Bob Herbert had it right in the Saturday NY Times. Pay no attention to the Republicans, but the Obama administration is much too cavalier about the catastrophe of unemployment. Mass numbers of people are about to run out of unemployment insurance payments and the administration counsels patience.

Republican activists are capitalizing on the fear and desperation of people to rouse the rabble--who are too emotional to recognize that it was Republicans who put them into these desperate straits to begin with. The anti-dote is more working the rabble on the part of the administration. They must be out front with explanations of what they are doing, what they are thinking, and mileposts for progress towards success. I understand that they are busy, but the Republicans will use any opportunity to assault them and impede their efforts.

Good. I've been waiting - helplessly - for the Obama administration to speak OUT on the causes of this mess we're in and that it's NOT going to be fixed in four months.

They have been way too obliging in letting the Republican opposition get away with their talking points.

That's so true and with a giant boost assist by the Corporate Media who are now declaring that Obama 'owns' the economy. Yes, the Corporate Media has now decided for us that Obama owns the economy ...

Obama can only blame this mess on his predecessors to a point. Every president inherits problems of his predecessor; however, Obama makes a point to blame Bush at every turn.

Bush is not the sole cause of the economic crisis. Nor are Republicans. Democrats in the House and Senate stood idly by, or in the cases of Frank and Dodd, encouraged the easing of government mortgage lending rules, opening up Fannie and Freddie to all sorts of problems.

What Obama owns totally - 100% - is his dealing with the crisis. So far, EPIC FAIL. Bailing out GM, which was "too big to fail" - and then did fail - is all Obama. His stimulus, which hasn't done anything - is all his.

He promised to "add or save" 600,000 jobs by the end of the summer. Good luck with that.

He promised no new taxes - none of any kind - on anyone making less that 250k/year. We'll see if he can hold that one.

At least Al Sr is funny.

But, Junior, why not speak about the wonders performed by a Republican Governor? Large banks are currently withholding payment on welfare checks issued to Californians. Speak to that and the idiocy of having draconian percentages placed on passing any change in their tax laws? But, at least Prop 13 stopped the filling of books in that LA library which was "saved" by Shrub's intercept programs, eh? So many needless books might have been wasted by Al-Quada.

Rather, the problem is that their alternative -- stop trying to stimulate the economy, stop trying to reform health care, start cutting taxes, and start freezing spending -- is demonstrably ridiculous.

Not 'ridiculous' -- try 'popular', 'pernicious', and 'the grounds for the biggest mid-term election blowout since 1974', so long as The Man on the Clapham Omnibus can't distinguish between a current-account deficit and the national debt, between the top marginal income tax rate, and the income tax rate generally, between a regressive tax and a progressive tax, and between kitchen-table microeconomics and nation-sized macro.

Never bet against ignorance, tradition, and the seductive allure of a facile but bogus analogy.

Obama's watching the polls. It's w-a-a-a-y past time for him to push back on the tripe the republicans have been spewing.

Steve, as an aside, that photo of the large cat above this thread - Is that your version of Kevin's Friday Cat Blogs?

or c) listening to insane Republican ideas that don't make any sense.

It has to be (c), because bipartisanship requires allowing Republicans to dumb-down any bill before voting against it.

i dont think anybody has a bleedin' clue what will happen next. obama has been able to create the perception of pulling away from some brink or other...

but the goddam jobs are evaporating still, the economic collapse is collapsing globally, and the forces that want to hold on to what they got aint gonna enable the change necessary to turn this thing around any time soon. that's the objective view.

essentially, the poor, underserved, and marginalized will continue to be shoveled into the flaming mouth of moloch by the rich and powerful, until that hideous god relents and calms down...

oh, did i say Moloch? sorry, i meant the god Market...

So funny...How about his policies living up to his own projections? Is that relevant?

a) Targeted
b) Timely
c) Temporary
d) None of the above

When the stimulus was being sold, the distinct impression given by Romer, Summers etc was that the economy would be pumping out jobs forthwith. And that the stimulus by itself would keep unemployment rate at around 8%, and if their were no stimulus would rise to 9% or more.

It's on record.

Not allowed a seat at the table, the Republicans presented an alternative plan which they claimed would produce many more jobs far sooner, and only with half the recovery-choking debt incurred.

So far, we don't have the jobs, we do have the huge debt.

Dems made the bed. Voters sleep in the bed.

Bizblogger:

Stock Market Analysis: Bush vs. Obama Stimulus Plans

Now that 6 months have passed since Obama's "stimulus plan" has passed, I thought it useful to examine the stock market reaction to Obama's plan and compare it to the reaction of President Bush's 2003 stimulus plan.

Bush's plan passed in April 2003 while Obama's passed in February 2009. I chose the S&P 500 Index starting point one month prior to passage because the market typically discounts the information beforehand as the bills work their way through Congress. I chose 6 months-post passage as the ending point because that's all the data we have for Obama's plan so far.

Bush: From March 2003 to October 2003, the S&P 500 went from 835 to 1034 or +23.8%.

Obama: From January 2009 through July 2009, the S&P went from 932 to 879 or -5.2%.

By way of comparison, I also reviewed the market returns a full year prior to these time periods and the results show a very similar situation.

The S&P 500 return under Bush 1-year prior was -26.2%, hurt by the internet bubble collapse, 9/11 and corporate scandals. Trillions of dollars in lost wealth.

The S&P 500 return under Obama 1-year prior was -35.9%, hurt by the housing bubble collapse. Also trillions of dollars in lost wealth.

"Bob Herbert had it right in the Saturday NY Times. Pay no attention to the Republicans, but the Obama administration is much too cavalier about the catastrophe of unemployment. Mass numbers of people are about to run out of unemployment insurance payments and the administration counsels patience."

It appears that the Obama administration doesn't give a shit about "Main St." except for the political "optics" as the wannabes like to say. Obama should have fired Geithner when the tax dodge stuff came out and it also appears as if Obama is bought and paid for tool of Wall St./Goldman Sachs.

Benen is tone deaf as usual.

This report on bipartisan legislation to audit the Fed is heartening;

http://www.youtube.com/watch?v=zpbW64vRrMc&eurl=http%3A%2F%2Ftherealnews%2Ecom%2Ft%2Findex%2Ephp%3Foption%3Dcom%5Fcontent%26task%3Dview%26id%3D31%26Itemid%3D74%26jumival%3D3994%26updaterx%3D2009%2D07%2D10%2B12%253A27%253A24&feature=player_embedded

But, Junior, why not speak about the wonders performed by a Republican Governor?

Because the topic was the economy under Obama. But if you want to discuss Arnold: The Governator has his hands full with a liberal legislative branch that won't cut spending without a huge fight.

When will libs learn: in an economic downturn, raising government spending and raising tax rates don't work. Decrease government spending and decrease taxes and you will see an uptick in the economy, and eventually, the tax receipts as well.

A Democrat? With an Op-Ed in the Washington Post? But...that's unpossible!

Isn't that taking up room that could be spent on another stellar John Bolton column asking why we haven't glassed Iran yet?

One rarely gets a clean experiment in social science, but we seem to have one hear. The Republican solution to all problems, including recessions/depressions is tax cuts, and that part of the stimulus programs has already taken effect. The R's don't seem to think it has worked, although they seem unaware of the irony of their complaints.

The action that the R's always oppose, stimulative spending is about to kick in. Let's see how that goes.

Of course, facts to have a liberal bias and will undoubtedly be ignored

Congressional Republicans want Americans to believe the economic catastrophe that President Obama inherited -- caused, in large part, by Republican economic policies -- should be resolved by now.

but what credibility does the GOP have?

FLASHBACK to 1-year ago..

"You've heard of mental depression; this is a mental recession."

"We have sort of become a nation of whiners."

- Republican Phil Gramm, economic advisor to the McCain campaign 7/10/08

so...

how'd that turn out?

"Bush is not the sole cause of the economic crisis. Nor are Republicans. Democrats in the House and Senate stood idly by, or in the cases of Frank and Dodd, encouraged the easing of government mortgage lending rules, opening up Fannie and Freddie to all sorts of problems."

Not only that, Bush proposed to Congress the estabishment of a Treasury sub-agency specifically focused on market oversight and management of risk. Announced it on 9/11/03 to underscore the critical importance of the issue. Killed by the same folks riding that housing/vote gravy train.

That kinda oversight coulda come in pretty handy, dontcha think?

Not allowed a seat at the table

Nice revisionism. The Republicans were offered a seat; they chose to not accept it. Just as they are doing on health care, "no" is the only option they offer.

the Republicans presented an alternative plan which they claimed would produce many more jobs far sooner, and only with half the recovery-choking debt incurred.

And you believed this, why, exactly? The Republican plan was bullshit from the very beginning, with numbers that didn't even remotely come close to adding up and, in some cases, didn't even make sense, much less match reality.

As to your final statement, where we are in the economic cycle, "recovery-choking debt" is simply not an issue, which is why you don't even try to defend that silly statement.

Not only that, Bush proposed to Congress the estabishment of a Treasury sub-agency specifically focused on market oversight and management of risk. Announced it on 9/11/03 to underscore the critical importance of the issue. Killed by the same folks riding that housing/vote gravy train.

You do realize you're agreeing with a troll, don't you? One who is noted for posting false information that only a wingnut would believe. Pretty much tells us what you are, though, so it's all good.

As for the point you think you're making, you are, once again, flatly incorrect. The proposal that you cite affected only Fannie Mae and Freddie Mac, whose role in the ongoing economic crisis is minimal. And its death was a bipartisan effort, just as was the 2005 effort killed by the Bush administration with the enthusiastic support of Alan Greenspan.

We already saw what happened to the country under George Bush's so-called Ownership Society.

Republicans are simply doing nothing more than political grandstanding at this point.

It's nothing more than their pursuit of a pathologically empty ideological agenda.

In terms of origins of our economic crash, what Bush and Reagan damaged in 16 years
President Obama certainly cannot fix in 6 months.

Republicans would leave the poorest of citizens and the disabled on the street. Recall in George Bush's 2005 budget there was a proposal to stop financing the construction of housing for the physically handicapped and mentally ill--a program that had been in effect for thirty years.
Simply obscene.

This is the kind of thinking of these empty suit, anti-governing catastrophic Republicans.

Now that 6 months have passed since Obama's "stimulus plan" has passed, I thought it useful to examine the stock market reaction to Obama's plan and compare it to the reaction of President Bush's 2003 stimulus plan.

Why on earth would such an exercise be "useful?" You're not even comparing apples to oranges -- you're comparing apples to screwdrivers -- there simply is no useful comparison to be made.

Bush's plan passed in April 2003 while Obama's passed in February 2009. I chose the S&P 500 Index starting point one month prior to passage because the market typically discounts the information beforehand as the bills work their way through Congress.

And this is even sillier. Using the market as a referendum tells you not one damn bit of useful information. The only person who would find this exercise useful is a partisan moron. This isn't even worth the trouble to debunk, since it's self-evidently stupid.

Hey, Bush may have driven the car off the cliff, but now that Obama's in the driver's seat, he should be able to avoid the impending impact, right? And if not, I guess that means he's a bad driver.

[Sidebar: the estimated cost of Bush's war of choice in Iraq is upwards of $680 billion, and climbing. Seems like that money could have been better spent elsewhere.]

Now that 6 months have passed since Obama's
"stimulus plan" has passed, I thought it useful
to examine the stock market reaction to Obama's
plan and compare it to the reaction of President
Bush's 2003 stimulus plan.

What a silly comparison. THe Bush stimulus plan you're using passed in April 2003 - almost a year and a half after a recession had ENDED. The February 2009 was passed as the entire economy was still sinking rapidly.

Sucks to be Obama right now, will suck worse next year come the mid-term elections.

Bush/Obama is obviously not a perfect comparison, I knew that when I posted it. What is relevant about a comparison is that Bush took steps in the face of a crisis that inspired confidence in the markets and with consumer, and led to recovery.

Obama not so much.

(As to the 01-01 recession, per Wikipedia:

In the final three quarters of 2003, the market finally rebounded permanently, agreeing with the unemployment statistics that a recession defined in this way would have lasted from 2001 through 2003.)

Enjoy your recession.

Uh, Matt, taking steps that are all in the wrong direction and lead directly toward a cliff doesn't qualify as leadership, even if a lot of lemmings thought it was a good idea at the time to follow.

27 years ago, when Reagan was presiding over a bad recession, he was able to invoke the slogan "stay the course" to persuade the public to keep the Republicans in power, and it worked. Congressmen and Senators up for reelection persuaded the public to "let Reagan be Reagan" and give his policies a chance to work, and sure enough, two years later, the economy was in recovery. How much credit Reagan deserves for that is still debated, but the point is that if American voters fall for the line that "we didn't get instant gratification, let's throw the Democrats out," it will be proof that the stupidification and short-term-memory loss of this country have progressed alarmingly.

PaulB:

"The proposal that you cite affected only Fannie Mae and Freddie Mac, whose role in the ongoing economic crisis is minimal."

You've got to be shitting me.

The ongoing economic crisis was a direct result of the US mortgage meltdown, at the center of which was Freddie Mac and Fannie Mae, owners of half or more of the mortgages in the US.

NYT:

"Dozens of interviews, most from people who requested anonymity to avoid legal repercussions, offer an inside account of the critical juncture when Fannie Mae’s new chief executive, under pressure from Wall Street firms, Congress and company shareholders, took additional risks that pushed his company, and, in turn, a large part of the nation’s financial health, to the brink.

Between 2005 and 2008, Fannie purchased or guaranteed at least $270 billion in loans to risky borrowers — more than three times as much as in all its earlier years combined, according to company filings and industry data.

“We didn’t really know what we were buying,” said Marc Gott, a former director in Fannie’s loan servicing department. “This system was designed for plain vanilla loans, and we were trying to push chocolate sundaes through the gears.”

...

Fannie never actually made loans. It was essentially a mortgage insurance company, buying mortgages, keeping some but reselling most to investors and, for a fee, promising to pay off a loan if the borrower defaulted. The only real danger was that the company might guarantee questionable mortgages and lose out when large numbers of borrowers walked away from their obligations.

So Fannie constructed a vast network of computer programs and mathematical formulas that analyzed its millions of daily transactions and ranked borrowers according to their risk.

Those computer programs seemingly turned Fannie into a divining rod, capable of separating pools of similar-seeming borrowers into safe and risky bets. The riskier the loan, the more Fannie charged to handle it. In theory, those high fees would offset any losses.

With that self-assurance, the company announced in 2000 that it would buy $2 trillion in loans from low-income, minority and risky borrowers by 2010.

And yes, vocal democrats like Barney Frank weren't the only ones to oppose the Bush oversight plan, some Republicans did too.

My point is, the geniuses like Barney Frank are the "architects" now in charge of the current attempt to stimulate a recovery by throwing the entire Democratic wish list of the last few decades at it, saddling Uncle Sam with a staggering debt load to finance it. No one in Congress even had time to read the damn bill.

Of course Obama's recovery stimulus plan wasn't designed to have the economy bounce back overnight, that's impossible, how could it? While the economic downturn may only have recently reached a head it's been building for years. But, perhaps there are more places people can turn for comfort, other than the heeding the presidents advice, voting for new stimulus packages or taking on the Republican cause. What about religion? I know the separation of church and state is a largely accepted American value, but in times like this- when politicians are getting harder and harder to trust- religion and faith might be a persons best bet. http://www.newsy.com/videos/the_ethics_of_economic_survival

How many people are forgetting the "counterfactual conditionals" (like, what would things be like if Obama hadn't even tried to stimulate, what if McCain/Palin had won, etc.)

Another phony irrelevant pro&con dichotomy. The administration ignores the results of perverting economic policy to reanimate the undead vampire banks because the GOP is fine with that too.

Larry Kudlow at NRO:

"Here’s the clincher: Year-to-date, Dow Jones stocks are off 7 percent, while China stocks are up 71 percent. The world index is up 4 percent. Emerging markets are up 25 percent. They’re all beating us. None of this is good.

We’re going the wrong way. That’s why stock markets are not voting for the United States anymore."

Read the whole thing.

http://corner.nationalreview.com/post/?q=YjIwZmQ2MjRjM2IxMWJkZGQwZWVhMDNkZjZkNWUwMmY=

We already saw what happened to the country under George Bush's so-called Ownership Society.

Republicans are simply doing nothing more than political grandstanding at this point.

It's nothing more than their pursuit of a pathologically empty ideological agenda.

In terms of origins of our economic crash, what Bush and Reagan damaged in 16 years
President Obama certainly cannot fix in 6 months.

Republicans would leave the poorest of citizens and the disabled on the street. Recall in George Bush's 2005 budget there was a proposal to stop financing the construction of housing for the physically handicapped and mentally ill--a program that had been in effect for thirty years.
Simply obscene.

This is the kind of thinking of these empty suit, anti-governing catastrophic Republicans.

Trying to point out that the Republicans are to blame is a fools errand. It won't make any real difference. Rather than blame Republicans, he needs to seem more active in helping people. Even if that help doesn't actually help end the economic difficulties, he needs to make it easier for them to survive the hardships without ruining their relationships/reputations/lifestyles. Right now, he only appears to care about bankers and stock traders.

Does anyone here really believe that 'It's all GWB's fault!' is going to save Obama in 2012? The Democrats need to get busy in looking busy. Try being something more than the lesser of two evils for once.

I just logged on and here my post from earlier today is posted once more!
Ghosts in the machine.

I personally am still traumatized by the Bush/Cheney years. Still troubled.
Voting system failures. Supreme Court appointing Bush in 2000. Repeated false information. Widespread detainee abuse. Katrina. Alito. Roberts.
And what were Bush's so-called economic accomplishments in his second term? All I recall is he further hurt citizens with new laws that curbed class action suits, and his republican run senate passed legislation making it much harder for ordinary citizens to file bankrupcy.
Two enormous gifts to corporations.
Oh, and did i mention what happened with Wall Street, AIG and that ilk on his watch which we saw in the fall of 2008...that wretched memory of Secretary Goldman Sacs Paulson and George W.Bush at the microphones making a grab of billions from the treasury.
Obama inherited all of the mess.
I do wish he would listen more to economist Paul Krugman.

You've got to be shitting me.

Nope, just telling you the truth.

The ongoing economic crisis was a direct result of the US mortgage meltdown, at the center of which was Freddie Mac and Fannie Mae, owners of half or more of the mortgages in the US.

And, again, nope. Fannie and Freddie came late to the party, after it was well underway, and were not even remotely the reason that the whole shebang fell apart, which is why you don't hear much about them anymore. And none of what you posted contradicts that basic fact.

Did Fannie and Freddie get caught up in the mess? Of course they did, just as damn near everyone else did, but the mess would have happened regardless of what Fannie and Freddie did. They were only a small player in the whole mess that *really* caused the problems: the unregulated CDOs and the like, the "big shitpile" that was built up on top of those mortgages.

You really should learn to get your information from more than one source. It would help you look not quite so ignorant.

Larry Kudlow at NRO:

You're actually using Larry Kudlow as a source??!! Omigod.... I don't even have to go read the article because the snippet you posted is so self-evidently stupid it doesn't even need contradicting.

And yes, vocal democrats like Barney Frank weren't the only ones to oppose the Bush oversight plan, some Republicans did too.

And the Bush administration itself opposed a more realistic oversight plan a couple of years after that. Did you have a point? The 2003 plan wouldn't have done a damn thing to stop the meltdown because it was aimed at the wrong thing.

My point is, the geniuses like Barney Frank are the "architects" now in charge of the current attempt to stimulate a recovery by throwing the entire Democratic wish list of the last few decades at it, saddling Uncle Sam with a staggering debt load to finance it. No one in Congress even had time to read the damn bill.

ROFLMAO.... Man, you really have drunk the Kool-Aid, haven't you? Dude, we already have a "staggering debt load," thanks to the Bush administration, which doubled the national debt, at a time when we should have been saving and paying it down. Now, thanks to Bush, we have no choice but to add to the debt if we want to mitigate this recession that the Bush administration threw us into.

Funny how I didn't see you on here complaining about that doubling of the debt over the past eight years. I guess I just missed those posts.

Oh, by the way, Matt, do tell me which elements in the stimulus package should not have been added, won't you? You, after all, have had plenty of time to read the bill by now and you should be able to easily identify hundreds of billions of dollars of wasteful spending that you think doesn't belong there, right?

Bush/Obama is obviously not a perfect comparison

No shit, Sherlock. Try "no comparison at all," if you really want to be accurate.

What is relevant about a comparison is that Bush took steps in the face of a crisis that inspired confidence in the markets and with consumer, and led to recovery.

ROFL... Man, you really *are* ignorant, aren't you? The 2001 recession was mild, by any standard you care to name, and was over in a matter of months. No government intervention was required. What the Bush administration did was the most expensive and the least effective "economic stimulus" package ever passed, on a bang-for-the-buck basis. Not only did it lead to the doubling of our national debt, it robbed us of the resources needed to deal with the current emergency.

In the final three quarters of 2003, the market finally rebounded permanently, agreeing with the unemployment statistics that a recession defined in this way would have lasted from 2001 through 2003.)

First of all, quoting Wikipedia on an economic issue is rather foolish, since they are not known for their detailed economic analysis. Secondly, note the key phrase, "a recession defined in this way." That is not way we define recessions, which is why everyone else points out that the recession ended in 2001. Nobody defines recessions on the basis of what the stock market is or is not doing because doing so would be stupid.

You still don't get it, do you? You cannot use the stock market as a metric for *anything* because it is simply too volatile and too dependent on too many other factors.

Enjoy your recession.

Bush's recession? No, I'm not enjoying it too much. Fortunately, we have someone at the helm who isn't an idiot and who actually does know something of economic theory, preventing this recession from being far worse than it currently is. Enjoy your Kool-Aid.

Actually, I'm rather more curious, Teacher, about that bit about Fannie Mae and Freddie Mac having had a "minimal" influence on our current state of fuckedupness. Could you please elaborate?

And Teacher, wasn't it Martin Luther King who said something like 'I look forward to the day when the Content of a man's statement is more important than what his name is'?

Accordingly, Teacher, would you respond to the content of what Mr. Kudlow said, and not so much about what you think he represents for your kind?

Thank you, Teacher.

Actually, I'm rather more curious, Teacher, about that bit about Fannie Mae and Freddie Mac having had a "minimal" influence on our current state of fuckedupness. Could you please elaborate?

What's to elaborate on, idiot? You already have sufficient information above should you actually choose to read it. And, lord knows, there is more than enough information online. The foreclosure crisis, by itself, was insufficient to have brought down the economy. The real problem is the house of cards that was built on top of those home loans, where each home loan dollar was leveraged by as much as 30 or 40 to 1 by those other, wholly unregulated and unsupervised, financial instruments. It was those that came damn near to bringing everything down, not Fannie or Freddie.

And Teacher, wasn't it Martin Luther King who said something like 'I look forward to the day when the Content of a man's statement is more important than what his name is'?

Moron, when you quote a man with an international reputation of financial illiteracy, someone who, in years of writing blog posts, columns, and editorials, has shown himself to be not only wrong, but stupidly wrong, time and time again (e.g., by still pretending that there was nothing wrong with the economy at a time when damn near everyone else was foreseeing the impending crash), what do you expect me to say?

Accordingly, Teacher, would you respond to the content of what Mr. Kudlow said, and not so much about what you think he represents for your kind?

I already did. Anyone who writes the snippets you posted has demonstrated quite clearly that he has no business in the field of financial analysis. The stock market as a measure of financial well-being is a fatally flawed metric which is why no sane economist uses it that way.

Moreover, even if you assume that Kudlow is entirely correct in using that metric, it still doesn't prove a damn thing other than that the recession is ongoing, which merits a big "duh!" It doesn't say a damn thing about whether Obama's policies are correct or not, nor does it say anything about the cause of the recession nor its cure. And when he trots out the often-debunked stupidity that our corporate tax rate is higher than that of most of Europe, well, forgive me if I don't take his stupidity any more seriously than I do yours.

Thank you, Teacher.

What's interesting is that you are absolutely determined to remain ignorant, so nothing I write here will have any effect on you. Still, debunking such stupidity is a hell of a lot of fun, so it's all good. I can't wait to see what you'll come up with next.

By the way, if you want to read an assortment of Kudlow howlers, be sure to Google Larry Kudlow stupidest man alive. You'll find a rich assortment of posts that show that Kudlow has, at best, a minimal understanding of finance, economics, and math.

By the way, even if you ignore the CDOs and other financial instruments that brought down so many financial institutions, you *still* cannot blame Fannie and Freddie for the current problems, as this article shows. Key grafs:

Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006.

Federal Reserve Board data show that:

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

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

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

But, Teacher, weren't those private lenders encouraged to continue their ever-bolder lending practices by the fact they knew that GSEs generally wouldn't say no, and would buy their increasingly-risky paper and get it off their books?

And then, wouldn't the GSEs re-sell the mortgages in bundles to Wall St. firms, which then would slice and dice them in the most attractive ways for sale as 'guaranteed winners' to the likes of, say, the government of Iceland?

And then, Teacher, when institutions and companies all around the world held this paper, and the U.S. mortgage market went south, didn't that create non-minimal problems for all those economies with elements holding this de-valued paper?

So Teacher, to draw a dairy analogy, wasn't the global economy perceived as a huge block of solid cheese one day, and swiss cheese a short time later?

Teacher, didn't GSEs arguably play a critical role in facilitating the dangerous risk ratios that banks employed to get new mortgage business? And didn't those dangerous risk ratios spell doom for the global economy as we knew it?

In a word, no, but then you already knew that and you just want to play silly games rather than actually defend the mindless partisan drivel you've been spewing here, which is why you keep trying to change the subject as each new bit of silliness gets debunked. Do tell us again about the oh-so-awesome Republican plan to save the economy, won't you? We can all use a good laugh.

I'm still waiting for you to tell me which elements in the stimulus package should not have been added, by the way. You, after all, have had plenty of time to read the bill by now and you should be able to easily identify hundreds of billions of dollars of wasteful spending that you think doesn't belong there, right?

Teacher, I must say, you display a keen sense of when to hold 'em, and when to fold 'em.

ROFL.... Dear heart, when I'm dealing with a demonstrably ignorant, partisan idiot, what do you expect? I will simply note that you continue to avoid actually defending the drivel you've been spewing, and have yet to post anything that contradicts what I've been writing. Do try harder next time, won't you? I hate to win this easily.

And do tell us again about the oh-so-awesome Republican plan to save the economy, won't you? We can all use a good laugh.

I'm still waiting for you to tell me which elements in the stimulus package should not have been added, by the way. You, after all, have had plenty of time to read the bill by now and you should be able to easily identify hundreds of billions of dollars of wasteful spending that you think doesn't belong there, right?

By the way, dear, have you figured out yet that it's basic economics that the federal government needs to spend money during a recession and that such spending is by far the most effective stimulus?

It's not a totally unreasonable critique. The 1992 and 2001 recessions lasted 8 months each. This recession is so much worse but compared to the recessions that many people remember (I mean, say you were 10 in the early Regan recession, you'd be nearly 38 now so...).

Sorry, Teacher, I've had my milk and cookies and I'm in my jammies toddling off to bed, can hardly keep my eyes open. Can I ask one last question about something you said?

"Did Fannie and Freddie get caught up in the mess? Of course they did, just as damn near everyone else did, but the mess would have happened regardless of what Fannie and Freddie did. They were only a small player in the whole mess that *really* caused the problems: the unregulated CDOs and the like, the "big shitpile" that was built up on top of those mortgages."

Would that "shitpile" of CDOs etc have gone bad by themselves if the mortgages they were "on top of" hadn't first?

ROFL... You still can't bring yourself to acknowledge the simple, incontrovertible fact that the current crisis has little to do with Fannie and Freddie and that it would have occurred even if Fannie and Freddie had been appropriately regulated, can you?

You're so desperate to pin this on Democrats like Frank and Dodd that you have to cling to your illusions, despite the complete lack of evidence for those illusions. And you have to insist that the Bush administration would have done something about this had they not been blocked by those evil Democrats despite the overwhelming evidence of the past eight years, including the many times that the Bush administration and the SEC acted to block regulation and investigation.

It's rare to find someone so absolutely determined to hang on to their illusions. Thanks for being such a good example of a partisan drone.

Would that "shitpile" of CDOs etc have gone bad by themselves if the mortgages they were "on top of" hadn't first?

Yup, because they were built on thin air. It was a classic bubble that would have eventually burst, one way or another. Just can't handle the truth, can you? Sooner or later, someone would have questioned the value of those so-called AAA financial instruments and, once that happened, the whole shitpile would have come tumbling down.

Had we just had the bad mortgages, we would still have had a financial problem but it would have been no more severe than the S&L crisis of the 1980s, expensive but manageable. Quite a few banks would have been taken over, the government would have been out a few hundred billion dollars, there would have been some downward pressure on real estate prices and the economy, and that would have been the end of it, just as was the case in the 80s. What turned this into a financial meltdown was the big shitpile.

Still waiting, dear. Do tell us again about the oh-so-awesome Republican plan to save the economy, won't you? We can all use a good laugh.

I'm still waiting for you to tell me which elements in the stimulus package should not have been added, by the way. You, after all, have had plenty of time to read the bill by now and you should be able to easily identify hundreds of billions of dollars of wasteful spending that you think doesn't belong there, right?

I would think that the Republicans would be a bit more hesitant to introduce the argument that the mess should be cleaned up in 4 months. Their argument will come back to kick them in the rear when they try to insinuate a trigger into the health care reform. The Democrats can then justifiably argue for a 30 day trigger if the private insurers don't get everybody insured for basic coverage at premiums they can afford. After all, the economic mess is a whole lot bigger than the health care mess that is only a part of the whole disaster.

"Yup, because they were built on thin air. It was a classic bubble that would have eventually burst, one way or another. Just can't handle the truth, can you? Sooner or later, someone would have questioned the value of those so-called AAA financial instruments and, once that happened, the whole shitpile would have come tumbling down.

Had we just had the bad mortgages, we would still have had a financial problem but it would have been no more severe than the S&L crisis of the 1980s, expensive but manageable. Quite a few banks would have been taken over, the government would have been out a few hundred billion dollars, there would have been some downward pressure on real estate prices and the economy, and that would have been the end of it, just as was the case in the 80s. What turned this into a financial meltdown was the big shitpile."

Thank you. Teacher.

Now you say the CDOs were built on "thin air. It was a classic bubble that would have eventually burst, one way or another." But before, you said they were built on existing mortgages. If the mortgages hadn't gone bad (due to bad risk ratios that GSEs were willing to buy) how exactly would the CDOs have gone bad?

Matt, dear, it's better to be thought a moron than to continue posting and remove all doubt. What's really hilarious is that you really do seem to think that you've got a point. Alas, you don't.

Dear heart, the various financial instruments were built on a lot of nothing. Once you've leveraged the original dollar 30-40 times, as was true of some of these financial instruments, thanks to the Bush administration's SEC relaxing the rules on investment banks, it's pretty clear that the house of cards lacks a suitable foundation. And once this becomes common knowledge, something that is inevitable, you're going to panic and sell, *regardless of what happens to those original mortgages*. That's precisely what a bubble is, dear. Do try to keep up.

Still waiting, dear. Do tell us again about the oh-so-awesome Republican plan to save the economy, won't you? We can all use a good laugh.

I'm still waiting for you to tell me which elements in the stimulus package should not have been added, by the way. You, after all, have had plenty of time to read the bill by now and you should be able to easily identify hundreds of billions of dollars of wasteful spending that you think doesn't belong there, right?

While you're at it, can you point me to those posts of yours over the past eight years where you've bemoaned the doubling of the national debt under the Bush administration? I'm not having much luck finding those but I'm sure it's just an oversight on my part.

Teacher, I'm sorry and a bit down that you think me a moron.

Then are you saying that the meltdown of the mortgages underlying the derivatives had nothing to do with the failure of the derivatives?

Gotta run, dear heart. I do so look forward to reading the answers to my questions. I'm sure it's just an oversight on your part that you haven't posted those yet.

Next time, can you actually come to the table somewhat prepared for a debate? I'm afraid this has been rather embarrassingly easy and I would much rather have a good challenge. Ah, well, at least it has been amusing, so if you want to remain ignorant, I guess I'm okay with that.

Then are you saying that the meltdown of the mortgages underlying the derivatives had nothing to do with the failure of the derivatives?

I'm seeing that the bubble would have burst either way, as bubbles always do. Do try to work on your reading comprehension, won't you?

You still don't seem to grasp the fact that a single dollar failing is just not that big a deal. A dollar leveraged 30-40 times over is. Do try to keep up.

I'm sorry, Teacher, clearly I need to hit the books much harder. And I will, I promise.

"I'm seeing that the bubble would have burst either way, as bubbles always do."

So, the derivative bubble would have burst if the underlying mortgages failed. Check.

And the derivative bubble would also have burst if the derivatives were over-leveraged. Check.

But, Teacher, in the latter case, that actually happened, what was the actual mechanism or event that precipitated the derivative bubble to burst?

Bush gave us eight years of deficit stimulus. If that didn't work, why did Obama repeat the same useless strategy?

kudlow huh...

nothing like conservative predictions..

less than a year ago...

“I think we have avoided a recession.” [White House Budget Director Jim Nussle, 7/31/08]

how'd that turn out?

What's interesting about you, dear heart, is that you cannot acknowledge the truth but you also cannot contradict it, which is why your posts continue to be mindless drivel. You bring nothing to this discussion other than your cherished illusions and you will hang onto them at any cost.

And the simple truth is that Fannie and Freddie had only a peripheral role in the meltdown, that the meltdown would have occurred even if they had been regulated, that the Bush administration actually blocked attempts to regulate the financial markets and Freddie and Fannie, that the meltdown was caused by the unregulated and over-leveraged financial instruments, and that the bubble would have popped even if there hadn't been a single foreclosure.

None of this is particularly controversial or even hard to grasp. None of this can be denied. And yet, you continue to struggle with this. Why is that?

But, Teacher, in the latter case, that actually happened, what was the actual mechanism or event that precipitated the derivative bubble to burst?

Dear heart, you still don't seem to grasp the simple fact that it doesn't matter. You cannot deny that there was a bubble and that all bubbles pop. The triggering factor for the popping is entirely irrelevant. The real estate bubble, and everything built on top of it, would have popped even if none of the loans had gone into foreclosure.

You're just so determined that Fannie and Freddie be at fault that you cannot bring yourself to acknowledge reality.

Bush gave us eight years of deficit stimulus.

No, he didn't.

If that didn't work, why did Obama repeat the same useless strategy?

Well, mostly because Obama's strategy is completely different, but thanks for playing. We have some lovely consolation prizes for you.

Still waiting, dear. Do tell us again about the oh-so-awesome Republican plan to save the economy, won't you? We can all use a good laugh.

I'm also still waiting for you to tell me which elements in the stimulus package should not have been added, by the way. You, after all, have had plenty of time to read the bill by now and you should be able to easily identify hundreds of billions of dollars of wasteful spending that you think doesn't belong there, right?

While you're at it, can you point me to those posts of yours over the past eight years where you've bemoaned the doubling of the national debt under the Bush administration? I'm not having much luck finding those but I'm sure it's just an oversight on my part.

While you're at it, dear, do please tell us how Barney Frank managed to block Bush's proposal from his position in the minority party. I'm sure the tale of how he managed to bamboozle the Republican leadership will prove to be a fascinating one.

There was actually one serious attempt to pass reform legislation during the Bush administration, pushed by Republican Congressman Mike Oxley. It was killed by three factors: lack of support from the Republican Senate leadership, active pushback from the Bush administration, and active pushback from Alan Greenspan.

Barnard College Professor Perry Mehrling:

It is certainly true that problems in subprime started to create some anxiety as to whether or not these assets were really AAA or not. But I don't think that this can be sustained, the notion that this was just a housing bubble that collapsed. Because if it was, we'd be done already. As many people said at the beginning of the crash, "oh [the problem is] just subprime, there's only, say, $400 billion of that stuff out there, it is not big enough to undermine the entire financial system." The fact that crisis continues shows that it isn't just a crisis of subprime, but a crisis of the whole securitization structure, that everything came into question.

The way this played out is the following. Once there is any concern about the value of the collateral you are putting up in an overnight borrowing situation, the first thing the lender does is to alter the deal, to say "Ok, we'll continue to lend. But just to be on the safe side, instead of giving you 99 cents on the dollar we'll give you 95 cents on the dollar." That immediately creates a problem for the shadow bank that is borrowing. Where are they going to get that other 4%? The way that plays out is that there is a downward spiral of the collateral because no one knew what these assets were really worth, so they looked to where these assets were traded. Where can we find a market price? And there was no market price.

Is any of this sinking in yet? Have you started to recognize that you were flatly incorrect in damn near everything you've asserted in this thread? No? Yeah, I thought not.