David : I'll gladly concede your point about Fannie & Freddie, viz, that they ought to be dismantled. Not sure how soon this can be done ; they hold a really large number of mortgages and simply gutting them, "damn the torpedoes," and you re-implode the housing market. At least this is my impression. But, yeah, both are due for termination, even if it would be prudent to dismantle them piecemeal. As for derivatives, looks like we are reading different people. The narrative I am familiar with says that Wall Street was the principle culprit. That all kinds of derivatives were cooked up by finance capital types and, once the ball got rolling, away they went, crazy scheme upon crazy scheme, until 2007 began the process of un-raveling. Things hit the fan, big time, in late 2008, of course, but economists look to 2007 for the real start to the meltdown. For most of the next year almost everyone was in denial. By August / September it was getting hard to continue that course, and then in October almost no-one could deny anything any more. In any case, my take is that, bad as F & F were / are, the worst culprits were / are Wall Street finance people. This is directed at finance people, NOT average stock brokers, not business owners, not general bankers, etc, essentially just at finance big shots. I mean, they act like they own the whole market. Speaking of a sense of entitlement they seem to believe that they have some kind of "right" to billions. As for Fannie and Freddie, what did they have to do with the end of limitations on leverage ? Hell, the finance boys ( some gals, but mostly boys ) threw all caution to the winds and the old days of 10 : 1 margins were ancient history as leverage sometimes soared to 50 : 1 or worse in some cases. These were the same people who were using their influence to dismantle what regulations existed to keep that kind of speculation in check. This crap really took off in the Clinton years but "W" did his bit, which was approximately as bad, maybe even worse. This can be debated but who "wins" the debate doesn't matter since we got a double-barreled screwing when all was said. Some economists say there was a trajectory to Wall Street's greed, starting as far back as the Go-Go years of the late 60s early 70s. Sounds about right but I am way behind on my econ reading and cannot be sure without some hard data to think about and the raw ideas of authors who are expert in these areas to mull over. I remember more-or-less some books / articles I once read about Wall Street in the JBJ - Nixon era, but this is so fuzzy in my mind that all I can claim is a set of impressions. Anyway, I have now read a few books ( three ) on the crash of 2007 - 2008 but to really understand the whole schmeer would take a minimum of maybe 7 or 8 solid texts, plus a good number of specialized articles. Also have read a decent number of articles but without reading whole books it is pretty hard to piece it all together, to have a working theory in your head that really covers all bases. Needless to say, I am averse to taking any "off the shelf" explanation at face value and prefer to arrive at my own conclusions. Generally some authors impress me far more than others, but even then I want to combine their ideas with other ideas, cut away some stuff that seems specious ( everyone makes mistakes, sometimes over-simplifies, etc ), and arrive at something at least partly new. Otherwise , why bother ? Best I can say for now. Who I have read a lot of is Philips. I think 5 of his econ books. Four of them are pre-2007 so not directly relevant to the crisis, but as excellent background and historical economics he is hard to beat. Billy ============================= 4/11/2012 8:26:36 P.M. Pacific Daylight Time, [email protected] writes:
Hmmm. _ "Free speech is meant to protect unpopular speech. Popular speech, by definition, needs no protection."—Neal Boortz On 4/11/2012 6:10 AM, [email protected]_ (mailto:[email protected]) wrote: David : Nice article, will save for my files. However, as right as much of the thrust of Lowry's, piece is, there are, in fact, de facto social Darwinist economic policy advocates in the Republican Party, like Gilder, and like the late Milton Friedman. Hence everyone who still follows Friedman's ideas today. DRB: I would prefer Hayek, but he may have something in his closet that is upsetting, too. What critics of the Ryan plan are upset about is that the blame for problems which that plan seems to assume, should fall on average citizens and not on the finance capital wealthy, viz, Wall Street speculators. DRB: I'm really curious how one could target Wall Street Speculators without creating a blatantly discriminatory law. Which, no matter the intent, sets a really bad precedent. I still do not buy the narrative that the only guilty parties are on Wall Street. Freddie Mac and Fannie Mae need to be gutted and replaced with people who know what the **** they are doing instead of being filled with the likes of Barney Frank's current homo hookup. And he was chairman of the committee in 2007-2010 who played Sergeant Schultz. "I zee noth-ink, noth-ink!!!" Who said that "love" was blind?? THIS SURELY ARGUES FOR IT. Maybe it is being in the mortgage industry, but those of us in the industry have more bile and venom for those two agencies than anyone on Wall Street. THEY insisted that the mortgages be created with no credit check, THEY created the entire "sub-prime" mortgage market from the Community Reinvestment Act, and THEY even bought and sold some of those "evil" derivatives that almost crashed the whole banking system. giving them coveted "Government Insured" status-without which these financial instruments probably could not have been sold. Where was their Congressional Oversight?? Involved with one of the executives, but no conflict of interest here, no sir. (YEAH, RIGHT.) My position is directly derivative of Kevin Philips, if you want to know. Since ca 1980 if not before, he has been more-or-less politically independent but, as you also know, at one time he was a conservative theorist of the first order. But along the way he became disillusioned with finance capital and certainly since ca 1990 has been at war with that wing of the Republican Party. This hardly means that he is pro-Democratic Party even if, here and there, he may go along with Democratic ideas. Basically he rejects the Washington Consensus, which, in practice, is a bi-partisan supply side theory of economics. My opposition to supply side thinking is near absolute. DRB: I dunno, but I think that I would take the much, much shorter Reagan recession over this one. Maybe that's just me. My contempt for finance capital economics --to a whole class of Wall Streeters-- is also near absolute. Hence my comment about "conservative" economists who "can be" worse than the Left. This, BTW, is not exactly a ringing endorsement of the Left, just a comparison, as if someone said that "if anything Communism is worse than Fascism." Clearly NEITHER alternative is worth a damn, its just that one is worse than the other. DRB: Well, a lot of those Wall Streeters, so-called "conservatives," are donating a hell of a lot of money to President Goldman Sachs. I question their classification as "conservatives." ("President Goldman Sachs" shamelessly stolen from Glenn Reynolds, Instapundit. My humble opinion Billy =============================================== 4/10/2012 10:36:15 P.M. Pacific Daylight Time, [email protected]_ (mailto:[email protected]) writes: _NATIONAL REVIEW ONLINE_ (http://www.nationalreview.com/) _www.nationalreview.com_ (http://www.nationalreview.com/) _The Social-Darwinist Smear_ (http://www.nationalreview.com/articles/295621/social-darwinist-smear-rich-lowry) By _Rich Lowry_ (http://www.nationalreview.com/author/56473) _April 10, 2012 12:00 A.M._ (http://www.nationalreview.com/articles/295621/social-darwinist-smear-rich-lowry) Social Darwinism isn’t what it used to be. President Barack Obama lambasted the Paul Ryan budget as “thinly veiled social Darwinism” in a scorching budget speech last week. The charge displayed the same care as his contention that it would be unprecedented for the Supreme Court to overturn legislation passed by Congress — in other words, another verbal temper tantrum substituting petulance for reason. Social Darwinism is the 19th-century creed that, drawing on biology, supposedly held that a laissez-faire economy should operate on the basis of “ survival of the fittest.” The strong rise, while the weak fall, unaided and deserving their pitiable fate. What are the telltale signs of social Darwinism in the Ryan budget? Total federal spending will only increase from $3.6 trillion this year to $4.8 trillion in ten years. If you can’t already hear the cries of children relegated to the poorhouse and of old people pushed out onto ice floes, you must be a 21st-century robber baron. Ryan wants to spend 19.8 percent of GDP as of 2022, a greater share of the economy than when President Bill Clinton left office — that infamous advocate of private-sector predation at the expense of the worthless poor. Doesn’t Ryan want to cut taxes for the rich? He would reduce tax rates, while making the revenue up by closing loopholes and deductions. This Darwinistic notion was endorsed by President Obama’s own fiscal commission, chaired by men the president fulsomely praised without ever once mentioning that they were a danger to the weak and the vulnerable on account of their unhinged belief in a society run by and for the evolutionarily superior. But Ryan wants to end Medicare, doesn’t he? Ten years from now, Ryan proposes introducing an element of choice into Medicare while limiting the program’s growth to the GDP growth rate plus 0.5 percent, the same spending goal that the president sets out in his own budget. If Ryan is “red in tooth and claw” on Medicare, so is the president. The difference is that President Obama prefers a price-setting bureaucratic panel to competition as his Darwinistic tool to weed out the maladapted elderly. If the president were asked to enunciate a line between heartless social Darwinism and prudent budgeting, he surely couldn’t do it. What he means by a social Darwinist is someone who wants to spend less money than he does. By this standard, the president is a damnable social Darwinist compared with the Congressional Progressive Caucus, which wants to spend $1.5 trillion more than he does over the next ten years and raise taxes by several trillion more. If social Darwinism is merely the belief that the market is the best system for allocating capital and wealth, and that a free society will necessarily be an unequal one, then almost everyone in America is a social Darwinist. Even the president constantly pledges fealty to the market and doesn’t want to confiscate all of Mark Zuckerberg’s income. He is using social Darwinism as a free-floating pejorative for people whose policy preferences he doesn’t like, which is entirely appropriate. The liberal historian Richard Hofstadter popularized the label in a book he wrote in the 1940s. He applied it to supporters of the free market in the 19th century who never applied it to themselves. As Princeton professor Thomas Leonard points out, American businessmen in the Gilded Age rarely leaned on Darwin: “Their defenses of laissez faire much more commonly invoked religion, the common good, Horatio Alger mythology, the American republican tradition.” Even the two alleged theorists of social Darwinism, Herbert Spencer and William Graham Sumner, were complex figures and awkward fits for the term. Hofstadter used social Darwinist, Leonard writes, “in the traditional way: as an epithet to discredit views he opposed.” In this respect, liberalism hasn’t evolved at all down through the decades: Seventy years later, it’s still the same witless insult, for the same reason. — Rich Lowry is the editor of National Review. He can be reached via e-mail: [email protected]_ (mailto:[email protected]) . © 2012 by King Features Syndicate _Permalink_ (http://www.nationalreview.com/articles/295621/social-darwinist-smear-rich-lowry) -- _ "Free speech is meant to protect unpopular speech. Popular speech, by definition, needs no protection."—Neal Boortz -- Centroids: The Center of the Radical Centrist Community <[email protected]>_ (mailto:[email protected]) Google Group: _http://groups.google.com/group/RadicalCentrism_ (http://groups.google.com/group/RadicalCentrism) Radical Centrism website and blog: _http://RadicalCentrism.org_ (http://radicalcentrism.org/) -- Centroids: The Center of the Radical Centrist Community <[email protected]> Google Group: http://groups.google.com/group/RadicalCentrism Radical Centrism website and blog: http://RadicalCentrism.org
