Sunday, September 21, 2008

The Bailout, the Economy and Immigration! Why the Republicans are Primarily Responsible!

As I have written in previous blogs, Immigration is not the root cause of the economic disasters our country faces today. The Primary Issue is the Global Economy. Lupita, an old friend of many of the members of this blog said about the US economy, "Our economy is just an illusion of economic growth. Big business has partnered with the Administrations from Reagan forward to develop a method to expand our labor force, push wages down and increase corporate profits." She often predicted we would face economic disasters due to our greed. Lupita´s words came back to haunt me this week as I saw news of the bailouts.
Here are the recent headlines of this crisis:
"WASHINGTON -- The federal government is working on a sweeping series of programs that would represent perhaps the biggest intervention in financial markets since the 1930s, embracing the need for a comprehensive approach to the financial crisis after a series of ad hoc rescues. Treasury Secretary Henry Paulson announced plans Friday to quickly set up a "bold" government program to take over troubled mortgage assets from financial institutions, along with other efforts to step up the purchase of mortgage-backed securities. "The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy," Mr. Paulson said in prepared remarks for a press conference."
I tend to agree with Lupita. The blame for this economic downfall is Greed, good old fashioned American Greed! Here is my view of why we are in the mess we are in. From 2002 to 2007, countless mortgage companies, many of them "no-name", mailed me and everyone else I know mortgage offers. "Refinance Now!" read the headlines. TV and Radio ads heralded the same "Refinance Now!" Remember the annoying Ditech commercials? Everyone was pushing these loans. I remember my daughter in law speaking of a friend of a friend who was in the mortgage game and selling mortgages from her house. She said anyone could afford a house now and if we were ever in the market for a new mortgage or refinance, they would get us a good "deal." (Everybody and their brother had a friend of a friend like this pushing and pushing these predatory loans).
I also remember a peer from work who lived in a pricey California neighborhood. She and her new husband decided to purchase one of those "interest only" loans for her very pricey $400K, 2B condo. I asked how she could do that. Why didn´t she try to move to a more affordable location. She said her mortgage person persuaded her it was affordable and with property being so valuable in that area, reselling would be easy. I told her I was nervous for her and I would never buy a home without a conventional mortgage. She called me a worry wart. Now I think about her and that balloon mortgage. How many others are foreclosing now because now they can´t refinance their ballooned mortgages and they can no longer afford their tripled or quadrupled monthly rates?
I remember the phone calls from the telemarketers. They were relentless in trying to sell, sell, sell these new mortgages. My mailbox was always full of offers. Again, this started in 2002-2003. I ask everyone to use their own memory on when these changes happened. Don´t rely on someone else who wants to scapegoat.
Why is it important to remember what happened and the timing? Because then you can pinpoint for yourself who is primarily accountable. (besides our greedy selves).
Politicians from both sides are busy trying to point fingers at one another. The most ludicrous accusations were from Republican politicians who pointed to legislation from the Clinton era stopping the heinous act of "redlining." Redlining, for those who may not know, is the practice of denying or increasing the cost of services to residents in certain, often racially determined, areas. The most devastating, mortgage discrimination. So the right wing nuts try to point to the anti-redlining legislation as the root cause. Ludicrous.
If one were to point towards any legislation that most contributed to this turn of economic events they would point to the "Commodity Futures Modernization Act of 2000." This legislation provided certainty that products offered by banking institutions would not be regulated as futures contracts. This law creates a LOOPHOLE for many GOP cronies (e.g. Enron) which exempts most over-the-counter energy trades and trading on electronic energy commodity markets. The "loophole" was drafted by Enron Lobbyists working with Senator Phil Gramm (Sen. McCain´s best friend) seeking a deregulated atmosphere for their new experiment, "Enron On-line". The act specifically banned regulation of credit default swaps. These unregulated instruments, insurance policies against default on risky investments like mortgage backed securities.
This is very important to understand. Mortgage companies were NO LONGER REGULATED nor were they accountable for risky mortgages. They often sold these "risks" to foreign lenders.
HR5660 and S.3283 were introduced in December 2000 by Republicans: Sen Phil Gramm, Sen Charles Hagel, Sen Peter Fitzgerald Rep Tom Ewing, Rep Tom Bliley, Rep Larry Combest, Rep James Leach, with some Dem support including Rep LaFalce and Sens Harkin and Johnson. These bills were NEVER debated in the House or the Senate. Since then, several attempts have been made to overturn them. While these bills were championed by the Republicans, they did have some support by some Democrats, so we cannot point blame at one party. Since then however, several attempts (championed by the Dems) have been made to overturn this act. In fact, an attempt to repeal the policy was vetoed by President Bush in 2008.
However, beyond legislation, the plain facts are, the primary root cause is Greed and Corruption. Here is what Robert Reich said about Fannie and Freddie:
Fannie and Freddie, as Predicted
"Apologists will say that Fannie and Freddie exist to make housing loans to low-income Americans, so it was inevitable that the two giants would get caught in the quagmire of the housing burst. But the fact is, Fannie and Freddie -- and the executives who ran them and still run them -- have been out to maximize profits. Period. Just the same as every other mortgage and investment bank. High-risk sub-prime loans offered a higher rate of return, so Fannie and Freddie went into them big time. And because of the implicit government guarantee, Fannie and Freddie could take on even more risks and make even more money. Until now. It's another case of socialized capitalism, folks. The largest, yet. Along with making lots of money for investors and their executives, Fannie and Freddie corrupted our political process. They blocked any attempt to reign in the risks. Their lobbyists were and are the most sophisticated and among the most ubiquitous in Washington."
On Fannie & Freddie Accounting Gimmicks
Accounting gimmicks first came to light at Fannie and Freddie in 2003, at which time Fannie's and Freddie's former CEOs were sacked. Why, then, did they continue for another five years, even under new CEOs, even after policymakers first learned of them? Three reasons: (1) Top executives and shareholders continued to profit from them so there was no incentive to stop them, (2) everyone involved kept expecting home values to continue to rise -- or, when they fell, rise again soon enough -- to make up for the accounting shortfalls, and (3) Fannie and Freddie continued to be in bed with Congress and the administration. Democrats and Republicans alike have been complicit in this outrage.
Now, we are told, we have no recourse but to rescue these companies, otherwise we risk a Depression far worse than the Great Depression of the 1930s. The $700B plan Secretary Paulson is championing should be reviewed by every American. This Rescue Plan will bill the American Taxpayers trillions of dollars. This bail out for $700 BILLION dollars (probably trillions) our children and our grandchildren will be in debt for the next several decades. Additionally, the initial draft of this proposal is only bailing out the companies and their investors, NOT the citizens with mortgages. The Dems are asking that the citizens (who took these risky loans) be bailed out as well. The plans are being put in place now. We ALL should study them so we know what we are asking our grandkids to support.
Final Note:
I find the timing of these events incredible. These crises happen just months before the end of the Bush Presidency. He is bailing out his friends and his cronies now, before the Republicans are out of office. How many more of these type of coincidents will we see?
Bush Legacy:
1. Mortgage Co. Bailout
2. Gas prices through the roof ($5)
3. Nafta-Cafta extended to other countries
4. (I am sure there are many more... we should start a list.)
References:

81 comments:

ultima said...

It is indeed unfortunate that you decided that only the Administration is to blame when there is more than enough blame to go around, especially to the Congress that had to approve everything that was presented by the Administration. That includes the present bailout which Democrats will have to approve since they are in control.

Lupita was right, as you pointed out,it seemed inevitable for other reasons like our indebtedness to China, our negative balance of payments, the transfer of our treasure to the Middle East, and then finally the subprime mortgages and predatory lending practices. The title should be, "Why we are all to blame!"

The Arizonian said...

1. It was the Clinton administration that de-regulated the finical industry in 1994, setting the path for this to happen.

2. The economy, and the value of the dollar were actually going down before the election in 2000, specifically 1998.

3. What the Congress is doing now is no different than what FDR did in the 30's, one of the Democratic party's "Heroes".

4. People gambled on the real estate market and lost
As the old saying goes: "A fool and their money is soon departed".

I'll get back to this later.

Dee said...

Ulty,
Please re-read my post. You are right. There is more than enough blame to go around. It is not only the Republicans, although I believe they bear primary responsibility. Congress bears Puhlenty of blame...it is also the fault of all the Democrats and ALL Americans who participated in these greedy pyramid schemes. Plus those buying the mortgages internationally.

Dee said...

Az,
You are one of the McCain people trying to blame the Clintons. To that I say, "HAH!!" (picture Chris Matthews and my Hah is times 10!!)

Do not blame the Clintons and the Dems for putting in legislation to stop Redlining. Puh lease!! None of us are THAT Naive!!

Check out the links and RE READ the "Commodity Futures Modernization Act of 2000."

Dee said...

The saddest thing about your post is your number 4. Blaming the poor Americans who fell for the predatory lenders lines!!

Analisa said...

I am new to your blog. I just want to thank your for this informative blog. I especially like your point that immigration is Not the problem, but the neo-liberal policies that are wreaking real havoc. It saddens me that many people will find it more convenient to scapegoat immigrants than hold the government accoutable. I was delighted to find your blog, Dee... I look forward to reading more.

patriot said...

Anyone who isn't willing to admit that illegal immigration does play a role in "some" of the woes of this country is not in touch with reality but in severe denial.

Dee said...

Analisa,
Welcome! And I hope you come back and visit often.
I invite both sides, ANTI and PRO to discuss Political, Economic and Immigration issues here civilly.
We have some very intelligent commenters on both sides of the issue. Be aware when you participate you may be challenged directly and strongly. I think that is ok as long as we are civil and are not profane.
I know this particular blog discussion will be very, very lively. We have many stong McCain and ANTI supporters who are going to push back on all I have said. I doubt however they will win this argument. The truth may hurt but it does prevail!

Liquidmicro said...

I tend to find this as a very interesting article.

Greenspan’s sins return to haunt us

Back in 2002, when his reputation as “The Man Who Saved the World” was at its peak, Alan Greenspan, former chairman of the Federal Reserve, came to Britain to pick up his knighthood. His biggest fan, Gordon Brown, now the UK prime minister, had ensured that the citation said it was being awarded for promoting “economic stability”.

During his trip, Mr Greenspan visited the Bank of England’s monetary policy committee. He told them the US financial system had been resilient amid the bursting of the internet bubble. Share prices had halved and there had been massive bond defaults, but no big bank collapses. Mr Greenspan lauded the fact that risk had been spread, using complex derivative instruments. One of the MPC members asked: how could this be? Someone must have lost all that money; who was it? A look of quiet satisfaction came across Mr Greenspan’s face as he answered: “European insurance companies.”

The Arizonian said...

Dee said...

Az,
You are one of the McCain people trying to blame the Clintons.


How many times do I have to over this? Ok, print out his comment, and tape it next to your computer screen, so you may reference it at anytime:

I am NOT a Republican
I am NOT a Republican
I am a registered Independent.
I like McCain, as a Senator, not so much as our next President.
I will defend anyone that I believe is being singled out unfairly (I even stood up for Obama once if you recall).

The Arizonian said...

Dee said...

The saddest thing about your post is your number 4. Blaming the poor Americans who fell for the predatory lenders lines!!

And what ever happened to taking responsibility for your own actions? Is that a dead concept now?

What ever happened to just saying 'NO'?

The Arizonian said...

So can I blame the democrats for them taking away the loan-to-deposit ratio requirement? All in the guise of getting poor people homes?

patriot said...

AZ, lol now you know what those of us who have been regulars in this blog for some now have been going through. Alzdheimers and reading comprehension problems run rampant in here.

patriot said...

Exactly, AZ! The pro illegals don't think that there is such a thing as personal responsibility. It is always someone elses fault. Someone enticed certain groups or individuals to break our laws or to make poor financial decisions so therefore they are not accountable for their own behavior and actions. Unbelievable, isn't it?

Alie said...

From everything I have read and heard, both Dems and Republicans are responsible for this mess we are in.

Banks and lending institutions were also greedy, but so were people who wanted to get more than they could afford. It wasn't only the poor either who were bad credit risks and shouldn't have gotten loans, it was also people who just wanted much more than they really could afford.

I have not yet entered the housing market, but common sense would tell me that putting "0" money down on a house is really out there.

So to me, the blame goes around to the government, the borrowers, and the lenders. It's no use to try and put the blame on only one side.

The Arizonian said...

Allie,

I agree. Everyone screwed themselves in this matter, and it was definitely a bi-partisan failing.

My issue is not who to blame, but rather I'm tired of someone bashing one group for every problem.

Let's look at what Bush has been blamed for:
1. Blowing up a levy in New Orleans.
2. War(s) for oil
3. Global Warming
4. High gas prices
5. Allowing school shootings
6. The Economy woes
7. Decline of morals
8. Acne
9. Down's syndrome
10 9/11
ETC. ETC.
Funny thing is, the President, no matter who he is, has very limited control of most of these issues, and he would still need *Congress* to go through with it.

Alie said...

Arizonian, I believe that until the people stop viewing every issue from a partisan prism, we will continue to have politicians who will not do what is best for the country.

Also it seems as though politicians on both sides are more concerned with pleasing special interests than in doing what is best for the nation and its citizens as a whole.

This will be the second election I have voted in and I am already disgusted. I'm not sure that either side has a clue as what to do to really address our problems. I don't know that either McCain or Obama really understand how to fix the underlying problems in our economy. And like you said, its beyond the scope of one president anyhow.

Until we get real leadership in this country--not only the president, but in Congress--anything which is done to address this financial mess will probably just be a band-aid. It's going to take all of us working together--government, citizens, business, banks, etc., to pull out of this. Do we have what it takes to make the tough decisions? I sure hope so.

I'm thinking that this country is going to have to do what a family would do if they found themselves in a financial bind with debt up to their eyeballs and not enough income to cover it. That would be really tighten up, get rid of any extras, no more spending, and pay off the debt. That course of action is really painful and people don't like to do it and instead look for "painless" ways to fix their financial crisis. But I don't know what else works. Then again, I'm not an expert on any of this so maybe I should just shut up now! :))

The Arizonian said...

People do have a tendency to take the path of least resistance (work).

As I have said before:
Nothing meaningful in this world ever came from taking the path of least resistance.

Dee seems to quantify one major aspect of society that always gets us in trouble:

I said:
4. People gambled on the real estate market and lost
As the old saying goes: "A fool and their money is soon departed"(should have been parted, my bad).


Dee replied with:
The saddest thing about your post is your number 4. Blaming the poor Americans who fell for the predatory lenders lines!!

Now, I never mentioned predatory lenders. I was referring to how so many 'average' people became real estate speculators, and investors. They were betting that the market would continue to go up, and sell their house(s) at a high profit. They gambled, they lost.

But of course, some will come out and say that it wasn't these 'average' people's fault. They were all victims. They were duped into buying too much house, too many houses etc.

Then are those that had 'balloon payments' that either forgot, or more likely, thought they would 'flip it' before their balloon payment kicked in.

The Arizonian said...

Well, this is interesting:

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aSKSoiNbnQY0

How the Democrats Created the Financial Crisis: Kevin Hassett

Commentary by Kevin Hassett

Sept. 22 (Bloomberg) -- The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story.

Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex.

But really, it isn't. Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.

Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.

In the times that Fannie and Freddie couldn't make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.

The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.

Turning Point

Take away Fannie and Freddie, or regulate them more wisely, and it's hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened.

It is easy to identify the historical turning point that marked the beginning of the end.

Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Comiission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even ``on the page'' of allowable interpretations.

Then legislative momentum emerged for an attempt to create a ``world-class regulator'' that would oversee the pair more like banks, imposing strict requirements on their ability to take excessive risks. Politicians who previously had associated themselves proudly with the two accounting miscreants were less eager to be associated with them. The time was ripe.

Greenspan's Warning

The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.''

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

Different World

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.

That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''

Mounds of Materials

Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.

But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.

Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.

Clinton, the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than $75,000 from the two enterprises and their employees. The private profit found its way back to the senators who killed the fix.

There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.

Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.

(Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He is an adviser to Republican Senator John McCain of Arizona in the 2008 presidential election. The opinions expressed are his own.)

To contact the writer of this column: Kevin Hassett at khassett@aei.org

Dee said...

AZ,
I never print out anything. I keep spreadsheets instead.
Youve convinced me. I will put this comment about you in your profile.

AZ said...
I am NOT a Republican
I am NOT a Republican
I am a registered Independent.

Dee said...

AZ,
I did not take a predatory loan and I adviced me and mine not to do so either. However, I think of my friend in CA who did and the mortgage consultant that pushed and pushed the loan. I think of that friend of a friend who was a mortgage broker and I know that person was pushing them to poor innocents. What about all the poor retirees that were convinced. The mortgage predators were sharks! Why should only the businesses and investors be salvaged?
However, I get what you are saying and one part of me agreed.

The Arizonian said...
Dee said...
The saddest thing about your post is your number 4. Blaming the poor Americans who fell for the predatory lenders lines!! And what ever happened to taking responsibility for your own actions? Is that a dead concept now? What ever happened to just saying 'NO'?

Dee said...

Alie,
You are right. There is plenty of blame to go around, but some more than others.
From 2002 forward, when all of the mortgage predators started their heavy push, I advised me and mine to only obtain conventional mortgages. The rates were low for them and the risks were far too high for the other types.
While we did not get caught up in the mess, we are all in for it now. That´s the saddest part.

You would have thought we would have learned after the Savings and Loan crisis!

Dee said...

AZ,
In regards to your article, as I said in my original post, Robert Reich clearly defines the Fannie, Freddie issue:
Robert Reich said about Fannie and Freddie:Fannie and Freddie, as Predicted "APOLOGISTS (like your article AZ) will say that Fannie and Freddie exist to make housing loans to low-income Americans, so it was inevitable that the two giants would get caught in the quagmire of the housing burst. But the fact is, Fannie and Freddie -- and the executives who ran them and still run them -- have been out to MAXIMIZE PROFITS. Period. Just the same as every other mortgage and investment bank. High-risk sub-prime loans offered a higher rate of return, so Fannie and Freddie went into them big time. And because of the implicit government guarantee, Fannie and Freddie could take on even more risks and make even more money. Until now. It's another case of socialized capitalism, folks. The largest, yet. Along with making lots of money for investors and their executives, Fannie and Freddie corrupted our political process. They blocked any attempt to reign in the risks. Their lobbyists were and are the most sophisticated and among the most ubiquitous in Washington."On Fannie & Freddie Accounting GimmicksAccounting gimmicks first came to light at Fannie and Freddie in 2003, at which time Fannie's and Freddie's former CEOs were sacked. Why, then, did they continue for another five years, even under new CEOs, even after policymakers first learned of them? Three reasons: (1) Top executives and shareholders continued to profit from them so there was no incentive to stop them, (2) everyone involved kept expecting home values to continue to rise -- or, when they fell, rise again soon enough -- to make up for the accounting shortfalls, and (3) Fannie and Freddie continued to be in bed with Congress and the administration. Democrats and Republicans alike have been complicit in this outrage.

Dee said...

AZ,
Quit all of your spinning. I said ALL had some accountability for this crisis but it is the REPUBLICANS who hold Primary responsibility! Read the next article I am posting. It spells out the issues very clearly!

Dee said...

HISTORY OF EVENTS LEADING TO CURRENT BAILOUT CRISIS:
Part 1

In 1982, the same year John McCain entered the Senate, a bill was put forward that would substantially deregulate the Savings and Loan industry. The Garn-St. Germain Depository Institutions Act was an initiative of the Reagan administration, and was largely authored by lobbyists for the S&L industry -- including John McCain's warm-up speaker at the convention, Fred Thompson. The official description of the bill was "An act to revitalize the housing industry by strengthening the financial stability of home mortgage lending institutions and ensuring the availability of home mortgage loans." Considering where things stand in 2008, that may sound dubious. It should.

Seven years later, the S&L industry was collapsing. What was the cause? Garn-St. Germain handed the S&Ls a greatly expanded range of capabilities, allowing them to go head to head with full service banks, but it didn't give them the bank's regulations. Left to operate in an anarchistic gray area, S&Ls chased profits, indulged in amazing extravagances, and cranked out enough cheap mortgages to fuel a real estate boom. They also experimented with lots of complex, creative -- and risky -- investments, even though they didn't have the economic models to really determine the worth of the things they were buying. The result was a mountain of bad debts and worthless "assets." Does any of that sound eerily (or nauseatingly) familiar?

It wasn't a foregone conclusion. In 1985, three years after the deregulation of the S&Ls, the chairman of the Federal Home Loan Bank Board saw that the situation was already looking shaky, with the potential to become much worse. He instituted a rule to limit the amounts and types of investments S&Ls could carry on their books in an effort to head off disaster. However, many savings and loans -- among them Lincoln Savings & Loan Association of Irvine, CA, which was headed by a fellow named Charles Keating -- promptly ignored these rules.

Now enters a familiar cast of characters. First to pop up was the universally beloved Fed-chief-to-be, Alan Greenspan. Greenspan argued against the loan board's new rules, and persuaded Reagan to appoint one of Keating's pals to the board to blunt the requirements. A quintet of senators, among them John McCain, began having meetings with both the management at Lincoln and the regulators at the loan board. ] Alan Greenspan also helped out with a letter to the regulators, asking that Lincoln be exempt from the new rules. With their help of Greenspan and their pet senators, Lincoln was able to stay in business an additional two years, at the end of which they failed -- taking the life savings of 21,000, mostly elderly, investors with them.

How involved was John McCain? McCain and Keating had known each other since 1981 and had become fast friends. Of all the "Keating Five," it was McCain who moved into the life of the Lincoln S&L chief. The two men vacationed together multiple times, with the whole McCain clan (babysitter included) heading out for Keating's private Caribbean property on Keating's private jet. McCain didn't think to actually report these trips, or pay for them, until the investigators were breathing down his neck. And McCain took his payment in the form of more than just vacations. Keating and other members of Lincoln's parent company padded McCain's pockets with $112,000 in campaign contributions.

In John McCain's biography, he called his meetings with Keating and regulators "the worst mistake of my life," though from the text you'd think this was a spur of the moment decision, not something that McCain did repeatedly over a space of years. Still, you might think that a "worst mistake" would stay fresh in his memory.

It certainly didn't fade quickly for the country. Following the S&L crisis, the Resolution Trust Company was formed to swallow up the debt of Lincoln and 746 other S&Ls gone wild, and taxpayers were left with the $125 billion bill. The resulting budget deficit forced cutbacks in other programs. The artificial real estate boom collapsed and housing starts fell to their lowest levels in decades. Finally, the whole nation settled in for a period nasty enough that three years later someone could still campaign around the idea "It's the economy, stupid."

Dee said...

HISTORY OF EVENTS LEADING TO CURRENT BAILOUT CRISIS:
Part 2

Even so, by 1999 Phil Gramm -- who had entered the Senate two years after McCain and quickly become the economic guru of the Keating Five maverick -- put forward the Gramm-Leach-Bliley Act. This Act passed out of the Senate on a party line vote with 100% Republican support, including that of John McCain. (To be fair, the bill eventually passed again with a wide margin following revisions in the House.)

This act repealed part of the Glass-Steagall Act. This may sound like a bunch of Congressperson soup, but the gist of it is that Glass-Steagall was put in place in 1933 to control the rampant speculation that had helped cause the collapse of banking at the outset of the depression, and to prevent such consolidation of the banks that the nation had all its eggs in one fiscal basket.

Gramm-Leach-Bliley reversed those rules, allowing not only more bank mergers, but for banks to become directly involved in the stock market, bonds, and insurance. Remember the bit about how S&Ls failed because they didn't have the regulations that protected banks? After Gramm-Leach-Bliley, banks didn't have that protection either.

Gramm wasn't done. The next year he was back with the Commodity Futures Modernization Act, which was slipped into a "must pass" spending bill on the last day of the 106th Congress. This Act greatly expanded the scope of futures trading, created new vehicles for speculation, and sheltered several investments from regulation.

As with both Gramm-Leach-Bliley and Garn-St. Germain, large parts of this bill were written by industry lobbyists. This famously included the "Enron Loophole" that exempted energy trading from regulation and was written by (big suprise) Enron Lobbyists working with Gramm. Not coincidentally, Senator Gramm, the second largest recipient of campaign contributions from Enron, was also key to legislating the deregulation of California's energy commodity trading.

Thanks to this fortunate trifecta of Gramm-crafted legislation, Enron was able to create "EnronOnline" and trade electricity in California with absolutely no oversight or transparency. They quickly worked out how to game the system. Previously, there had been only one Stage 3 rolling blackout in the history of California. Within months, the system had been manipulated by traders to generate 38 such blackouts and wholesale electrical prices had gone up more than 3000%. Despite production capacity equal to four times the demand during winter, energy traders even engineered a blackout in mid-January.

During the confusion of these deliberate "shortages" and "price spikes," the California administration of Gray Davis -- blind to speculator manipulations because of the walls erected by Gramm's legislation -- was forced to sign energy contracts at enormous rates. There was little choice, because most of California's public utilities were on the brink of bankruptcy from the rising wholesale prices.

In a single year, Gramm's legislation allowed speculators to bring the state to its knees. Enron alone looted California of $11 billion. The manipulations of the energy market were also a major factor in Davis getting the hook, helped usher the governator into power, and they still have repercussions in California's budget battles today. By the end of that year, the depth of Enron's deception could no longer be hidden, and the whole company came crashing down in the largest bankruptcy in history -- at the time. This brought more billions lost in mutual funds and pension funds across the country, and played a major role in the economic downturn of 2001.

But that was only the second act. The combination of Gramm-Leach-Bliley and the Commodity Futures Modernization Act was a toxic cocktail whose total damage was greater than the sum of its parts.

The first Act promoted bank buyouts and mergers that reached such an insane pitch that the average consumer could only keep up by tracking the changing names on their checks and credit cards. Mercantile buys Ameribanc and Mark Twain. Firstar buys Federated and First Colonial. US Bancorp buys Mercantile and Firstar. And, because it allowed brokerages and insurance companies to mingle with banks, the Act cemented a trend that was already (and illegally) underway in which all those terms had become rather quaint. Is Wachovia a savings bank, an investment bank, a brokerage, or an insurance provider? The answer is "yes."

In allowing financial institutions to grow to Godzilla-sized proportions, Gramm-Leach-Bliley helped ensure that we would have financial entities that were "too big to fail." Rather than choosing to enforce rules that kept these institutions apart, the deregulators chose to create monster bankeragasurances whose downfall (and existence) was enough to threaten the whole system.

But if Gramm-Leach-Bliley removed the limits on size and scope, these new institutions still needed fuel. With many financial transactions operating on razor thin margins, and increasing automation sapping the profits from trading of all sorts, they needed a new way to generate the funds required to swallow their brethren in the merged fiscal corporation pond. For that, the Commodity Futures Modernization Act was a godsend.

Among those instruments which the CFMA sheltered from regulatory scrutiny was something called the "credit default swap." A kind of insurance one bank could exchange with another, credit default swaps supposedly made it safe for banks to take on ever riskier forms of debt. The Act didn't invent these swaps, though they were relatively new. Instead, by placing them in a state where they were not only unregulated but almost perfectly opaque, credit default swaps were turned into the perfect vehicle to fuel a Wall Street revolution. No one had any idea what these things were actually worth, they were traded "over the counter" without being administered by any exchange, and even the SEC could monitor their existence only indirectly.

Who would cheer for a new kind of financial instrument that was difficult to understand, invisible to regulators, and impossible for even the whizziest of Wall Street whiz kids to value? Guess.

More recently, instruments that are more complex and less transparent--such as credit default swaps, collateralized debt obligations, and credit-linked notes--have been developed and their use has grown very rapidly in recent years. The result? Improved credit-risk management together with more and better risk-management tools appear to have significantly reduced loan concentrations in telecommunications and, indeed, other areas and the associated stress on banks and other financial institutions.
--Alan Greenspan, 2002

Get that? Greenspan loved credit default swaps. He opined again and again that such instruments would be the salvation of the industry by spreading around risks. To the mighty Greenspan, both their complexity and their lack of transparency were good things, since swaps would only be handled by the big boys who knew how to play with fire.

When questioned about his support of Gramm's legislation, John McCain called his friend (and by then, campaign co-chair) Gramm "one of the smartest people in the world on the economy" and pointed out that Greenspan also favored the acts Gramm and his coalition of lobbyists had authored. If both Gramm and Greenspan were on his side, McCain couldn't possibly be in the wrong.

Except, of course, that he could.

Dee said...

HISTORY OF EVENTS LEADING TO CURRENT BAILOUT CRISIS:
Part 3

From the beginning, there were plenty of people in the financial community whose opinion of these unregulated credit swaps was not as rosy as that of Gramm, Greenspan, and McCain. Chief among those speaking in opposition was SEC Chairman, Arthur Levitt. Levitt argued that what the industry needed was more transparency, especially when it came to complex instruments like default swaps, and he testified to this before Gramm's Senate Banking Committee,.

"In my judgment, the risk of this regulatory approach is simply unacceptable for America's investors."
--Arthur Levitt, 1999

Gramm paid no attention.

Credit default swaps did allow the banks to share risks. So much so, that banks raced each other in an effort to find more risks. They made it possible for the down payment on homes to become 3%, 1%, 0%. Skip the credit check, avoid the employment requirements, damn the torpedoes, full speed ahead! We've got a credit default swap, we can do anything!

The encouragement and "safety" that credit default swaps provided made the sub-prime mortgage market possible. Just as with the deregulation of S&Ls in the 1980s, the market was suddenly flooded with easy credit. The result was a real estate boom, soaring home prices, and a plague of "Flip that House!" shows on cable.

As the banks piled up crappy mortgages, they heaped on ever more of the credit default swaps -- and they still had no idea how to value the things. Worse, they began to trade the swaps themselves as if they were an investment, treating them like something worth holding instead of a big bundle of cartoon bombs whose fuses were already lit. Since very few loans were falling into default at the time, owning a default swap seemed like a way to collect fees without ever paying out. Banks wanted more, and more, and more.

A secondary market for trading swaps exploded into existence, and swaps were traded with absolutely no consideration for the nature or quality of the underlying investment. Swaps changed hands a dozen or more times, growing in "value" as they went. Worse still, no one regulated who could buy a swap, so it was (and is) perfectly possible for a company to acquire swaps that theoretically cover billions of dollars in loans, even if that company doesn't have a red cent on hand to cover those swaps should the loans default.

How big did this market become? Here's business correspondent Bob Moon and host Kai Ryssdal on American Public Media's Marketplace from back in the spring.

BOB MOON: OK, I'm about to unload some numbers on you here, so I'll speak slowly so you can follow this.

The value of the entire U.S. Treasuries market: $4.5 trillion.

The value of the entire mortgage market: $7 trillion.

The size of the U.S. stock market: $22 trillion.

OK, you ready?

The size of the credit default swap market last year: $45 trillion.

KAI RYSSDAL: That's a lot of money, Bob.

As in three times the whole US gross domestic product, Bob. And the truth is that Moon probably underestimated. The unregulated and poorly reported credit default swaps may have actually passed $70 trillion last year, or about $5 trillion more than the GDP of the entire world.

So, are you starting to get an idea of just how big a genie Phil Gramm and his pals unleashed?

With some regularity over the last eight years, fiscal whistle blowers have tried to raise their hands and register a protest. Um, sirs? Is it altogether a good idea to run up debts exceeding all the assets it's even possible to hold? But so long as no one actually had to pay off on the swaps, the party went on. Even usually conservative (in the fiscal sense) companies like AIG started to worry that they were being left behind and leapt headlong into the swap pool.

Shortly after Greenspan's departure in 2006, the Federal Reserve took the unusual step of issued a joint statement along with the SEC to warn about the risks associated with credit default swaps. But by that point, the damage was already severe. If swaps lost their value, most of those who had played the game would find their giant firms abruptly valued in pocket change. The only solution was to cover the problem with still more swaps and keep moving.

Then a funny thing happened. After years in which banks had handed out loans willy-nilly, guarded by the indestructible swap, people and companies started to really default on those loans. Credit slowed, home prices fell, and the whole snake started to eat itself tail first. Suddenly, credit default swaps were not sources of limitless cash. It turns out that an insurance policy -- even a secret, unregulated policy -- is occasionally expected to pay. Speculators started to look at the paper they were holding and for the first time realized it could all be worthless. Worse, it could (and did) represent a massive debt; one that no one had the funds to cover.

When Bear Stearns fell apart last March, it was only suspected that a big part of the effort in saving the giant investment bank was keeping their holdings in credit default swaps from unraveling and spreading to other institutions. Naturally, part of solving this problem involved creating a new credit default swap to cover Bear Stearn's potential debt. But the all-purpose swap was starting to lose its power. Shortly after Bear Stearns went belly up, AIG reported the largest quarterly loss in the company's history, taking a $11 billion hit on revaluing its holdings of swaps. The party was definitely coming to a close.

When AIG finally collapsed this week, there was no doubt about the primary cause of its failure. The previously well grounded company had "gotten itself involved with something called credit default swaps." Point of irony alert: Arthur Levitt now serves on the AIG board... or at least he did until the government had to take over most of AIG to salvage the company from the very idiocy Levitt had warned of in 1999.

This week, the Bush administration announced the beginnings of a plan to salvage what remains of the financial markets. At first glance, it appears that the plan will consist mainly of creating a kind of "garbage pit," a fund or group of funds -- cousins of the Resolution Trust that was created during the S&L crisis -- into which those people who have dabbled in bad debts can toss their problems. Only this time the cost to the taxpayers is at least $700 billion... and a big bite out of representative democracy.

The expansion of unregulated Savings and Loans in the 1980s brought on the collapse of that industry, a crippling of the economy, and left taxpayers holding the bag. Maybe that was only happenstance. Those pushing for the Garn-St. Germain Depository Institutions Act may not have known what they were doing.

The deregulation of the California electricity market, along with the protections provided to Enron through Phil Gramm's lobbyist-written legislation brought blackouts, fiscal and political chaos, and left taxpayers holding the bag. But the people who engineered that event -- people like Gramm and Greenspan -- had already seen what happened with the S&Ls. They should have known better. Still, perhaps that was only coincidence.

The sub-prime mortgage crisis that has not only come so close to utterly destroying the markets, but has ruined the value of many people's homes and left millions with mortgages they can't pay, was also the outcome of the deregulation created by these men. The very predictable outcome. When taxpayers are left holding the bag for $1 trillion this time around, it's hard to believe it's any sort of accident.

This is enemy action. This is a bullet deliberately fired into the economy by men willing to exercise their ideology regardless of the cost to taxpayers. Men who have every expectation that they can plunder the system again and again, while the public picks up the tab. John McCain may not have had his finger directly on the trigger, but he was there. He assisted. These were his personal friends and philosophical comrades. He may not be the high priest, but he has been a loyal acolyte in the cult of deregulation.

It may come as a surprise to the champions of deregulation, but nobody likes regulation. The restrictions that were placed on banks, S&Ls, and other institutions in the 1930s weren't put there because someone thought it would be fun. They were put in place because they addressed problems that had just been clearly and painfully revealed. They were put in place because they were necessary.

It's bad enough if John McCain didn't know that. It's far worse if he did.

Dee said...

Az,
From this article is the perfect response to your earlier question: BLAME McCAIN´s Buddy -- GRAMM!

From the previous article:
"Gramm paid no attention.
Credit default swaps did allow the banks to share risks. So much so, that banks raced each other in an effort to find more risks. They made it possible for the down payment on homes to become 3%, 1%, 0%. Skip the credit check, avoid the employment requirements, damn the torpedoes, full speed ahead! We've got a credit default swap, we can do anything!
The encouragement and "safety" that credit default swaps provided made the sub-prime mortgage market possible. Just as with the deregulation of S&Ls in the 1980s, the market was suddenly flooded with easy credit. The result was a real estate boom, soaring home prices, and a plague of "Flip that House!" shows on cable.


AZ earlier question...
The Arizonian said...
So can I blame the democrats for them taking away the loan-to-deposit ratio requirement? All in the guise of getting poor people homes?

The Arizonian said...

i was not spinning, I said it was interesting.

The Arizonian said...

I am going to go out on a limb here:

What is so bad about the Mortgage/financial sector collapsing?

Open for comments.......

Anonymous said...

I am aware that as soon as you say conspiracy theory, people lock up and discount why they exist.
Is it the republicans? Democrats? or is there any truth to the NAU? The NWO? We all can AGREE that there is CORRUPTION!

Dee said...

Anonymous,
I agree.
There is Corruption!!

Take a look at these 32 words in the Bailout package, "Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency."

We are giving away the Farm!!!
CORRUPTION!!!!!!!!!!!!!!!!!!!!

Anonymous said...

Dee,

If I had ANY doubt before, you just confirmed what I have BEEN questioning all along. ( by the way,Huffington post?-they are screaming that)

What do you think about the NWO or other theories?

Dee said...

HP and other sites spotted the 32 words in the text of the Bailout Plan, yes. We should all be aware of them.

Regarding New World Order and Conspiracy Theories? I don´t know.
However, when you consider Bill Kristol and PNAC, why wonder about conspiracy theories? They are the Right Wing Conspiracy Hillary spoke of. Cheney, Wolfy and others were all members! Very Scary Dudes! And we allowed them to run this administration for the last 8 years and look what happened!

Dee said...

You are probably familiar with PNAC but for those not familiar, here it a link.

http://en.wikipedia.org/wiki/Pnac

Anonymous said...

If you listen to the CT ( conspiracy theories) they speak of CFA-and how they are all tided in together.
Let me ask you how do you feel about the NAU? It has been discounted on the 'offical site' but are we sure? And why not if there is the EU and so on? With the economic crisis, wouldn't that put everything in to play for the Amero and everyone pulling together and the reasons of NAFTA? Just look at the bail out now and how they are talking about having to bail out FOREIGN banks??? That sounds to me like we are all tied together.

Anonymous said...

Dee,

Sorry, I am NOT familiar with PNAC but failed to mention why I brought up CFA. Hilary may have warned against them but she is a member...

Dee said...

Anon,
Sorry. I dont buy in to Conspiracy Theories.
I see the reality of what is happening today and I know, in many cases, it is far worse than any theory that can be made up.

(Especially conspiracy theories made up my someone like Malkin!)

Dee said...

Here is more on PNAC! This is reality!

PNAC:
The Project for the New American Century (PNAC) was an American neoconservative think tank based in Washington, D.C., co-founded in early 1997 as "a non-profit educational organization" by William Kristol and Robert Kagan. The PNAC's stated goal is "to promote American global leadership." Fundamental to the PNAC are the views that "American leadership is both good for America and good for the world" and support for "a Reaganite policy of military strength and moral clarity." It has exerted STRONG influence on high-level U.S. government officials in the administration of U.S President George W. Bush and strongly affected the George Bush administration's development of military and foreign policies, especially involving national security and the Iraq War.

Dee said...

More on PNAC:
On January 26, 1998, in the PNAC's open letter to President Bill Clinton, its members explicitly called for a U.S. ground campaign to oust Saddam Hussein from power in Iraq.
Members included Rumsfeld, Cheney, Wolfowitz, Libby, and Rove.

Dee said...

I am curious about what McCain´s supporters think about McCain´s latest recommendations. Won´t his supporters be MAD at him???

Recommendation 1:
Republican John McCain cited New York Attorney General Andrew Cuomo, a Democrat, as a potential successor to Christopher Cox, chairman of the U.S. Securities and Exchange Commission.

Recommendation 2:
McCain praised Paulson and said he had spoken to him several times over the weekend. But the GOP presidential hopeful nonetheless called for a bipartisan oversight board to supervise the proposed bailout, to be led by Warren Buffett or another widely respected business leader.

McCain suggested his one-time rival for the GOP nomination, former Massachusetts Gov. Mitt Romney, and New York Mayor Michael Bloomberg be part of the effort as well. Both men made multimillion-dollar fortunes in business before entering politics.

ultima said...

Obama is lucky that he was not there to vote "present" when these matters were considered. But one could hardly expect more from him given his sparse record of achievement.

The Arizonian said...

Dee,
go look up Billdeberg- It's a real organization, the real plans, and real backing.

There are conspiracies in the world you know.....

And theories become fact over time.

The Arizonian said...

Dee said:
I see the reality of what is happening today and I know, in many cases, it is far worse than any theory that can be made up.

My favorite definition of reality:
'something that is neither derivative nor dependent but exists necessarily'

Reality is perspective based, not so much fact based. Fact is based on historical events. Truth is the collective of 'reality'. Facts, reality, and truth do not always coalesce.

Trust me, the 'facts' are much worse than what can be made up.

ultima said...

Ariz, regarding the bailout. I don't think anyone really knows what the result would be if there were no bailout. Some believe with good reason that it would result in a worldwide depression like 1929 -- a Danish cousin recently raised this specter with me but, at the time, only Lehman and AIG.

I have little sympathy for builders, subprime lenders,and home owners who acquired more house than they could afford. On the other hand I am sympathetic to those whose life savings or 401ks would be in jeopardy.

I certainly favor an end to golden parachutes for those responsible and perhaps some legislation that ties executive comp to workers comp in a constant ratio by industry and size of company -- perhaps even restoring it to what it once was.

This is blasphemy for a Republican like me but it just goes to show that neven nominal Republicans can have differing viewpoints.

The Arizonian said...

Ulty,

I agree. I'm tired of government helping people eliminate their mistakes instead of letting them learn from them.

The only reason I can see for the bail-out is how inevitably the markets have become intertwined with every aspect of life. This should have never been allowed to happen.
The stock market is nothing more than a place to trade small bits of companies around.
Mixed with that is commodities markets, which have become prey to investors using these commodities to hedge off from the stock market, causing the price food and other essentials to rise.
Then, we have the credit industry (the big culprit right now). People need to learn how to live within their means. If you can't afford it now, why pay an additional 40% over the next 20 years or so, paying the minimum?

I do believe that greed plays a huge part in this. Especially in regard to commodities.

Dee said...

AZ,
I am familiar with the Bilderburg Group. Many of the American members were in PNAC. Cheney, Kristol and others. Same right wing conspirators we hear tell about. I would not be surprised if they are planning the NWO.
This whole bailout smells of PNAC and NWO.

The initial proposal is $700B with no oversight, carte blanche. They are telling us the alternative is the worst depression in history. They want a decision NOW. This week! What a choice. All we can do is sit and watch.

The timing, so close to the end of Dubyas term is office, is TOO MUCH OF A COINCIDENCE!!!

Dee said...

Ulty,
This is what worries me most. Imagine. No bailout. Then we are all wiped out after all these years of work!!


Ultima said...
On the other hand I am sympathetic to those whose life savings or 401ks would be in jeopardy.

Dee said...

Did you read what Ron Paul said?

He is proposing NO BAILOUT. No Government Intervention. Roll back Laws and Regulations. Decrease the budget. And let the chips fall where they may. (Yikes!)

Here is the summary:
1. Too much government meddling in economy caused crisis
2. the bailouts are another case of excessive intervention in economy
3. The government isn't letting the market adjust prices to lower levels.
4. Bailout will only increase financial instability in the long run

The Arizonian said...

Well, maybe Dr. Paul is right: Government usually screws this up.

To allow bad companies to fail *should* leave the smartest and best to survive. Call it "Economic Darwinism".

Dee said...

Didnt they do that in the 30´s Az? I know Wall St. jumped out the windows, but all of our grandparents suffered the Grapes of Wrath.

Maybe we should ALL watch that movie this week as a reminder!

The Arizonian said...

The Grapes of Wrath had more to due with the dust bowl, making farming almost impossible. The market crash effected the ability to buy things on credit, and those who had debts called in by the bank (which can still happen today). Did we learn our lesson from that adventure? Of course not. We still believe that the stock market actually runs things, when it shouldn't.

It only does because businesses usually invest portions of their worth into fund, stocks, and other financial goods to further there business. So naturally, when the market takes a hit, these other businesses freak out and lose portions of their own business. Not because their sales may be down, but because they coupled the welfare of their company directly to the welfare of other companies.

Kinda like tying yourself to 20 other people for 'safety', then falling into a lake all together.
You may have a better chance of swimming without having been tied to 20 other people.

The Arizonian said...

I still Expect the 'Amero' to get some talk here soon.

The Arizonian said...

Form the Federal Reserve's own FAQ's:
http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5

Why did Congress want the Federal Reserve to be relatively independent?

The intent of Congress in shaping the Federal Reserve Act was to keep politics out of monetary policy. The System is independent of other branches and agencies of government. It is self-financed and therefore is not subject to the congressional budgetary process.

Dee said...

AZ,
The Amero will never happen any time soon.
The Euro happened because all European states involved believed they were all close to equal.
While the USA may accept Canada for a common currency, they would never accept Mexico as equal.
There are too many in the US that believe they are far superior to MX and would never, ever let it happen. At least, not any time soon.

Dee said...

Most on your side only want the Latinos as the workers ready to exploit.

Dee said...

My father experienced the Grapes of Wrath. After the depression, his family lost everything. His father took him out of school and they all became migrant workers.

If the economy fails, I believe the same will happen. The people will be left with nothing. We will all be forced into manual labor.

Ron Paul is asking for this.
If this happen, I believe the people with the work ethic mentality will be the survivors.

patriot said...

I believe that AZ said he was an independent, so what do you mean by those on "your" side only want Latinos to exploit, dee? Who is "your" side anyway? It can't be the anti's because if you are talking about illegal aliens, we want them deported, not exploited. If you are talking about the Republicans,some may want illegal aliens exploited for their cheap labor but they would only be the business people not your regular American Republican citizen for the most part and you can't be serious if you don't think that some Democrats both business people and regular Democrat citizens do likewise. Latinos are not the only illegal aliens either and Latino citizens are not the only ones doing manual labor work either. You aren't making a whole lot of sense here.

You use the word Latino. Are you talking about citizens or illegals?

ultima said...

"If the economy fails, I believe the same will happen. The people will be left with nothing. We will all be forced into manual labor. "

Not going to happen but manual labor never hurt anyone. In fact, maybe we should get used to thinking in those terms as our economy is overrun by immigrants. So maybe we should get a little more info about Obama before election day. Columbo has a few questions for him.

ultima said...

Columbo

The Arizonian said...

Dee muttered:
Most on your side only want the Latinos as the workers ready to exploit.

Jesus H. Christ....

How many times do we have to go over this?

I guess between my cross burning ceremonies and my minority suppression classes, I didn't have time to explain that I am an INDEPENDENT....

Oh wait, I did......

The Arizonian said...

I predict that the 'Amero' will be at least discussed openly to the American people in the next 18 months as a way to hedge against inflation, economic crisis, etc..

patriot said...

AZ, yeah I make my own crosses out in my garage, it is cheaper that way, lol. How many nights a week do you attend those "minority suppression" classes? I have a busy schedule so only go once a week, lol. I told you dee appears to have alzmeimers, lol. You will have to tell her over and over that you are an Independent. You see she thinks that all anti's are Republicans. Even Lou Dobbs is an Independent!

The Arizonian said...

The problem is, I'm not anti-immigration, just anti-illegal activity. Being for pro-illegal-immigration seems to be the same as pro-drunk-driving.

After all, both can be done without anyone getting hurt, but they're both still illegal.

patriot said...

And I agree with you AZ. I am not anti-legal immigration but anti-illegal immigration. As for legal immigration though, I still think we need to make sure that we absorb only the numbers that will benefit our country rather than harm it. Also, too many from one ethnic group is not only unfair to other potential immigrants but it makes assimilation even harder.

Dee said...

AZ,
Being Independent is your political preference.
Being an ANTI is your Immigration choice.

The Amero will only be openly discussed is McCain is elected! (yikes!)


The Arizonian said...
I predict that the 'Amero' will be at least discussed openly to the American people in the next 18 months as a way to hedge against inflation, economic crisis, etc..

Dee said...

AZ,
I have told you at least a hundred times, I am PRO Immigration Reform.
Let me repeat it so it sinks in.
PRO Immigration Reform
PRO Immigration Reform
PRO Immigration Reform
PRO Immigration Reform
Did it sink in yet?

And being PRO Immigration Reform is like being against Jim Crow Laws and PRO Civil Rights and PRO Women´s Rights which many of the ancestors of your side also opposed!

The Arizonian said...
The problem is, I'm not anti-immigration, just anti-illegal activity. Being for pro-illegal-immigration seems to be the same as pro-drunk-driving.

Dee said...

And your side is ANTI Immigration Reform!!

I will help you let it sink in:
ANTI Immigration Reform
ANTI Immigration Reform
ANTI Immigration Reform
ANTI Immigration Reform
ANTI Immigration Reform

There. All Better!

The Arizonian said...

Dee muttered:
And your side is ANTI Immigration Reform!!

Wow, I am on a side now?

Besides, as a have said before, I am all for Immigration reform. If you go back through all my posts that becomes evident Dee......

The Arizonian said...

Dee slandered:

And being PRO Immigration Reform is like being against Jim Crow Laws and PRO Civil Rights and PRO Women´s Rights which many of the ancestors of your side also opposed


.........

Well, I hope you meant the ancestors of a side, since I am not on a side. Independent and all.....

patriot said...

It isn't that anti's are not for a CIR, it is just that our version is different than dees and the rest of her pro-illegal ilk.

Dee said...

Pat,
Stop saying Ilk.
Try to stay civil!

Dee said...

AZ,
You are only independent when it comes to Democrat or Republican.

You have already said you are ANTI Immigration Reform!

patriot said...

Dictionary.com Unabridged (v 1.1) - Cite This Source - Share This
"ILK" /…™lk/ Pronunciation Key - Show Spelled Pronunciation[ilk] Pronunciation Key - Show IPA Pronunciation
–noun 1. family, class, or kind: he and all his ilk.
–adjective 2. same.

b. of the same class or kind.


NOW PLEASE POINT OUT THE UNCIVILITY OF THE WORD ILK, DEE!

proudindepat said...

No one, especially Democrats, will address the elephant (not GOP mascot) in the room. The bureaucracy that is and has been for years the real life version of the 50's monster, the Blob. Obama and Democrats have a vested interest in maintaining the mind-boggling largesse of the federal government and cannot be trusted to control it. Why is it that Clinton cronies and Obama advisors have extracted millions from F/F and the highest contributions are to Obama and other Democrats but nobody is talking about it? If its mentioned at all it is quickly dismissed in a deluge of anti-Republican and anti-McCain vitriol. This just goes to show why Democrats are on the wrong side of issue after issue and lose all credibility because they don't recognize any accomplishments or ideas of Republicans. It is because they are in the tank for MSM leftists and the extremist blogs that should be absolutely removed from the debate.

The Arizonian said...

Dee,
Are you insane? when did I ever, I mean ever, say that I was Anti-Immigration reform? Show me the post:


---------
Now if I may:
http://immigrationmexicanamerican.blogspot.com/2008/09/why-antis-are-losing-argument.html
The Arizonian said...

Besides, the law is the law. We cannot simply overlook the law because we don't like the law. If you don't like the law, then fight to have it changed.

I am one of CIR's biggest advocates. I don't believe a fence solves the problem (ask the French, Chinese, Russians). A fence slows people down though, which is why I supported it. You also need humans on the border.

But this only works when you have a system in place to allow legal migrant workers, one with some real capacity.

But this in no way means that one can circumvent the law.


The Arizonian said...

Dee said
Az,
EXACTLY!!
And that is EXACTLY what we are doing now! We will accomplish the change with CIR!

And I want CIR..... I support it, just in case you didn't notice the other 50 times or so that I said i wanted CIR......

But, until CIR is passed, we still have to enforce the law as it stands.


The Arizonian said...

Patriot said:
Arizonian, just curious as to what kind of CIR do you want passed and if you think it would be in the best interest of this country now and in the future and why?

That seems like a loaded question, but I will try my best.

1. Permits
Take a serious look at the process for issuing "Migrant worker permits" and figure out what is preventing people from attaining one. If it is related to paperwork provided my the Mexican government (or lack there of) we need to pressure the Mexican government to provide more documentation to their citizens.

2. The "Amnesty" issue.
This is where I differ from most other conservative. If someone has been in the US ten years or longer, and been lawful enough to avoid capture (IE hasn't been busted for any crime) that would show that they take being in the US seriously enough to maybe allow them to continue working pending an inquiry. I have to admit that some of the "illegal" population (of course most of these have overstayed their visas) have behaved better than our "native-born" citizens. So I figure that if they have stayed out of trouble for ten years, why not allow them to stay and continue contributing to the country while things are sorted out.

3. Migrant workers.
I actually have no problem with issuing temporary worker permits to those that with to do jobs short-term. Mexican nationals are very patriotic of their country as a whole, and don't wish to be US citizens. Most are just trying to feed their families back home. I actually find this a noble cause: traveling to a far land to support their family. Most Americans seem to complain if they have to walk across a parking lot to go into a store to use their platinum credit cards.

4. The Wall
I understand that a wall will only slow down the flow of those crossing the border in a place other than a port of entry. I support a wall, although it's effectiveness will be a nuisance to those coming here at best. There has been many walls throughout history: Great wall of China, The Maginot Line in France, the and Berlin wall to name a few. And they worked, for awhile. Although I don't agree with some who think that "unauthorized immigrants" will just parachute over the wall. That is a defeatist mentality, and nothing will be good enough. Mexico has a wall along it's southern border, and the kill, rape and imprison anyone that comes across it.

5. Policy
The greatest thing that could happen is the overthrow of the Mexican government. They have the third largest economy in the world, and yet so many of their population are in despair. Maybe, just maybe, we should support an overthrow of their government and help them start a truly democratic form of government to replace their corrupted Marxist government. Then, in time, there will be enough opportunity in Mexico that people won't need to flee to the US.
I understand this is a controversial idea, just posing it as a possibility.



Should I continue correcting you?
Take your meds.....

Proudindepat said...

CIR passed? And exactly what will this dim-led Congress do to enforce another law? Probably make them all legal is my guess. And voters.

patriot said...

AZ, I agree with all of your ideas for CIR except for point number 2. Part of CIR should be the making e-verify mandate in the workplace.

The Arizonian said...

E-verify bugs me because there has already been a system in place for about 70 years or so. I guess they just finally made it digital.

Sorry I forgot to mention E-verify...

Besides, I did say "pending an inquiry".

patriot said...

Today e-verify is 99.5% accurate.

Liquidmicro said...

OBAMA: "We're also going to have to look at, how is it that we shredded so many regulations? We did not set up a 21st-century regulatory framework to deal with these problems. And that in part has to do with an economic philosophy that says that regulation is always bad."

THE FACTS: Some of the abuses that occurred stemmed from the 1999 repeal of a Depression-era law that separated banks from brokerages. In legislation supported by former President Clinton and Robert Rubin, now a top Obama adviser and treasury secretary in the Clinton administration, this separation was ended - allowing banks and insurance companies to sell securities.

But while regular banks were strictly regulated by the government, Wall Street banks and other non-bank institutions - many of the same institutions whose abuses led to the current crisis - were allowed to operate with less regulation.

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