduly profit from tax payer dollars?

How many CEO’s, CFO’s and company President’s names of the recently bankrupted and nationalized financial corporations can you list? If it weren’t for the Presidential election you probably wouldn’t even know about Franklin Raines and James Johnson. Why is it that the press isn’t all over the criminal and unethical aspects of this with Enron voraciousness? Why not? Because it’s not the heads of friends of Bush that would be on the block. It would be those like Christopher Dodd and Barney Frank and Jamie Gorelick. Not to mention the injury to good ol’BHO. Watch now as Dodd and Frank go on the offense as their defense.

-- Modified on 9/21/2008 8:19:08 PM

I covered that aspect in my original post.  

Okay, I'll clarify. What you refuse to accept is the degree to which de-regulated and under-regulated businesses are prone to corruption. A little preventive regulation would have saved so much, and might have saved the economy and the system of government. Both are now endangered.  

Ken Lay & coherts were worshiped as business geniuses right up to the day Enron failed. Only then did people look at what they had done. In other words, when they were a business, they were above reproach. The day they became criminals was the day the business failed. When the cash cow dried up, it became hamburger. Why? It didn't serve anyone's greed anymore.

Also, you cite yourself as norm that disproves my description that conservatives never blame business.  I accept that you might be exceptional. Do you consider that your fellow conservatives, especially leaders like Norquist, and discredited ones like Abramoff and Delay probably don't think the way you do about it? Instead of the norm that refutes me, you might just be the exception that proves the rule.  

As to your tangent about how Raines and Johnson have received favorable treatment compared to Lay & Company-- there's so much to report right now. I mean with the possibility of literally bankrupting our government, and/or having our whole economy crash, I could see where the trials of a couple guys might be page 16 material.

For Pelosi and Reid? Their main reaction is probably shock at this point. I know mine would be, along with the sudden fear of knowing that  they will be making historically momentous decisions now.

Now my tangent:

You know something? Ol' Zin was right again. Bush & Company with their destruction of government oversight have brought this economy to the edge of depression. Their instincts to turn more money over to the rich now threatens to bring this country into political and economic catastrophe. I agree with William Grieder, editor of "The Nation." This has the possibility of bringing down one or both parties, bankrupting the government.

[joke] [dark humor] I hope I'm not right in having said Bush will make us into a failed state by '08, even if I'm off by just a year or two. [/dark humor] [/joke]

After the crash of 1929, the Glass-Steagall Act of 1933 was passed to prevent the very things you talk about. It put a firewall between banks and investment firms, preventing the firms using investors money to finance the banks questionable mortgage loans. Unfortunately for the taxpayers, in 1999, congress passed legislation reversing the 1933 bill, after investment firms had spent $300,000,000.00 lobbying over an extended period of time to get that done. Goldman Sachs was one the main lobbyist. Clinton signed the new bill, and, surprise, two months later, Treasury Sec Rubin resigned and went to Goldman Sachs. And here we are today, wishing Glass-Steagall was still the law.

Were your ancestors plantation owners by chance? Or does your family tree includes a slave trader? Whatever the cause, why does everything have to come down to race with you?

I suppose you believe in hate crimes too. I imagine if a black guy grabbed my girlfriend's ass and I punched his ticket for him, you would say that the incident was racially motivated and I kicked his ass because of his race and not because of his actions.

I don't really know what is causing your guilt, but if you don't believe blacks can be racist too. I would suggest you go down to East Ponce or Metropolitan Ave and I am sure the local residents will be happy to share their outlook with you.lol

It's society's fault for failing them.

The moment Enron failed, the press was naming names. That's not happening here. You've made excuses for the press and the Dems. I guess we'll have to wait an see.

-- Modified on 9/22/2008 8:18:43 PM