From who did Obama "inherit" the economic mess?

[Jim in CT]

On MSNBC tonight, both Chris Matthews and President Obama stated that Obama "inherited" the economic mess from the Republicans. Of course, since this was MSNBC, that statement goes completely unchallenged.

Can one of the liberals here explain how the Democrats inherited this mess from Republicans? Here are some irrefutable facts...

The United States is a democracy, not a dictatorship. The legislative branch has more influence on the legislative agenda than the executive branch.

Since January 2006, the Democrats have controlled the legislative branch. When they took over the legislature from the GOP in January 2006 , the Dow was at 12,600, and unemployment was at 4.6%.

The president (Obama), vice president (Biden) and Secstate (Clinton) were all prominent, influential senators in the majority party. As such, it seems to me that they have a great deal of ownership of economic performance since their party took control.

The financial de-regulation that allowed things like derivitives, credit default swaps, and collaterized debt obligations, was passed by a republican legislature in the late 1990's, and signed into law by President Clinton.

Before the economy collapsed, the GOP introduced a bill that would have prevented Fannie Mae and Freddie Mac from writing so many subprime mortgages. That bill was fillibustered by 2 senators named Chris Dodd and Barack Obama, 2 senators who got more campaign contributions from Fannie and Freddie than anyone else.

The GOP, when they controlled the legislature for the 1st 6 years of the Bush presidency, allowed Bush to rack up a ton of debt. My point is, the GOP is not without fault here.

OK, what am I missing? How were the Democrats innocent bystanders to all this?

Look at liberal policies of taxing, spending, borrowing, and saying "yes" to every demand ever made by a labor union. What has that gotten us?

I don't get it, I just don't get where guys like Spence are coming from...

[stcroixman]

I consider myself a Clinton Democrat which is moderate. Full Disclosure - I did NOT vote for Obama. He was not ready

As someone in the financial sector I really think the deficit is mostly a result of 10 years of fighting 2 wars and rebuilding 2 countries and not because of the Bush tax cuts.

I also believe the financial mess is strictly from poorly regulated greedy sob's who probably bribed their accountants to look the other way. Shame on those CPA firms too.

I understand small business should not be regulated, but Financial Institutions should be. Lehman Bros, Madoff, etc. were allowed to do their thing also because of shoddy work by the SEC. No one approved the SEC to cut corners.

We invest our money with them, there should be a higher level of trust which van only result from regulation by the letter of the law.

Bottom line is Obama wanted to be president, he knew the state of the economy. By pointing a finger now he is waving the white flag.

[Jim in CT]

stcroixman, the subprime mortgages contributed nothing?

Those wars started in 2002 and 2003, I believe. The economy did just fine until October 2008, when the subprime mortgages rocked Lehman Brothers and Bear Sterns, and the rest fell like dominoes.

I agree with you 100% that we need some smart regulation of these banks and financial instututions. I also feel that Sarbanes Oxley goes way too far, we spend a lot of time on meaningless compliance with that law.

P.S. I'm a moderare Republican who voted for Clinton and I think he was a pretty good president...

[Fishpart]

You can also trace a significant amount of economic decline to both NAFTA and China Free Trade which took away a significant amount of jobs in the manufacturing sector. Those jobs paid well compared to service industry jobs and also kept a significant amount of professionals employed in manufacturing companies.

The second hit from both of these policies is downward pricing pressure put on manufacturers "but I can get it for XXX cheaper from China" which in turn forces wages even lower. I'm happy to be working, but back to what I earned in 2006 with a significant increase in healthcare cost, more responsibility and longer hours.

[scottw]

I don't know why Obama can't just tax his "inheritance" at a confiscatory rate and then redistribute it.....

[Jim in CT]

Originally Posted by scottw

I don't know why Obama can't just tax his "inheritance" at a confiscatory rate and then redistribute it.....

LMAO...

[spence]

Originally Posted by Jim in CT

On MSNBC tonight, both Chris Matthews and President Obama stated that Obama "inherited" the economic mess from the Republicans. Of course, since this was MSNBC, that statement goes completely unchallenged.

What were you doing watching MSNBC?

The United States is a democracy, not a dictatorship. The legislative branch has more influence on the legislative agenda than the executive branch.

Depends...Quite often the Executive branch is quite assertive to ensure the Congressional agenda is in alignment with the President's objectives.

Since January 2006, the Democrats have controlled the legislative branch. When they took over the legislature from the GOP in January 2006 , the Dow was at 12,600, and unemployment was at 4.6%.

Hmmm, if things were so good why did the Democrats take over the legislature?

The president (Obama), vice president (Biden) and Secstate (Clinton) were all prominent, influential senators in the majority party. As such, it seems to me that they have a great deal of ownership of economic performance since their party took control.

You're talking about 3% of the Senate...and not any of them sat on committees with direct impact to the economy.

The financial de-regulation that allowed things like derivitives, credit default swaps, and collaterized debt obligations, was passed by a republican legislature in the late 1990's, and signed into law by President Clinton.

I recall reading some time ago "The legislative branch has more influence on the legislative agenda than the executive branch." If you subscribe to this they it sounds like the GOP should be the target of your wagging finger.

Before the economy collapsed, the GOP introduced a bill that would have prevented Fannie Mae and Freddie Mac from writing so many subprime mortgages. That bill was fillibustered by 2 senators named Chris Dodd and Barack Obama, 2 senators who got more campaign contributions from Fannie and Freddie than anyone else.

I'm not aware of any Dem filibuster just before the economy tanked. Most of this story is from 2003-2005 and when looked at in detail reveals mistakes by both sides of the leadership. This has been discussed in detail in older threads.

The GOP, when they controlled the legislature for the 1st 6 years of the Bush presidency, allowed Bush to rack up a ton of debt. My point is, the GOP is not without fault here.

That's because despite what they pretend to aspire to, the GOP has a really chronic debt problem. Google up the rate of debt change as a percentage of GDP for the past 60 years and look at the parties in charge.

OK, what am I missing? How were the Democrats innocent bystanders to all this?

Nobody has said they were innocent bystanders...but the economy was under Bush's watch for 8 years and he left Obama with a massive recession. I'm not sure this is really in dispute.

Generally speaking, in the media Presidents get to take credit for success and blame for failures regardless of the trends or systemic actions that actually drive them. Examples of this may be the tech boom, 9/11, lack of terrorism after 9/11, the 2009 recession etc...

I work in Sales and I'll tell you the best factor that determines the success or failure of a salesperson is the TIMING of when they take their job given the product and market needs.

Look at liberal policies of taxing, spending, borrowing, and saying "yes" to every demand ever made by a labor union. What has that gotten us?

I think you confuse the word "liberal" with "irresponsible". Borrowing beyond your means isn't a Liberal tendency, it's an irresponsible tendency that both parties too often suffer from.

I don't get it, I just don't get where guys like Spence are coming from...

I come from the pragmatic center where we try to balance ideology with observation.

-spence

[scottw]

Originally Posted by spence

I come from the pragmatic center where we try to balance ideology with observation.

-spence

"The proper bafflers are the ambiguists. Their flashes of insights are frequent enough; but in the end the fog closes down. They are great ones for the facts, against the fundamentalists, and great ones of "conscience," against the cynics. They insist on the values of pragmatism against the absolutists; but they resent the suggestion that they push pragmatism to the point of relativism of moral values."
"For the pragmatists there are, properly speaking, no truths; there are only results."
-- John Courtney Murray, S.J. (September 12, 1904-August 16, 1967)

[spence]

Neat quote but it doesn't make a lot of sense.

Originally Posted by scottw

"The proper bafflers are the ambiguists. Their flashes of insights are frequent enough; but in the end the fog closes down. They are great ones for the facts, against the fundamentalists, and great ones of "conscience," against the cynics. They insist on the values of pragmatism against the absolutists; but they resent the suggestion that they push pragmatism to the point of relativism of moral values."
"For the pragmatists there are, properly speaking, no truths; there are only results."
-- John Courtney Murray, S.J. (September 12, 1904-August 16, 1967)

Posted from my iPhone/Mobile device

[stcroixman]

Originally Posted by Jim in CT

stcroixman, the subprime mortgages contributed nothing?

Those wars started in 2002 and 2003, I believe. The economy did just fine until October 2008, when the subprime mortgages rocked Lehman Brothers and Bear Sterns, and the rest fell like dominoes.

I agree with you 100% that we need some smart regulation of these banks and financial instututions. I also feel that Sarbanes Oxley goes way too far, we spend a lot of time on meaningless compliance with that law.

P.S. I'm a moderare Republican who voted for Clinton and I think he was a pretty good president...

My firm does Sarbanes Oxley work. The word is it is on the chopping block. It is needless BS to the businesses. The best thing that could happen is a flat corporate tax (10% ) like in Ireland, but only for the portion of goods/services made or performed in USA. That will bring back jobs.

I am tired of every politician saying he/she will create 5 million good paying jobs. Exactly how? By giving out tax credits? Cut the tax and cut out the stupid credits.

There are millions out there who would accept 30K($15/hour)- 40K($20/hour) to work in a blue collar job I mean that respectfully too as my day did it for 40+ years, but not everyone is a President or CFO. With the economy hurting, any job is a good job.

[mosholu]

I think the blame for the economic mess we are in goes to both parties. As far back as the Clinton administration Rubin and Summer were pushing for less regulation over the financial markets. Under then HUD Secretary Cuomo the regulations regarding qualifying mortgages for Fannie and Freddie and the FHA were greatly relaxed to included sub-prime and other things which we now regret. The Republicans were no better. Phil Gramm pushed through regulations exempting the electronic trading of off exchange energy derivatives form the review of the CFTC. Even after Enron these transactions were not subject to reporting or review. Under Bush, the light or no touch continued at the SEC and other regulatory agencies. The investment banks were able to lobby the SEC to have credit default swaps deemed not to be insurance and removing any review from state insurance administrators. Unregulated credit default swaps are what brought AIG down.
Bottom line: Wall Street has both parties in their back pocket and we as an electorate need to curb their power. I am all for capitalism and innovation but time and time again we have found that left to their own devices greedy participants will hurt the economy and the average taxpayer gets the bill.

[scottw]

Originally Posted by spence

Neat quote but it doesn't make a lot of sense.


Posted from my iPhone/Mobile device

to one who claims....

I come from the pragmatic center where we try to balance ideology with observation.
-spence

it wouldn't.....

[spence]

Originally Posted by scottw

to one who claims....

I come from the pragmatic center where we try to balance ideology with observation.
-spence

it wouldn't.....

Not in the context you used it.

-spence

[scottw]

Originally Posted by spence

Not in the context you used it.

-spence

thanks for the chuckle this morning anyway....pragmatic center

[Jim in CT]

Originally Posted by spence

What were you doing watching MSNBC?


Depends...Quite often the Executive branch is quite assertive to ensure the Congressional agenda is in alignment with the President's objectives.


Hmmm, if things were so good why did the Democrats take over the legislature?


You're talking about 3% of the Senate...and not any of them sat on committees with direct impact to the economy.


I recall reading some time ago "The legislative branch has more influence on the legislative agenda than the executive branch." If you subscribe to this they it sounds like the GOP should be the target of your wagging finger.


I'm not aware of any Dem filibuster just before the economy tanked. Most of this story is from 2003-2005 and when looked at in detail reveals mistakes by both sides of the leadership. This has been discussed in detail in older threads.


That's because despite what they pretend to aspire to, the GOP has a really chronic debt problem. Google up the rate of debt change as a percentage of GDP for the past 60 years and look at the parties in charge.



Nobody has said they were innocent bystanders...but the economy was under Bush's watch for 8 years and he left Obama with a massive recession. I'm not sure this is really in dispute.

Generally speaking, in the media Presidents get to take credit for success and blame for failures regardless of the trends or systemic actions that actually drive them. Examples of this may be the tech boom, 9/11, lack of terrorism after 9/11, the 2009 recession etc...

I work in Sales and I'll tell you the best factor that determines the success or failure of a salesperson is the TIMING of when they take their job given the product and market needs.


I think you confuse the word "liberal" with "irresponsible". Borrowing beyond your means isn't a Liberal tendency, it's an irresponsible tendency that both parties too often suffer from.


I come from the pragmatic center where we try to balance ideology with observation.

-spence

Spence -

"if things were so good why did the Democrats take over the legislature?"

Read a history book. It wasn't because of the economy, it was because of the Iraq war.

"You're talking about 3% of the Senate...and not any of them sat on committees with direct impact to the economy."

Spence, please put down the Kool Aid and think straight for 2 seconds. The chairman of the house banking committee was Barney Frank, the chairman of the Senate Banking committee was Chris Dodd, both Democrats. My point was (which you carefully avoided),is that the Democrats inherited a robust, thriving economy in 2006.

"I'm not aware of any Dem filibuster just before the economy tanked. "

None of us know everyihtng. In 2006, the GOp introduced legislation to regulate Fannie and Freddie, Senators Obama and Dodd fillibustered. I doubt it would have saved the economy anyway...

"Nobody has said they were innocent bystanders..."

Please Spence. Please. Obama blames EVERYTHING on the previous administration, and has said REPEATEDLY that the previous administration (NOT THE PREVIOUS CONGRESS) drove the car into the ditch.

Spence, you're going to say with a straight face that Obama and the Dems haven't placed all of the economic blame on the GOP?

"I come from the pragmatic center where we try to balance ideology with observation. "

Thanks, I needed a good laugh. Spence, every post you have ever written can be summed up thusly:

liberal = good
conservative = bad.

The only "middle" you occupy is the middle between Ted Kennedy and Mao Tse Tung.

[spence]

Originally Posted by scottw

thanks for the chuckle this morning anyway....pragmatic center

I think the center tends to be inherently more pragmatic by it's very nature, not in a pure sense mind you (there's still room for idealism) but with a nod to reality when illuminating a path forward.

Glad I could make you laugh.

-spence

[scottw]

Originally Posted by spence

I think the center tends to be inherently more pragmatic by it's very nature, not in a pure sense mind you (there's still room for idealism) but with a nod to reality when illuminating a path forward.

Glad I could make you laugh.

-spence

I'm sure that's what you see when you(and the "we") place yourselves on a pedestal in the "center" and look around and begin to illuminate forward paths....

reminds me of "WE are the ONES we've been waiting for"... creepy...


you didn't make me laugh as hard as my 12 year old who located the "yo mama so ....." joke app for her iPOD......

[Jim in CT]

Spence, if you are in the "middle" as you claim, that must mean that there are some issues on which you think conservatives are right, and liberals are wrong.

I'm in the middle (slightly right leaning). I think conservatives are right on the economy, abortion, and national security. I think liberals are right on gay marriage, gun control, minimum wage, and the need for some regulation on Wall Street..

So Spence, on what issues do you side with conservatives?

I suspect that you think you're in the "middle" because you fall somewhere between Keith Oberman and his newphew Rachael Maddow. But remember, those 2 don't exactly cover the entire spectrum, just the entire spectrum at one network.

[scottw]

actually...he's in the "center"...which is the optimal point from which to look down ...and illuminate the path forward with balanced ideology(just a tinge) and with observation while nodding at reality...or something...think about it

it was actually a brilliant quote

[Slipknot]

I don't care who broke it!
all i want to know is who's gonna fix it?
THAT'S all the matters

i'm tired of getting the chit end of the stick

[Jim in CT]

Originally Posted by Slipknot

I don't care who broke it!
all i want to know is who's gonna fix it?
THAT'S all the matters

i'm tired of getting the chit end of the stick

I think it's important to figure out "what" broke it, so that we don't repeat the mistake. And "what" broke it is subprime mortgages (which in many cases banks were pressured to write by liberal social engineering policies) and a de-regulated financial sector that came up with crazy ways to rate those mortgages as "safe" investments, and then sell them and leverage them.

As for who will fix it? Not the liberals that the idiots in CT and MA elected to keep doing more of the same. In CT, the liberals have been running the show forever. Between income tax of the gazillionaires in Fairfield county, as well as the revenue we get from the 2 most profitable casinos in the world, CT has PLENTY of revenue. Revenue shortfall is not our problem...crazy spending is our problem.

When my state income tax is 10% (currently 5%), and my property taxes are $10,000 (currently $7700), that's when I move. And that day is coming.

[RIROCKHOUND]

Originally Posted by Jim in CT

which in many cases banks were pressured to write by liberal social engineering policies

Damn liberal mindset
"Over 75 percent of white Americans own their home, and less than 50 percent of Hispanos and African Americans don't own their home. And that's a gap, that's a homeownership gap. And we've got to do something about it." —George W. Bush, Cleveland, Ohio, July 1, 2002

[scottw]

CLOWARD - PIVEN STRATEGY

Strategy for forcing political change through orchestrated crisis

First proposed in 1966 and named after Columbia University sociologists Richard Andrew Cloward and his wife Frances Fox Piven (today Piven is an honorary chair for the Democratic Socialists of America), the "Cloward-Piven Strategy" seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.

The key to sparking this rebellion would be to expose the inadequacy of the welfare state. Cloward-Piven's early promoters cited radical organizer Saul Alinsky as their inspiration. "Make the enemy live up to their (sic) own book of rules," Alinsky wrote in his 1972 book Rules for Radicals. When pressed to honor every word of every law and statute, every Judaeo-Christian moral tenet, and every implicit promise of the liberal social contract, human agencies inevitably fall short. The system's failure to "live up" to its rule book can then be used to discredit it altogether, and to replace the capitalist "rule book" with a socialist one.

[spence]

Originally Posted by RIROCKHOUND

Damn liberal mindset
"Over 75 percent of white Americans own their home, and less than 50 percent of Hispanos and African Americans don't own their home. And that's a gap, that's a homeownership gap. And we've got to do something about it." —George W. Bush, Cleveland, Ohio, July 1, 2002

The "ownership society" was a big plank in the 2000 Bush platform. I remember reading a Bush speech from then praising all the efforts of the financial institutions to provide loans to low income borrowers.

What seems to be getting lost is the issue wasn't necessarily low income housing (i.e. where liberals -- and President Bush -- might want to defend populist interests) but also people with moderate to high income who took out massive ARMs to buy into housing they simply couldn't afford. I know first hand of some friends who were making at least 250K a year and blew it because of their own recklessness...ultimately loosing their house.

As has been discussed at length in older threads, this was a massive and systemic problem largely driven by sub prime and prime loans being bundled together without adequate regulation.

Plenty of blame to go all around...

-spence

[scottw]

Frances Fox Piven Rings in The New Year By Calling for Violent Revolution
Posted on December 31, 2010

She’s considered by many as the grandmother of using the American welfare state to implement revolution. Make people dependent on the government, overload the government rolls, and once government services become unsustainable, the people will rise up, overthrow the oppressive capitalist system, and finally create income equality. Collapse the system and create a new one. That‘s the simplified version of Frances Fox Piven’s philosophy originally put forth in the pages of The Nation in the 60s.

Now, as the new year ball drops, Piven is at it again, ringing in 2011 with renewed calls for revolution.

In a chilling and almost unbelievable editorial again in The Nation (”Mobilizing the Jobless,” January 2011 edition), she calls on the jobless to rise up in a violent show of solidarity and force. As before, those calls are dripping with language of class struggle. Language she and her late husband Richard Cloward made popular in the 60s.

“So where are the angry crowds, the demonstrations, sit-ins and unruly mobs?” she writes. “After all, the injustice is apparent. Working people are losing their homes and their pensions while robber-baron CEOs report renewed profits and windfall bonuses. Shouldn’t the unemployed be on the march? Why aren’t they demanding enhanced safety net protections and big initiatives to generate jobs?”

“Before people can mobilize for collective action, they have to develop a proud and angry identity and a set of claims that go with that identity,” she writes. “They have to go from being hurt and ashamed to being angry and indignant.”

“The out-of-work have to stop blaming themselves for their hard times and turn their anger on the bosses, the bureaucrats or the politicians who are in fact responsible.”

she says, the “protesters need targets.”

[Fly Rod]

Originally Posted by Jim in CT

I think it's important to figure out "what" broke it, so that we don't repeat the mistake. And "what" broke it is subprime mortgages (which in many cases banks were pressured to write by liberal social engineering policies) and a de-regulated financial sector that came up with crazy ways to rate those mortgages as "safe" investments, and then sell them and leverage them.

When you say banks, you make it sound like all banks when it was the big banks.

Local banks were not pressured to write sub prime loans. Most local banks would not write a loan without twenty per cent down. Mortgage companies were the biggest culprit writing hundred percent loans or eighty-twenty percent loans, holding two mortgages.


If you want to know the root cause of the current subprime crisis, there are
three things you need to understand:
First, the problem was caused by politicians (primarily Democrats) pushing
their "entitlement" agenda in to the free market. It started with "The
Community Reinvestment Act" (CRA) which required banks to make high risk
loans to minorities and others who could not have qualified for a home loan
or business loan under normal circumstances.

Second, Bill Clinton further liberalized the CRA and signed a bill to repeal
the Glass-Stengal Act. This Act was put in place in the 1930s following the
bank failures during the Great Depression. It was designed to keep banks
out of the speculation business.

Third, George Bush proposed major changes in the CRA, FMAE and FMAC in 2003
that would have tightened requirements for these business loans and subprime
home mortgages. The vote went along party lines, the Democrats won and the
proposed changes were defeated.

Why does Spence want to keep blaming Bush?

[Jim in CT]

Originally Posted by RIROCKHOUND

Damn liberal mindset
"Over 75 percent of white Americans own their home, and less than 50 percent of Hispanos and African Americans don't own their home. And that's a gap, that's a homeownership gap. And we've got to do something about it." —George W. Bush, Cleveland, Ohio, July 1, 2002

That's very intellectually dishonest, either that or you're an idiot. George Bush never suggested that the way to increase minority homeownership was to throw out all known guidelines for deciding who gets mortgages.

Conservatives, like me, want minorities to own their own homes. We believe the way to accomplish that is for them to get off welfare, work hard and get good jobs.


I cannot stand that kind of dishonesty, suggesting that Bush liked the idea of subprime mortgages.

[Jim in CT]

Originally Posted by spence

The "ownership society" was a big plank in the 2000 Bush platform. I remember reading a Bush speech from then praising all the efforts of the financial institutions to provide loans to low income borrowers.

What seems to be getting lost is the issue wasn't necessarily low income housing (i.e. where liberals -- and President Bush -- might want to defend populist interests) but also people with moderate to high income who took out massive ARMs to buy into housing they simply couldn't afford. I know first hand of some friends who were making at least 250K a year and blew it because of their own recklessness...ultimately loosing their house.

As has been discussed at length in older threads, this was a massive and systemic problem largely driven by sub prime and prime loans being bundled together without adequate regulation.

Plenty of blame to go all around...

-spence

Spence, just because you know some well-fto-do folks that bit off morethan they could chew, means NOTHING. The problem, as everyone who can think rationally knows, was subprime mortgages. I'm not saying that wealthy folsk had no foreclosures. But what brought the system down was mortgages to poor folks who had no business getting those loans.

You keep telling yourself that it was something else. That way you'll make the same exact mistake.

This is why liberalism is a mental disorder. The complete, willful unwillingness to recognize irrefutable fact, unless those facts serve your current agenda. Unbelievable.

You are right, trhere is plenty of blame on both sides. But I have never, ever heard Obama suggest that liberal policies played any role. All he ever says is that the republicans drove the car into the ditch. Or am I wrong Spence?

[Jim in CT]

Originally Posted by Fly Rod

Why does Spence want to keep blaming Bush?

Because he's aliberal, and liberalism is a mental disorder. I cannot provide better evidence than his last post.

[Piscator]

I believe it starts from the top down. That being said, Bush left Obama an economy problem. Instead of fixing the problem, Obama made that problem a whole lot worse.
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