[Ministry of Truth] Republicans re-writing history of financial crisis

I believe those things strongly but I also agree with the notion that the people that recieved that capital for homes, college, autos, clothes or whatever share responsibility in that they agreed to the terms.

While I don't believe in a Dubai style debtors prison, I don't think walking away from an underwater mortgage with only the asset lost and a credit record tarnished should be legal.

The biggest factor to me in this crisis was the Net Capital Rule which allowed institutions over $5 billion in assets to leverage to all hell. Instead of all of this legislation, rules, departments and othe nonsense just reinstate this leverage rule and the current crisis looks more like the LTCM failure coupled with an acceptable housing recession.

 

That's the law under the loans were written under. The banks should have had a massive real estate failure factored in since they have the rocket scientist. If walking away is the best choice for your family, then walk. Rental rates are going to be cheap.

 

Well said. Sounds like something I'd say.

 

http://english.aljazeera.net/indepth/opinion/2010/12/201012973441995283.html

http://www.usfinancialpost.com/wall-street-big-bonus-payouts-in-spite-of-reform/851075/

good times.

 

The only people who will really care about this report are historians. And, they'll know better than to buy a piece of partisan propaganda. So, they're consigning all their work to the trash can, essentially. No big deal.

 

So what's his solution? Let government stand aside while big corporations can do whatever the hell they want? And have corporations rule over America?

Or is he implying that we need Superman to balance and checking big corporate America instead?

 

These pieces of **** need to be dragged out of their limousines into the streets and beaten to death in full public view.

 

Larry King: Are you saying you like the current system?

Ron Paul: No, I probably dislike it as much as Michael Moore does. But he’s complaining about it being part of capitalism. It has nothing to do with capitalism. This is corporatism, the corporations. I agree with him. Corporations run things; the drug companies’ lobbyists, the insurance companies’ lobbyists and the hospital managements’ lobbyists, the AMA lobbyists and that’s all managed care and we have a system where money and bigness influences the government, but that’s corporatism. That’s not capitalism. But we want our free markets…

Larry King: Okay, how do you change that?

Ron Paul: Allow free markets to work. There is an example of free markets and I might have even heard it on CNN today of the example of somebody that was going to charged $100,000 for surgery and they went to Singapore and got it for $25,000 and the main reason they gave why they could afford to do it was that they didn’t have horrendous malpractice payments to make and there was a market. There was a market necessity. Patients are leaving this country. They’re going to India, but that’s the market working. So we have put our charity hospitals out of business, at the same time, because of inflation and management and all the mischief of government, we have pushed these prices up. Pumping money into a system doesn’t improve quality. It increases prices. Look at our educational system. We pump it with money, prices go up. The quality of education goes up and the quality of medicine has not gone up by just pumping more money in.

Larry King: Lyndon Johnson once said, “The probable answer is that the government is going to have to be half-capitalistic and half-socialistic. You have to have some social security, i.e. socialism. You have to take care of those who don’t have. Pure capitalism can’t work.” Would you agree with that?

Ron Paul: No, not really. It’s sort of like I practice OB-GYN and I never could tell my patients they have a touch of pregnancy and you know, you’re either pregnant or you’re not. You either have government intervention messing up the markets or you don’t. You either believe in freedom and believe in voluntary choices. I mean, just look at this disaster with the swine flu vaccine. They take over the whole project. We pump in billions of dollars and they come up with shortages. Distribution is lousy and they’re talking about forcing people to take them in places like New York and no one has even proved that it’s necessary yet. We have still a lot of deaths from ordinary flu far surpassing swine flu, so managed central economic planning in anything fails and especially in medicine it fails.

Larry King: But Congressman, everyone in line getting it, who is getting it free is not standing there complaining about government involvement.

Ron Paul: Yeah, but I have a daughter that practices medicine and I was just talking to her about it and she says, “Oh, yeah, dad. I can give shots and it’s for free, but we don’t have anything.” So when something is free and you don’t have it, it’s irrelevant and some of the people who don’t want it are being forced to take it. We have lost our faith and confidence and understanding of how free markets work. We turned it upside down by saying anytime corporations get benefits, we call it capitalism and freedom and it is corporatism. It’s the military-industrial complex. It’s all the special interests and this is where Michael Moore gets it all wrong. He works, he believes diligently in free markets because he believes in the First Amendment, he believes in making films. He doesn’t believe in prior restraints, so why should he condemn capitalism?

Larry King: Right.

Ron Paul: Because he is condemning corporatism. I condemn it, too. Special privileges to corporation is a big problem.

Larry King: Maybe it’s semantics. More with Congressman Paul right after the break. Don’t go away.

Michael Moore: I think capitalism as it is defined now has completely failed. Yeah, it hasn’t really failed the rich. It has actually helped them, the wealthiest one percent now have more financial wealth than the bottom 95 percent combined, so it’s a really good system for a few people.

Larry King: Hi, Ron, do you disagree with that statistic that Michael Moore just pointed out?

Ron Paul: No, and I’m not complaining about as much as he does, but I think I understand it differently because when a country embarks on deficit financing and inflationism, you wipe out the middle class and wealth is transferred from the middle class and the poor to the rich and when we get into trouble, then the corporations come for their bailout and they get the benefits and the little people don’t.

So yes, there is some truth to that, but it’s the failure of the free market to exist, that is our problem. It isn’t the fact that we don’t have enough government, we have way too much government. The government created this monster. If he doesn’t like what we have, he has to look at what we’ve been doing for 30 or 40 years, it’s called interventionism. It’s called Keynesism. It’s called inflationism. It’s called Big Government. That’s the problem.

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Why are you asking me? Why not listen to what Ron Paul has been saying for the past 30 years? To sum it up, he would propose that corporations be stripped of special privileges, that individuals have equality before the law, that competition be allowed in money, and that the rule of law be upheld. But don't take it from me. Really, go listen to what he says. You might find that Ron Paul isn't your typical full-of-**** politician.

 

If you believe that laws that allow someone to walk away from your house if underwater for hundreds of thousands of dollars and the lender can only seize the asset and hurt your credit score are efficient than you truly are an idiot.

 

People are mostly ignorant on every issue.

 

Of course the lender was aware but what are they to do?
Not do business in the state of California???

Great business strategy....stick to reading law books and being the internet champion and leave real creation of commerce to the big boys. We'll create the overflow that you can b**** about.

 

This attitude is also precisely why businesses are leaving places in droves to more commerce friendly locations.

Too many SamFisheresque lawyers imposing their will on the people that are actually trying to create something and add value to society as compared to those that simply want to leech off of it.

 

Which "commerce friendly locations" are these mortgage lenders moving to? 18th Century England? Is your solution to reintroduce the debtor's prison?

While we're at it, maybe we can bring back child labor, no workplace safety, and poor houses. What the USA is really missing right now is the whole industrial revolution, Dickensian "Tiny Tim/Oliver Twist" vibe to the country, amiright?

 

Yeah....that is exactly what I was saying.

View the population shifts in this country in the last few years and its obvious where people and businesses are going. Hint: Its not the places with significant regulation of business and life!

 

If this has any relevance at all to the discussion, why were all the mortgages that are troubled written in places that you think are evil dens of inequity that businesses are supposedly rushing away from?

 

The premise of this thread is solid that many Republicans are trying to re-write history on events leading to this recession and the subsequent financial crisis and failure of self-preservation of many institutions.

But lets not take one correct premise and paint a broad stroke that all the people recieving loans or funding are acting in a proper manner. Governmental blame for crisis is significant as well on both sides of the isle.

A natural recession occured, but the leverage was so extreme that is magnified the impact beyond what the system could sustain without governmental intervention.

Lets also not forget that some of the worst practitioners and greatest losers in this mess were Fannie/Freddie whose $6 trillion in assets and hundreds of billions in losses were leveraged (Freddie) more than Lehman and Bear (around 60x).

This mess has its roots in the leveraged bond trading ideology (leveraged fixed assets can create equity type returns using bond-type risk) developed in the 1980's at Salomon Bros. and as evidenced by the failure of LTCM and the silly belief that housing prices are stable when history has shown us completely the opposite.

I, for one, question the ability for banks (prop trading) to make the kind of returns without leverage and once Basel policies are implemented. Therefore i'm still underweight financials in my investment portfolio.

The other failed belief is that governmental/soverign debt is in any way a great long-term investment. Republicans/Democrats etc. all follow the path of politics in which a bureacracy eventually inflates their way out of debt and pass the buck to the next generation. The system in itself is flawed, thereby my belief of limited governmental control of varying areas as it is usually reactionary and perpectuates and compounds a problem instead of making it better.