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Finger pointing 101..

September 22, 2008

Seems I’ve gotten a ton of correspondence regarding the nations current financial fiasco and where to ‘stick the blame’. We may not be good at a ton of things but man can we assign blame like nobodies business.

I’m curious to see the reaction to this article and the implications that are clear both party wise, and more specifically candidate wise.

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.

49 Comments leave one →
  1. bcrossman permalink
    September 22, 2008 12:30 pm

    If you read the bill its main goal was to pass the oversight buck from Congress to an “independent” trust for review. I’m not sure this is more regulation, it feels like deregulation by taking it out of congress and to an outside entity and therefore faces the same regulation/deregulation arguments that Republicans and Democrats always have. Strangely enough, the oversight entity created would likely have resembled the SEC, a “independent’ oversight group which McCain now blames for the problems and whose CEO McCain wants “fired”. In reading about the bill, including the comments of the main sponsor (Hagel), I think the eventual goal was to get the government out of the mortgage business in hopes that private companies would step in. McCain complaint was not “what” they were doing, but rather that it had gotten so big and that it was the government doing it (his complaint about GSE’s in general). The article hints at this by pondering what world would look like where you “take away Fannie and Freddie”. Unfortunately, this would have created even more private companies that needed to be bailed out instead of a bunch of private companies as well as Fannie and Freddie. I don’t see the American taxpayer really saving that much and you have to wonder if a less regulated mortgage market (one without Fannie/Freddie) would have created even more “creative” financing solutions and gotten us into more trouble. Anyways, as for Barack getting the 2nd highest of PAC and Employee contributions, don’t you think those should be split, if Fannie/Freddie employees tend to be liberal (which given the mission of the organization, it seems it would) then I’m not sure their gifts can be viewed as some lobbying effort. PAC’s on other hand are more directed and do seek tit for tat. So take that list and sort by PAC contributions and you’ll find Obama at 129th with $6K with the top 4 spots held by republicans. Sorry for all the quotation marks, I get carried away with them.

  2. 02132guy permalink
    September 22, 2008 1:02 pm

    There was a Republican majority in both the House and Senate. If is silly to blame Democrats for blocking this bill.

  3. mschol17 permalink
    September 22, 2008 1:21 pm

    From Obsidian Wings:
    In making his case, McCain relies on his 2005 co-sponsorship of S. 190, which would have improved oversight of Fannie Mae and Freddie Mac. While I think McCain is wrong to say that “the lobbyists, politicians, and bureaucrats who succeeded in persuading Congress and the administration to ignore the festering problems at Fannie Mae and Freddie Mac” were “at the center of the problem”, McCain was right to try to get stronger oversight in place. However, that bill died. According to Mike Oxley, the Republican Congressman who wrote it:

    “Mr Oxley reached out to Barney Frank, then the ranking Democrat on the committee and now its chairman, to secure support on the other side of the aisle. But after winning bipartisan support in the House, where the bill passed by 331 to 90 votes, the legislation lacked a champion in the Senate and faced hostility from the Bush administration.” (Emphasis added.)

    There’s a reason McCain relies so heavily on his co-sponsorship of this bill: it’s the only bill he has sponsored or co-sponsored during the last two Congresses that has anything to do with mortgage or banking reform. You can gauge the depth of his concern for this issue by the fact that in 2008, when a bill establishing tougher oversight over Fannie Mae and Freddie Mac did make it to the floor of the Senate, John McCain didn’t bother to show up for the vote.

    The legislation lacked a champion in the Senate, according to Mike Oxley, the Republican who wrote the bill.

  4. September 22, 2008 1:30 pm

    So a McCain adviser says this is all Obama’s fault. I guess it must be true!

    Let’s check his record. Kevin Hassett “is coauthor with James K. Glassman, of Dow 36,000: The New Strategy for Profiting From the Coming Rise in the Stock Market. It was published in 1999 before the dot-com bubble burst. The book predicted that the Dow Jones industrials index would rise to 36000 within three to five years–i.e., 2002 or 2004.”

    Sounds like he’s been wrong about everything. So, needless to say, he’s failed upwards to become a McCain adviser, kinda like Phil Gramm.

    You should find someone smarter, and infringe their copyright by copying and pasting their entire article on your blog.

    Find one impartial economist who thinks McCain has any idea what he’s talking about on economics, or that S.190 actually would have averted anything.

    Also, McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations.

    I submit that the GOP’s mania for deregulation, regardless of facts or context, is more to blame than the Democrats who took control of Congress under 2 years ago.

    But every fair-minded observer has to admit that the lobbying by Fannie and Freddie went to both parties, and that both parties were all too willing to look the other way. Obviously, you have your point of view, which is as well-thought-out as an eight-year-old Yankees fan who hates the Red Sox, but grown-ups recognize that there’s plenty of blame to go around.

    And we cannot, cannot, cannot give a $700 billion blank check to anyone, ever, except the Risen Christ. Paulson is a competent man, but he is not infallible. All conservatives and liberals should oppose this plan. As one well-informed person put it, “this is not the kind of unanimity from the blogosphere which one finds in cases of clear-cut idiocy like John McCain’s proposal during the primaries to temporarily abolish gasoline taxes. No one’s saying that Paulson is stupid or that an argument can’t be made for his plan. It’s just that no one seems to be making that argument.”

  5. frustratedgamer permalink
    September 22, 2008 1:34 pm

    Interesting article, personally the blame game needs to end. We as a nation have to take action to prevent it from happening again. We need to go back to living smaller, with less “bling”, and go back to basics. Yes this is a tough thing to do, since we all like our “stuff”. I see the problem as being both parties equally, those that have money and those that don’t have money. It affects us all and we all have to do with less. From the people that bought that new house and knew that in 3-5 years when the apr bumped up a notch they wouldn’t be able to afford the new home, to the people that accepted that loan and knew that in 3-5 years the person wouldn’t be able to afford it. I believe both parties need to stop the finger pointing, the jabbing, the who said what, and make this a non-election issue. The people of this country need a solution, not a few sentences during a campaign speech to get them elected. Both candidates have flip/flopped on nearly all issues to make there piece, and its embarrassing to see each of them do it. I agree with McCain on some items and I agree on Obama on some items and I disagree with McCain on some items and I disagree with Obama on some items. Rather than the two of them argue who is better, why don’t they join hands, and figure out how as a pair to solve this countries situation vs against each other, since they are both elected officials at this time, (and how they both preach about bi-partisan support) they should start acting more like that in this time of need.

  6. September 22, 2008 1:34 pm

    Um, I wish you had a preview function. I was needlessly insulting in my post.

    You said you wanted to read people’s reactions, not, “everyone who disagrees with this article is a pooh-head,” and I essentially called you a pooh-head.

    My apologies.

    The points that Hasset is not a person to be taken seriously given his affiliation and track record, that this crisis is 60/3o the GOP’s fault (Pres. Clinton signed Gramm’s Glass-Stegall repeal, though), and that both parties were eager to look the other way, all stand.

    Thanks, as always, for having a forum for discussion.

    *slinks away*

  7. edsmedia permalink
    September 22, 2008 2:21 pm

    Hi Curt,

    I’m sorry, but your reporting is factually incorrect. S.109 was killed in the Senate Banking and Housing Committee. It never made it out of committee.

    The full legislative history is available at:

    As an ACTUAL conservative, it is still shocking to me that Senator McCain advocated (and apparently still advocates) privatizing significant pieces of the most-successful financial infrastructure in the world. That is hardly a conservative viewpoint.


    — Eric

  8. September 22, 2008 2:31 pm

    If slinging B.S. burns calories, you’re going to make weight easy, Curt.

    From the New York Times:

    “Senator John McCain’s campaign manager was paid more than $30,000 a month for five years as president of an advocacy group set up by the mortgage giants Fannie Mae and Freddie Mac to defend them against stricter regulations, current and former officials say.”

    Yeah, he’s real squeaky clean in all this.

    HAHA! That’s your point of reference? They NYT! Seriously? A paper run by people and writers who have made it clear that Governor Palin is the Anti-Christ and a group that couldn’t dislike Senator McCain more than they do??? That’s hilarious. I say that because both sides seem to be doing much of the same, but come on, you could shoot for another source that isn’t so blatantly biased and full of crap. Should be called the “New York Enquirer”. I would like to know what they were saying though, because it hints at something pretty specific but if it is, why wouldn’t they specifically site the group so we could all see the ‘truth’ for ourselves? My guess would be because their spin above sounds so much better and like most others they count on our laziness to actually fact check

  9. jonnyjbones permalink
    September 22, 2008 2:49 pm


    Curt please stop it! You are killing me with your lack of understanding! You are the Sarah Palin of bloggers. Good looking but completely without substance.

    ALL of this happened on the Republican’s watch. THEY changed the rules in 2002 which caused this mess. Now your “pal” Bush is trying to stick it to the American people by bailing out the rich wall street investment houses!

    Thanks for 8 years of failure misery and death Curt. You sure can call em!

    Now tell us sheep what we should be doing next? I am waiting with baited breath!

  10. mainermarsh permalink
    September 22, 2008 3:09 pm

    There is plenty of blame to go around, but there is one core cause for it all.


    Greed from the people loaning money they knew they could not afford to pay back.

    Greed on the part of the mortage companies handing out loans to those they knew could not afford them.

    Greed on the part of huge entities like Fannie and Freddie that continued to buy up more and more mortages when the going was good and cried for help as soon as things began to turn.

    Greed from the CEOs of companies losing billions a year yet still accepting severance packages worth tens of millions.

    Greed from those sitting on the boards of these companies that were fat and happy enough to question the dealings of the companies they were supposed to oversee.

    Plenty of blame to go around, but unfortunately it seem like the only people who are important enough to get help are those in the banking and loan system. The people tricked into the loans and the stockholders that got swindled by greedy CEOs? Ah, well I guess like most Republican plans they are outta luck.

    The only part that really bothers me Curt is that the Democrats are trying to put provisions in this bill to protect the taxpayers and are getting attacked for it at every turn by the Republicans. There is no way that our money should go to fund an incompetant CEO’s $50 million golden parachute.

  11. kevmyster permalink
    September 22, 2008 3:52 pm

    You pass fingerpointing 101. Democrats obviously suck. So does your party, though. A different article with a different angle could just as easily blame the crime family known as the Republicans for this crisis. You just wouldn’t post such an article here. If Americans lived within their means, this problem wouldn’t exist. The government just exacerbates this problem by behaving just as recklessly with the money it extorts from its citizens every year.

    On another note, I particularly liked this quote from that article…
    “Perhaps some found their propaganda convincing.”

    Do you not see the irony/hypocrisy of this statement? Let’s not forget who was selling the propaganda on the eve of the Iraq war. Or who was buying it.

  12. 38cantpitchnemore permalink
    September 22, 2008 4:00 pm

    You really seem to be taking it on the chin lately by the vast majority of your posters, Curt. I applaud you for having the forum here to try and generate some meaningful discussion about topics that affect us all. Freedom of speech is a great thing. Now please read on as more responders smack your candidate around.

  13. tdmtown permalink
    September 22, 2008 4:27 pm

    So, still going on the false truth that somehow the Democrats controlled and blocked, “‘ol John”‘s bill? Even though the republicans controlled the house and senate in 05?

    You’ll just never stop with the blatant stupidity, will you?
    Just print stuff that is actually TRUE, as a whole, and your usual parroting punditry and people won’t call you out for being a MORON.

    The greater fact is that by 2005, we were on the DOWNSIDE of the bubble, and anyone who knew better knew it was too late.
    So ” ‘ol John” was a few years behind.
    By 2005 most of the stupid loans had been written and were just waiting to go belly up. I bought a house in early 02 and sold it in 04 at a ridiculous price/profit. Couldn’t imagine the mortgage the buyers (a young couple) were undertaking.

    Most things in Gov’t are usually the “fault” of all the idiots in the system.
    We can usually blame one side or the other, and often do.

    Believe it or not, as you go on the radio and have a blog,
    YOU are part of “the media”……. yes it’s true.

    Curious why the times would be crap for being biased and you, as part of the media, aren’t? Maybe you should actually fact check and take that
    60 seconds to actually do the slightest bit of research on the stuff you print/parrot, but clearly you have no interest in that.
    Punditry gives you that much of a hard on that you eschew facts and the truth?
    Or is it “well THEY(the Dems) don’t speak the truth, or use silly things like actual facts, so why should Curt Schilling”
    Good luck with that. Fine example you are setting for your children.

    Maybe you should call THIS site “38’s Inquirer”

  14. teddywilliams9 permalink
    September 22, 2008 5:58 pm

    I am at a loss for words Curt.

    I’m not saying Obama is perfect, but look at the facts man. McCain may look good to you, but you are rich as hell. McCain is (in the words of a spokesperson from CNN) “going to gamble tax payers money on Wall Street”…. How is this a good thing? You are so worried about Frannie and Freddie, one of the many faults of Obama (I am not afraid to admit this as you are with precious John McCain)… Bush got us into this economic crisis with his BS bills and guess what. MCCAIN VOTED WITH HIM OVER 90% OF THE TIME.

    I can go on and on about the crud McCain has pulled in his 30 some odd years in Washington.

    But Curt, you are missing the flipping point. Look at the other side. There is more to a country than pulling a name out of a hat, finding only good in them, and completely bashing the other without really looking into their ideas and such.

    Maybe you are just blind to the average American’s point of view Curt, I certainly don’t want to waste my hard earned money, which by the way, is sometimes not enough for a tankful of gas and dinner for the family.

    Sorry Curt I wasn’t good at baseball like you were so I could be rich and above the average man’s plea.

  15. brightterry permalink
    September 22, 2008 6:29 pm

    God is everywhere, His will lies behind everything. He is punishing people who took out subprime mortgages, because they are bad people.

  16. crin4heals permalink
    September 22, 2008 6:38 pm

    Everyone, well not everyone, just those of whom actually understanding things know that the Dems are dumb, perhaps among the dumbest people on the plant. Now, I’m not saying that us, Conservatives are the smartest people in the world, but I for one remember and understand the old saying that “time heals, all wounds”. Everything has ups and downs, it’s part of life. Just go with the flow. There is no quick solution.

  17. September 22, 2008 7:00 pm


    Dude, please get back to baseball. You are truly a great baseball mind, and with the Sox making the playoffs yet again give us some thoughts. Yes they will not make it past the Rays but hey. Baseball not Sara Palin…Baseball cmon there is only One October…cmon guy I have this blog on my blogroll so lets get back to the subject at hand. Or how about some thoughts on the Patriots imploding against the Dolphins…or did you see the Yankees final game at the cathedral…….Baseball cmon focus

    Zman sends

  18. September 22, 2008 7:00 pm

    I agree with what mainermarsh posted about greed.
    And that’s not a republican or democratic party issue — that’s a societal issue. Members of both parties have fed into the vicious cycle of greed.

    What to do about it, that’s the question.
    And which person, not which party – is going to have a legitimate and honest potential solution. (I know, honesty in politics? Shaa..)

    Don’t laugh, but you know who I’d have loved to have seen run? And I’m sure this is going to cause an uproar all around – but I voted for him before, and I think I’d vote for him again — Ross Perot. Sure, he’s crazy…but he’s a businessman, and he knows money. Truthfully, I don’t know how old he is — he’s probably too old, but he is a very smart man with regards to finances.

  19. soxoct27 permalink
    September 22, 2008 7:19 pm

    Mr. Schilling i am a huge fan of yours, i loved watching you compete, i often check to see what you have updated on your blogs, admire your work in the community maybe most of all love listening to you rip on meter in the mornings. ass kissing aside, sometimes i have to question your responses, when you ridicule obama supporters for sophomoric responses but when somebody post something against Mr.McCain and offers a source you don’t like its dismissed. sure is the times a bit bias yes, as is every paper in towards a certain candidate, if we can’t take information from any of them then where do we go to help form our opinion? the BS that gets thrown around from candidates yours and mine, and papers and blogs is hard for anybody to weed through and get information but it doesn’t mean its all incorrect. here is another link with that info, i am not sure if its the same thing the times had before or not, but where it appears the other info was dismissed because it was “reported by” the times, this is a letter to the editor there

    written from a man who worked for Fannie Mae. should we call this gentleman a liar too because he doesn’t fit the McCain agenda?

  20. papifan permalink
    September 22, 2008 8:11 pm

    Curt, your author I think is living in republican fantasyland. Hopefully actual historians will be writing history and not democratic or republican idealogues. While this writer puts all the blame on democrats (surprise, surprise), I watched another cable show slanted to the left who blamed everything on Bush and Alan Greenspan (surprise, surprise). As a person who frankly is sickened by both parties, here is the truth. Yes everything in the Fannie Mae article (except for the contributions, I don’t know but I will take the author at his word, since both parties are bought and paid for) It is just made up of different special interest groups which buy the policiticans. The mismanagement and corruption of Fannie Mae and Freddie Mac is probably going to go up as 1A or 1B. But because of the repeal of the Glass-Steagal Act in 1999, which was put in to protect from the public from economic crises, the walls between banking, investment management, and insurance were broken down and these financial behemoth companies were allowed to come about. Without the repeal of this act, this situation would not have occurred. Personally I think the repeal of the Glass-Steagal Act was a bigger reason for this collapse, but they certainly go hand and hand, and I don’t even understand how anybody could argue otherwise. These companies were mismanaged. These organizations are supposed to know how and manage risk??? They failed us as well as all the SEC commissioners since 1999. I keep hearing this companies are too big to let fail. Well how the hell were they allowed to get so big. Because of the repeal of this act, which allowed for the horrible mixture of banking, investing, and insurance being combined. The third factor is the people that took out these loans they could not afford. Capitalism is based on personal accountability. Republicans USED to believe in this. I read an article in the Wall Street Journal about some guy making 250,000+ a year, until he lost his job, who can’t sell his home which he bought for 2.5 million dollars and now is going to be foreclosed on. I am supposed to feel sorry for him??? Give me a break. Where is the accountability?? That is somebody who is living beyond his means or pushing his lifestyle to the limit. Frankly anybody with half a brain, would have looked for a more reasonably priced house. Way too many people like this, who managed their finances recklessly. Of note both parties hands are dirty on this one. Fannie Mae and Freddie Mac are the fault of democrats. The Glass-Steagal Act is the fault of the republicans (Phil Gramm the sponsor, who is one of McCain’s main economic advisors) and Bill Clinton who signed the bill. Of note, John McCain supported this bill. Obama is making out, because most of the stain on this one was the result of actions before he arrived on the scene. Hard to say how he would have acted. It certainly appears he contributed to the Fannie and Freddie problem when he did get in power, based on the monies he received from these organizations. As far as Bush, his policies and appointments excarbated the problem (with his reckless spending, his ridiculous irresponsible ownership program, which encouraged people that could not afford homes to be economically reckless, and debasing of the currency), but he really is clean on being the root cause of the problem. I know, very hard to believe this.

  21. bcrossman permalink
    September 22, 2008 8:21 pm

    Just to chime in on what other people have said, thanks for opening up your posts for comment. You’ve found good articles that show why you support McCain and I, like everyone else, appreciate the chance to discuss them and provide our alternative view. So thanks for the articles, the forum to discuss them, and of course for ending an 86 year “curse”. Go Sox.

  22. September 23, 2008 6:41 am

    Curt, I have to say that I’m not clear what your intention is in posting this kind of stuff. While it’s perfectly cool to blog one’s own views, if it’s intended to provoke serious discussion, I don’t think you’re getting it; although there are invariably thoughful comments on your political posts, they are buried in a flood of bile and vitriol.

    On the other hand, if your intention is to poke at ‘libruls’, them I guess you’re getting what you want… but I think that’s part of the problem, not the solution.

  23. September 23, 2008 7:35 am

    Really? The old “New York Times is liberal” defense? Weak sauce, Curt. Weak sauce. (Sorry to mention sauce). It’s especially ironic that you cry bias after quoting something from Bloomberg – hardly a bastion of objectivity.

    But seriously, how about addressing the points of fact contained in that piece, rather than just falling back on Republican chestnuts?

  24. jonnyjbones permalink
    September 23, 2008 10:25 am

    Curt has now been brainwashed completely. Campaign talking points are valid facts but the newspaper must be dismissed out of hand. I agree that everyone must fact check everything now but Curt lets face it you are the worst fact checker in the history of fact checkers.

  25. September 23, 2008 10:59 am

    Please explain your policy and thoughts on citations. You posted an un-attributed, un-cited article for comment. I had to google phrases of the article to figure out who wrote it, where it came from, and only then was I able to start looking at where he got his information from.

    But whenever someone challenges you with specific information, your first defense is either to ask for a citation for that piece of information, or, if it was cited, to disparage the source of the information.

    What gives?

  26. September 23, 2008 11:35 am

    From my blog

    Lemme get this straight – a regulation bill that would have prevented all this would have been passed if Democrats hadn’t opposed it? With a Republican majority in both houses and a Republican President?

    Barack Obama is to blame for the failure of a bill that never made it out of committee – a committe that he was not and has never been a member of, and which had, at that time, a Republican majority?

    Yeah, right.

    My own entry has the link to the original article, but in fairness Curt did cite that it came from Bloomberg.

  27. teddywilliams9 permalink
    September 23, 2008 12:24 pm

    Finger Pointing 101…

    Curt wtf. all you do is point the finger at Obama and the Democratic party. Look, if you want to point fingers, point them at jerks like yourself who back people for the WRONG REASONS. I can respect any man who makes an educated decision. What is wrong with looking at the other side of the problem. If you constantly refuse to do that, you ignore possibilities. I am guessing that you told some bigshot that you are a Conservative and he fed you all the crap you put on this website. What you have is biased crud and if you don’t look at the other side you don’t have any right. I am pretty sure you don’t read these comments, but if you do, you would know how much i have actually paid attention the last few years. I can respect you if you make educated accusations, but Mr. Schilling, you are the farthest thing from educated on this matter and for that, I give you no respect, nor should anyone whether Liberal nor Conservative nor Independant. There is no good in what you say.

  28. mannysps2 permalink
    September 23, 2008 1:07 pm

    I’d say you are probably better served to keep that GOP opinion to yourself, but what the hey, it’s a blog, and it’s your blog, so have at it! I disagree entirely, butI also know you disagree with my political opinions entirely. Either way, the direction of the country is not sunshine and roses right now, and i hope whomever wins will restore faith and hope in our economy and foreign policy amongst the constituency. BUT, I do hope you reply to dumb questions, because my blog is kicking butt. Understand that we love you as a ballplayer and a person, but the blog idea was ripe for the picking. Hope to see you hurling the sphere again next year for the Sox, political opinions be damned! Hope the wing is feeling better!

  29. str33tsp1r1t permalink
    September 23, 2008 1:31 pm

    Thoughts on fingerpointing and greed..

    Corporation: an ingenious device for obtaining individual profit without individual responsibility. (Ambrose Bierce, The Devil’s Dictionary. Bierce’s definition of impunity is “wealth”).

    I hope that we shall crush in its birth the aristocracy of our moneyed corporations, which dare already to challenge our government to a trial of strength, and bid defiance to the laws of our country. (Thomas Jefferson, in 1816, quoted in Lawrence Goodwyn, The Populist Moment).

    Let us disappoint the men who would raise themselves upon the ruin of our country. (John Adams).

    In general, the art of government consists in taking as much money as possible from one class of the citizens to give to another. (Voltaire).

    Commerce is entitled to a complete and efficient protection in all its legal rights, but the moment it presumes to control a country, or to substitute its fluctuating expedients for the high principles of natural justice that ought to lie at the root of every political system, it should be frowned on, and rebuked. (James Fenimore Cooper, The American Democrat, 1838).

    Big business is not dangerous because it is big, but because its bigness is an unwholesome inflation created by privileges and exemptions which it ought not to enjoy. (Woodrow Wilson, acceptance speech, Democratic National Convention, July 7, 1912).

    You shall not press down upon the brow of labor this crown of thorns, you shall not crucify mankind upon a cross of gold. (William Jennings Bryan, speech at Democratic National Convention, 1896).

    Do you want to know the cause of war? It is capitalism, greed, the dirty hunger for dollars. Take away the capitalist and you will sweep war from the earth. (Henry Ford, interview, Detroit News).

    No business is above Government; and Government must be empowered to deal adequately with any business that tries to rise above Government. (Franklin D. Roosevelt, in Money Talks).

    When the men in Russia foul up, they are dismissed, sometimes losing their necks. But we protect those who fail and press them to the government bosom. Hyman Rickover, U.S. Navy, in Money Talks.

    Nothing short of a federal investigation can begin to disclose the abuses which have woven a fine web of mutually implicating relationships between businessmen and government officials. Ralph Nader

    The great, greedy, indifferent national and international economy is killing rural America, just as it is killing American cities… Experience has shown that there is no use in appealing to this economy for mercy toward the earth or toward any human community. All true patriots must find ways of opposing it. (Wendell Berry, Conservation and the Local Economy, Sex, Economy, Freedom, & Community: Eight Essays, Pantheon, New York, 1993).

    Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. (John Maynard Keynes).

    I sympathize therefore, with those who would minimize, rather than those who would maximize, economic entanglement between nations. Ideas, knowledge, art, hospitality, travel–these are the things which should of their nature be international. But let goods be homespun whenever it is reasonably and conveniently possible; and, above all, let finance be primarily national. (John Maynard Keynes, “National Self-Sufficiency,” in The Collected Writings of John Maynard Keynes, vol. 21, edited by Donald Muggeridge. London: Macmillan and Cambridge University Press, 1933).

    If monopoly persists, monopoly will always sit at the helm of government. I do not expect monopoly to restrain itself. If there are men in this country big enough to own the government of the United States, they are going to own it. (President Woodrow Wilson).

    There is not one grain of anything in the world that is sold in the free market. Not one. The only place you see a free market is in the speeches of politicians. (Wayne Andreas, CEO of Archer Daniels Midland, Z Magazine, April 1997, p. 29).

    The root of the evil… lay not in corruption but in the system which bred it, the alliance between industrialists and politicians which produced benefits in the form of tariffs, public lands, and federal subsidies. (Samuel P. Hays, The Response to Industrialism 1885-1914, p. 26, describing the view of E.L. Godkin, who founded the weekly Nation).

    Every man is equally entitled to protection by law; but when the laws undertake to add… artificial distinctions, to grant titles, gratuities, and exclusive privileges, to make the rich richer and the potent more powerful, the humble members of society–the farmers, mechanics, and laborers–who have neither the time nor the means of securing like favors to themselves, have a right to complain of the injustice of their government. (President Andrew Jackson, veto of national bank bill, July 10, 1832).

    Did you ever expect a corporation to have a conscience, when it has no soul to be damned, and no body to be kicked? (Lord Chancellor of England Edward First Baron Thurlow, cited in Business & Society Review, No. 72, Winter 1990, p. 51).

    This country, with its institutions, belongs to the people who inhabit it. Whenever they shall grow weary of the existing government, they can exercise their constitutional right of amending it, or their revolutionary right to dismember or overthrow it. (Abraham Lincoln, First Inaugural).

    Competition, free enterprise, and an open market were never meant to be symbolic fig leaves for corporate socialism and monopolistic capitalism. (Ralph Nader, introduction to The Closed Enterprise System).

    Those who profess to favor freedom, and yet depreciate agitation, are men who want crops without plowing up the ground. They want rain without thunder and lightning. …Power concedes nothing without a demand. It never did and it never will. …Find out just what people will submit to, and you have found the exact amount of injustice and wrong which will be imposed upon them; and these will continue until they are resisted with either words or blows, or with both. The limits of tyrants are prescribed by the endurance of those whom they oppress. (Frederick Douglass, 1849).

    I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. … corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed.” (U.S. President Abraham Lincoln, Nov. 21, 1864, letter to Col. William F. Elkins, in The Lincoln Encyclopedia, by Archer H. Shaw).

    This a a shock dcotrine operation by the ownership class. Democrats and Republicans will ram something through congress that will make programs like AFDC and food stamps that serve mostly children appear beyond cheap.

    This is nothing short of corporate wellfare at the expense of our children and grand children. To paraphrase Tip O’neal (I think) 700 Bilion here, 700 billion there, pretty soon you’re talking about real money. If I hear a conservative complain again about “entitlement” mentalities, or “personal resposibility/taking ownership” etc I might need to be restrained physically. Seriously.

  30. str33tsp1r1t permalink
    September 23, 2008 2:36 pm

    PS: I see that Palin is meeting with Henry Kissinger today.

    Kissinger’s brother, when asked why he had lost his german accent while Henry had not, stated “Its because he never listens”.

    Well then, that should be a very short meeting. Palin has nothing to say, and Kissinger never listens. It will make the idealouges on the nutjob right happy though.

    Palin is an empty pant-suit with great ambition and no intelectual curiosity. Now who does that sound like….. I know why the GOP goes for these candidates, it’s becaus they can control that person absolutley once in office. They don’t have to worry they will be independant of the party or have (god-forbid) ideas of thier own.

  31. aenashi permalink
    September 24, 2008 8:53 am

    HAH, so i sent this to my dad.. his response was the greatest. We are both St Louis Cardinal fans:
    Mike, this is good detailed information I didn’t know. It’s really amazing, especially coming from a former Boston Red Sox pitcher. Did you send this
    to anyone else?

  32. September 24, 2008 2:09 pm

    Apparently the person who wrote the above article (Kevin Hassett) is now refusing to debate Brad DeLong, an Econ Prof at Berkley, about Obama and McCain and their economic policies.

  33. dianesfastball permalink
    September 24, 2008 3:20 pm

    I don’t know if you know this or not..but..we’re going to the playoffs and if I can take that and eliminate some of the bs from both sides of this blog..I’m gonna take it and run with it as far as i can….because while baseball is just a game, it does free us sometimes…

  34. escondidoguy permalink
    September 24, 2008 7:06 pm

    Curt you obviously understand the background to this fiasco but I love to read the tripe from the Obamaniacs. McCain asked for more oversight for Freddie and Fannie and it didn’t pass because 90% of the moronic dems and a few Rino s voted against it. But of course the lilliputian minds that drink the democratic Kool aid want to defend their indefensible positions by attacking Republicans.

    Dems read my lips “McCain asked for more regulation in 2005”. One more time, “McCain asked for more regulation in 2005”.

    Still don’t get it do you….OK how’s this – While the price of housing was going through the roof dems like Hillary, Biden, Reid and especially Barney Frank were freaking out that the lower income people were “being left behind”. So they sneered and fought and received tons of media support from all the bleeding heart liberals to lower the regs on home purchases. And what happened ? Dems lied and the housing market died.

    Now all those dems and their moronic bloggers are trying to turn this around on the Republicans. What a load of BS. And to the blogger above who said the Republicans are to blame because they where in control of Congress that year has proven that it only takes threats, lies and a lot of media control to turn this country into a giant socialist state. They just may get their wish. With Barak in charge God help America.

  35. jonnyjbones permalink
    September 24, 2008 9:12 pm

    The Community Reinvestment Act, which has been around since 1977, and understood so poorly by pseudo-intellectuals like escondidoguy and pretty much everybody on Fox news did NOT cause these problems.

    It was edited in 1995 under a republican controlled congress and then AGAIN in 2002 under a republican controlled congress and whitehouse. It was born to remove some racist practices that banks were using however it did NOT force banks to give bad loans to anyone at ANY time. If anything the bundle of regulations REMOVED by the republican controlled government in 2002 gave practice to the predatory lending and mortgage backed security rating schemes which allowed us to come to this point.

    Now we know people like escondidoguy and myself are angry. But he is blaming the wrong people as he, LIKE ALL THE REAL SHEEP WHO BELIEVE GEORGE W BUSH, have been trained to do by Faux News, Rush Limbaugh, Sean Hannity and the rest of the liars who have them by nose.

    Now I listen to the “news” radio and just now, this past week, the mortgage broker commercials have finally stopped. They stopped advertising “no money down” mortgages and stopped saying that they have “plenty of money” and “no credit history will be checked”. Doesn’t that sound like these poor, poor banks were practically BEGGING people to come in and take bad mortgages? Why? Because they weren’t lending their OWN MONEY!

    Please folks please think before you post and don’t be shallow thinkers like escondidoguy and Curt Shilling!

  36. arm1982 permalink
    September 25, 2008 9:17 am

    How can you blame the Democrats for this? That is totally absurd. Im ashamed to call myself a republican these days because of Bush and his failed domestic, foreign, economic, education etc policies. This entire administration is a failure. I like John McCain, he seem’s like a well qualified candidate to take over but his problem is instead of focusing on the issues and takin them head on, he’s more concerned about Roveian tactics to get inot office. Sarah Plain is an utter disgrace. Everything she said at the convention was a f****** LIE! Where to begin…

    1. the jet liner she supposedly sold on eBay for profit? Sold to a campaign contributor at a 600k loss to taxpayers which may lead to an additional 50k loss due to malfunctions.
    2. Supported the “Bridge to nowhere” even though she stated “I told Congress thanks, but no thanks on that bridge to nowhere.” She then spent 223 million in other pork projects throughout the state.
    3. She spent 15 million on a new hockey rink in Wasilia when they have a budget of roughly 20 million. But she “stopped government from wasting tax payer money” according to John McCain.

    This is just a small list, trust me it goes on. Call it propaganda, or BS, but its fact. i dont know HOW anybody can continue to vote for this party into the Fed Government. Its beyond me. I know Curt doesnt care becasue he got his 8 million dollars this year for doing nothing, but me, my family, my friends, my neigbors have increasing debt, shrinking bank accounts, and shrinking retirement plans due to the GOP’s failed action in the financial sector and it certianly wont get better with the next batch of goons.

    Typical of us GOP members is to call Dems names and this and that but the fact of the matter is, when they hold the Oval Office, EVERYBODY wins! I loved Mitt Romney and always will, I only wish he could have beat out McCain. If we continue to vote these old Washington politicians in, it simply wont get better.

  37. jonbuffalo permalink
    September 25, 2008 11:51 am


    If you’d really like to do something nice for King George’s subjects, why don’t you donate the money you admit you’ve been “robbing from the payroll” of the Sox. Put it towards the bailout of the economic crisis. Save some for the execs reward money. Yeah, after spending 85.00 to fill up my gas tank, I’m really in the mood to give some Wall Street CEO a multi-million dollar golden parachute. Why reward the the people that are ruining this country? Why vote for McCain whose USING this situation for his campaign?He’s not postponing his campaign, he’s putting a new spin on it. How stupid do you think we really are? You’re not backing McCain for us, you’re lining up your future so you can play with the 8 million you stole from Red Sox fans. Before you go on record again trashing Manny, take a good look in the mirror first. Go play golf with Clemens. Maybe you two can start your own blog together. Call it dodger.roger.

  38. eric98004 permalink
    September 25, 2008 6:29 pm


    An intelligent person knows that there is not one political party responsible for the mess we are in, it is ALL of Washington. Now, I understand that you and Sean Hannity believe that the wise and powerful McCain craps flower blossoms and unicorns – but it just isn’t so.

    There are MANY things that led up to this mess caused by both parties. Nearly all members of congress received money from Fannie, Freddie, Lehman, and AIG. You accuse Obama of some wrongdoing for accepting campaign contributions from (then) well respected American companies, but do not go the rest of the way with your argument. – Okay, so he got money from them, now what SPECIFIC ACTIONS, did he do/or not do after receiving money that concerns you?

    Sorry, Curt. I respect that you are sticking with your guy, but I firmly disagree. If accepting campaign contributions makes you guilty, Then blame John McCain for the $4 a gallon at the gas pumps. Sen. McCain leads all members of congress with contributions from the Oil and GAs Industry at $1.6 million dollars in 2008. Is that as mind boggling as the $125k you were worried about Obama accepting?

    Come on Curt. just be reasonable. OR, title your next post “I hate Obama and am voting for McCain and this is why.”

    You are in my prayers.


  39. darkaxis72 permalink
    September 27, 2008 4:40 am

    We can all assign blame god knows there is enough to go around but it is greed at all levels from the politicians, bowerrers, and lenders. It seems all people felt the american dream was owed to them not that it requires hard work and thought. I bought a house in 05 the bank said I could spend 350k and I could have if all I did was pay my mort. and sit in my house but no I did the math and bought a more modest house at 250k. To sit here and have bowerrers blame the banks or govt is insane no one made anyone sign these loans accept some responsibility for your actions, and I do not want to hear about adj rate mort. if you signed one and sat there and thought it would never go up you are a moron adjustable means just that and if you do not take the worst case scenario as a real possibility you are a fool. As far as the banks go they are equally foolish yes the govt may have said to make it easier to give loans but if you do not do your due dilligence on who you are handing money out to that is your fault. As for the bubble this is another piece that could be easliy forseen if money was cheap and all of a sudden a lot of folks are purch. homes then supply is down and values go up but in an inflated sense ( this is called common sense and the same idea applies to energy which is the next big problem and yet nothing has been done in the 4 years which gas prices are out of control and is easy to see on every gas station sign, I am talking to you dem congress not that this problem hasn’t been passed on since Nixon up to now). There are conserv. and liberals and Dems & Repub. and as far as I can tell at least Conserv. & Libs stick to their principles while Dems & Rep only care about votes & power, now there are a few good poltitcians on either side but compared to the greed in Wash they might as well be literally pissing in the wind. Now the folks like me who are responsible with their cash pay their Mort and pay off their Credit cards are going to be asked to pay for this mess as well as all the other social programs and it is unfair to be responsible and to continually have to shoulder more and more for peolpe who are not. In closing we are americans and that means taking care of yourself being responsible for your actions the govt is not here to take care of you it is to be run by the people for the benifit of all not just a few look to yourself for the solutions it is your life and it is your responsibility as an american not the govt, and vote for america not for a party we have the power to fire these fools use it and use it responsibly. as a side note to all the Palin bashers look at how much experience lincoln had in govt before he became president and that turned out pretty well.
    jay Murray
    because i stand by what I said and what I belive

  40. davis5127 permalink
    October 1, 2008 11:56 pm

    The following is a condensation of a series from the Investor’s Business Daily explaining “What Caused the Loan Crisis”:

    1977: Pres. Jimmy Carter signs the Community Reinvestment Act into Law. The law pressured financial institutions to extend home loans to those who would otherwise not qualify. The Premise: Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc.

    Results: Statistics bear out that it did not help.

    How did the government get so deeply involved in the housing market? Answer: Bill Clinton wanted it that way.

    1992: Republican representative Jim Leach (IO) warned of the danger that Fannie and Freddie were changing from being agencies of the public at large to money machines for the principals and the stockholding few.

    1993: Clinton extensively rewrote Fannie Mae and Freddie Mac’s rules turning the quasi-private mortgage-funding firms into semi-nationalized monopoies dispensing cash and loans to large Democratic voting blocks and handing favors, jobs and contributions to political allies. This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.

    1994: Despite warnings, Clinton unveiled his National Home-Ownership Strategy which broadened the CRA in ways congress never intended.

    1995: Congress, about to change from a Democrat majority to Republican, Clinton orders Robert Rubin’s Treasury Dept to rewrite the rules. Robt. Rubin’s Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans to get a satisfactory CRA rating. The rating was key to expansion or mergers for banks. Loans began to be made on the basis of race and little else.

    1997 – 1999: Clinton, bypassing Republicans, enlisted Andrew Cuomo, then Secretary of Housing and Urban Developement, allowing Freddie and Fannie to get into the sub-prime market in a BIG way. Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks. Since they could borrow at lower rates than banks their enterprises boomed.

    With incentives in place, banks poured billions in loans into poor communities, often “no doc”, “no income”, requiring no money down and no verification of income. Worse still was the cronyism: Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats. 384 politicians got big campaign donations from Fannie and Freddie. Over $200 million had been spent on lobbying and political activities. During the 1990’s Fannie and Freddie enjoyed a subsidy of as musch as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.

    Did it work? Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority homeownership rates are shrinking fast.

    1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie’s excesses. Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place. “We manage our political risk with the same intensity that we manage our credit and interest rate risks,” Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama advisor, bragged to investors in 1999.

    2000: Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the “special status”. Democrats raised a ruckus as did Fannie and Freddie, headed by politically connected CEO’s who knew how to reward and punish. “We think that the statements evidence a contempt for the nation’s housing and mortgage markets” Freddie spokesperson Sharon McHale said. It was the last chance during the Clinton era for reform.

    2001: Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform; especially Rep. Barney Frank and Sen.Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.

    2003: Bush proposes what the NY Times called “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago”. Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.

    2005: Then Fed chairman Alan Greenspan warns Congress: “We are placing the total financial system at substantial risk”. Sen. McCain, with two others, sponsored a Fannie/Freddie reform bill and said, “If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole”. Sen. Harry Reid accused the GOP ;of trying to “cripple the ability of Fannie and Freddie to carry out their mission of expanding homeownership” The bill went nowhere.

    2007: By now Fannie and Freddie own or guarantee over HALF of the $12 trillion US mortgage market. The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall St. to repackage the bad loans and sell them to investors. As the housing market fell in ’07, subprime mortgage portfolios suffered major losses. The crisis was on, though it was 15 years in the making.

    2008: McCain has repeatedly called for reforming the behemoths, Bush urged reform 17 times. Still the media have repeated Democrats’ talking points about this being a “Republican” disaster. A few Republicans are complicit but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats. That’s why taxpayers are now being asked for $700 billion!!

    If you doubt any of this, just click the links below and listen to your lawmakers own words. They are condeming!

    Postscript: ACORN is one of the principle beneficiaries of Fannie/ Freddie’s slush funds. They are currently under indictment or investigation in many states. Barack Obama served as their legal counsel, defending their activities for several years.

  41. ksm1616 permalink
    October 2, 2008 11:05 pm

    Hi Curt,

    This is totally unrelated to the topic, but I’m going to keep posting this same post every so often, just so you know how much it means/meant to all of us. Thank You for your 2004 ALCS Game 6 performance. They should be playing that game on NESN every week. You defied the curse, the gutsiest performance I’ve ever seen, on any level (and I’ve seen quite a few).

    Love the posts and the site. Hope to see you back in the Sox lineup next year! By the way, any chance you will be seen at the Hub with the guys during the post-season? Even the curly red headed freak from the globe misses seeing ya!

  42. arniehalp permalink
    October 3, 2008 4:41 pm

    Hey, Curt. Stick with Baseball. You are certainly not a knowledgeable economist or politician.

  43. warbler44 permalink
    October 3, 2008 11:58 pm


  44. walkaboutjones permalink
    October 5, 2008 11:02 pm

    Curt, this is what I will never understand. We have had Republican majorities in Congress for 12 of the past 14 years. We’ve had Republicans in the White House for 24 of the past 36 years. So, in our lifetime, Republicans have been President 2/3 of the time–and have controlled Congress about 92% during your major league career.

    So if we’re in bad shape, how can the Republicans not accept most of the blame? They’ve been calling most of the shots because they’ve been in the voting majority. They’d be taking most of the credit if things were good, wouldn’t they? As a parent, you try to teach your kids to take responsibility for their actions. What kind of example are these leaders setting when everytime something goes wrong, they rush to blame the Democrats. They should step up, admit they made mistakes, admit the need to do some soul searching, and try to learn from this.


  45. fxdudeinmia permalink
    October 8, 2008 3:01 pm

    And more on the subject from Barry Ritholz….read it and educate yourself:

    Subprime Suspects
    Posted by Barry Ritholtz on Tuesday, October 07, 2008 | 09:37 PM
    in Credit | Real Estate | Really, really bad calls | Taxes and Policy

    Dan Gross gets medieval on the wingbut meme that Fannie Mae and the CRA was responsible for the housing and credit mess:

    “We’ve now entered a new stage of the financial crisis: the ritual assigning of blame…On the Republican side of Congress, in the right-wing financial media (which is to say the financial media), and in certain parts of the op-ed-o-sphere, there’s a consensus emerging that the whole mess should be laid at the feet of Fannie Mae and Freddie Mac, the failed mortgage giants, and the Community Reinvestment Act, a law passed during the Carter administration. The CRA, which was amended in the 1990s and this decade, requires banks—which had a long, distinguished history of not making loans to minorities—to make more efforts to do so. The thesis is laid out almost daily on The Wall Street Journal editorial page and in the National Review . . .

    But none of these issues is the cause of the problem. Not by a long shot. From the beginning, subprime has been a symptom, not a cause. And the notion that the Community Reinvestment Act is somehow responsible for poor lending decisions is absurd.

    Here’s why.

    The Community Reinvestment Act applies to depository banks. But many of the institutions that spurred the massive growth of the subprime market weren’t regulated banks. They were outfits such as Argent and American Home Mortgage, which were generally not regulated by the Federal Reserve or other entities that monitored compliance with CRA. These institutions worked hand in glove with Bear Stearns and Lehman Brothers, entities to which the CRA likewise didn’t apply. There’s much more. As Barry Ritholtz notes in this fine rant, the CRA didn’t force mortgage companies to offer loans for no-money down, or to throw underwriting standards out the window, or to encourage mortgage brokers to aggressively seek out new markets. Nor did the CRA force the credit-rating agencies to slap high-grade ratings on subprime debt.”

    Go read the entire piece . . .


  46. warbler44 permalink
    October 8, 2008 7:05 pm


  47. beltark permalink
    October 26, 2008 8:02 pm


    I have several things in common with you but also have several views in direct conflict with your own.

    First off, as a former college pitcher, I think you are one of the finest competitors to play the game. I have also been a WoW player for three years though recently retired when my second child was born. I agree with you on gold farming etc. It has destroyed the economy of the game in some respects though I think Blizzard made some mistakes with prices of goods and the time it takes to gather gold in the game to advance your character. I was part of a guild that nearly cleared Sunwell and was first or second to kill all the bosses in Black Temple and other raiding instances. If you have not raided the high end 25 man content it is worth seeing. Though I still argue that Naxx was the best instance ever made. You will see it reincarnated in WOTLK if you haven’t already. My server was firetree though I canceled my account for now to spend more time with my kids!

    But on to the areas where we have a huge fundamental disagreement. I am a supporter of Barack Obama as you might guess. I am also employed in the finance arena and have both my CFA and MBA so I think I can speak with some knowledge on the areas you cited in your blog.

    Many have commented that you are just spewing vitriol and discussing areas where you have no knowledge. I think everyone has the right to their own opinion so I can’t call you out on that. What I will say is that blame can not be thrown at the feet of any one individual, party or corporation (or set of corporations if you choose Fannie and Freddie).

    A crisis of this magnitude (and this is a larger one than many of us could ever imagine) has many at fault. I will list those at fault (in my view) but in no particular order. I will also add a bit of personal commentary.

    1) Consumer – the American consumer has leveraged him or herself massively over the past few decades. While you can blame a company for writing mortgages that individuals can’t afford, you have to blame the individuals to some extent for not taking personal responsibility and doing the math themselves on what they can afford. As a Republican, you of all people should agree with that. Even as a democrat I think the consumer is partly at fault. And you can consider any homebuyer a consumer.

    2) Mortgage underwriters – (e.g. Countrywide) It is the mortgage underwriter who makes or receives the initial contact. It is the mortgage underwriter who collects the initial information on the person borrowing the money. It is the mortgage underwriter who can be aggressive or more consultative in assessing the loan and the candidate’s willingness or ability to pay. In the old days (100 yrs ago….), the local bank officer knew the person in the town applying for the loan and even knew the house he was buying. They shared friends and shared a history. In our society (inevitable), we got away from this and likely can never return. Too difficult. So underwriters share the blame.

    3) Investment Banks – Once Countrywide and other firms wrote the loans, they either A) kept the loans on their books (and they regret this as you recall Countrywide was one of the first firms to fall as it was eventually acquired by Bank of America very early in the crisis) or they sold them to investment banks to be packaged into CDOs etc. The investment banks bought all these crap loans and they packaged them into complex securities, put leverage on them and repackaged them again. This is a complex topic but many of these securities were then sold in tranches that appeared not very risky but in fact were junk all the way through. (see my next contributor to the crisis for more)

    4) Ratings agencies – the ratings agencies (Moody’s, S&P etc) gave these CDOs and other pooled vehicles ratings (e.g. AAA, A+ etc). As we learned later, the ratings agencies did not have a good grasp of the risks involved in the securities. They also received a fee for rating the packaged debt. (imagine if they gave it a low grade…would they get the business to rate that investment bank’s debt in the future? Surely you must understand conflicts of interest…. That is Exhibit A)

    5) Fixed income management firms – In the end someone had to buy these CDOs and unpackaged mortgage debt. Fixed income management firms were guilty in part because they provided the market for this.

    You the consumer get a loan you can’t afford from an underwriter, it is packaged by an investment bank and rated by a rating agency and sold to a fixed income firm. Voilah!! All co-conspirators in this mess.

    Now Freddie and Fannie are certainly guilty in all of this, and the Dems and Reps are guilty in letting FNM and FRE run to freely for sure. An earlier poster only cited the Democrat’s mistakes but I can assure you the right and far right is just as guilty in letting the two firms run free. Both sides were successfully lobbied by these firms. Don’t kid yourself in thinking one party is innocent. It only makes you look like you don’t know what you are talking about.

    So that is my take on this.

    It looks like Barack Obama will win this election. I think this is a wonderful event for our nation on many many levels.

    While I do not think that Obama (or McCain) has the knowledge to deal with this economic mess, I have much more confidence in Obama’s economic team than I do in McCain’s economic team. I think Summers, Rubin, Volcker, Goolsbee, Reich, and Tyson all have the experience and knowledge to lead us through this crisis. So while neither candidate is capable in this area, the key is having the judgement to put the right people into place. On that point, Obama wins while McCain’s team has not proved itself. I think McCain even mentioned Meg Whitman for Treasury Secretary or Fed Chairman at one point. I do not think that would be a good idea. She did a decent job leading Ebay, but Ebay is not the U.S. Treasury.

    I think when we decide on a candidate to vote for, we should really focus on judgement because it is good judgement that allows our candidates to choose the team around them. It is the team around them that ultimately shapes the policies and actions of an administration.

    On judgement I think Obama wins in a blowout. McCain’s selection of Palin shows a bit less judgement and bit more politics in my view. While I am not going to cite her as horribly unqualified to be President, I will say that sheis a surprising choice and her knowledge base must climb significantly (particularly on world affairs/events) for her to match Obama. She could not come close to matching Biden or McCain in that area. So I think any neo con or anyone who just feels that our foreign policy decisisions are important should really step back and think about having her on the ticket and what it might mean if she had to step in as Chairwoman and CEO of America.

    Best of luck with the rest of your baseball career and good luck in WoTLK.


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