76 Comments

1. RWE:

The really bad part is that if the Republicans had pushed harder to stop this insane practice then they would have been accused of being rich people out of touch with the plight of the poor and, of course, racists, and thus would have been savaged at the ballot box. And still would have been blamed when it all blew up, anyway.

Nov 17, 2008 - 5:10 pm 2. weSwinger:

Except today’s bankers and politicians don’t say “yes, we tried to expand the supply of affordable housing, and like Prospero create wealth out of nothing, and we are not sorry.” They point their little ivy league nincompoop fingers at some other ivy league nincompoops and claim innocence.

Nov 17, 2008 - 5:17 pm 3. sirius_sir:

As one Fed economist puts it, the assertion that CRA was needed to force banks to see profitable lending opportunities is “like saying you need the rooster to tell the sun to come up. It was going to happen anyway.”

Perhaps. But those community organizers at ACORN realized other opportunities in forcing the banks to comply with their wishes. Maybe it began as no more than a scam, but likely quite early on someone saw these “profitable lending opportunities” afforded not just access to money but as well an avenue to real power and influence.

We shouldn’t be surprised that one with street smarts could outsmart a Fed economist and a few bankers to boot, or that the author of this article could so early and so cogently put forth the argument that even now seems to elude so many, i.e. “There is no surer way to destabilize a neighborhood than for its new generation of home buyers to lack the means to pay their mortgages…” But one reading this piece now cannot believe that even the clear-eyed author of this piece could fully know what “extraordinarily high risk” meant. From such a little mischief not only did “lending opportunities” accrue but so did all the attendent risks until finally they destabalized not just a mere neighborhood or a country but the entire world’s economy.

But maybe it was going to happen anyway.

Nov 17, 2008 - 5:52 pm 4. Unsk:

RWE- To me the real story is that the Republicans, especially the RINO’s, wouldn’t stand up to the thugs. So the thugs took over. Now the thugs are in the driver’s seat.

Nov 17, 2008 - 6:11 pm 5. newscaper:

My wife’s aunt retired as some sort of VP form AmSouth bank (now part of Regions) about 10 years ago.

I ran into her son about a month ago and chatted about the economy. He said that his mother’s two cents was that in being forced to make loans that they *knew* were likely to default under the impact of CRA, that th eonly way they could try to make up those near certain losses was to make riskier loans [that they used to take on] in other areas that had a chance — on the upside– of being profitable enough to cover the losers. That worked ok — as long as things kept growing.

One good stumble, and they’re hemmhoraging at the high end as wellas the low.

Nov 17, 2008 - 6:27 pm 6. buddy larsen:

not everyone is bleeding tho, newscaper –shorts have been making out like –well, bandits, hammering down company after company, with no problems from no steenkin uptick rule (or in the naked case, no need to even to even borrow the stock they’re selling –some companies under attack found up to 130% of their float somewhow ‘existed’), for nearly two years now since the front elements of the bubble began popping. Famoius shorts like Soros, a heavy Lehman Bros investor, could happily lose every dime in Lehman while driving Lehman auction-rate securities funds to blow and blow til the bubble popped, then to quickly hop to the short side and make it all back times whatever, by shorting the damage wrought, by shorting ‘bear raid’ style any chosen company (replete with a rumor mill going full blast) down down down, ’til ordinary players had to begin to see the bear raids as a new ‘fundamental’ –causing these ordinary players to bail, thus driving short profits even higher, thus causing drops in volumes that let formerly dampened activities begin running volatility wild, which then chases more longs away and to this day furthers the dismal tide in ever fresher vicious cycles.

And that, as your aunt says, is the story, writ small in a local bank boardroom, writ large across global equity markets suddenly smaller by half and feeling suspended over a void.

Just remember, not all that disappeared dough disappeared –a lot of it is in brimful short accounts. Oh is there ever a book to be written –with a big chapter on the recent election.

Now the guy who kicked CRA into high gear back in 1995, well his wife is gonna be our new Secretary of State.

Nov 17, 2008 - 7:17 pm 7. Mike Sylwester:

Right now, as the financial crisis is developing in a frightening manner, the decisions that were made a decade and more ago seem to be inexplicably foolish. As the history is studied and discussed, however, the people who made and profited from those decisions eventually will have their opportunities to explain and defend those decisions. Then serious observers probably will have a more complicated and balanced understanding than they do now.

We will be reminded that many people had no hope of buying their homes. We will be reminded that this problem was accute among racial minorities. We will be reminded that because of the new lending practices many of those people became able to buy their homes and still own them now. We will be reminded that foreclosures have always happened, even when the previous lending practices prevailed. In brief, we will be reminded that there were problems during the previous lending practices and that there have been successes during the new lending practices.

The people who oppose our war in Iraq perceive the decisions that put us there to be inexplicably foolish, based on utopian ideology and personal greed. But at the time when those decisions, most people thought they were the best decisions in those circumstances and that their decisions were based on a careful and deliberate evaluation of the real considerations they perceived at that time.

In hindsight, we see some developments more clearly, but we forget many old considerations.

Nov 17, 2008 - 7:35 pm 8. Brock:

As a mental exercise think this: what article you are reading today will you look back on in a decade and say “Wow! What a bummer?”

I suspect it will have something to do with my IRA. Verily though I will not know until after the fact which of the many articles I have read is the fateful one. It’s a random walk when facing forwards.

Nov 17, 2008 - 7:37 pm 9. trangbang68:

Buddy, Glad to hear your fine tuned mind postulating on the current crisis. Where I come from a short is a street term for your car which shortens the distance between point A and point B. I guess the current finagling is shortening the distance between struggling for air and going down for the last time. My country tis of thee, sweet land of chicanery.

Nov 17, 2008 - 7:43 pm 10. trangbang68:

Wretchard, Who is Robbie Williams? Nice version, but give me the guy from Hoboken.

Nov 17, 2008 - 7:45 pm 11. buddy larsen:

yeh, when the Hoboken guy sang it, we knew the words was true, becuz we already had teh dope on it –and it made the song ten times stronger. Trang, in low moments the land of the fee and the home of the crave seems to mock freedom & liberty as a Pandora’s boxful of Troubles –of which “Hope” was the last to escape and fly free.

Nov 17, 2008 - 8:06 pm 12. Wadeusaf:

Hope is the thing with feathers…,isn’t it

A beautiful bird to spread its wings and fly or was hope that wretched thing without feathers? A bug to be zapped or bagged for display in some tight row-house community of other dead bugs?

The CRE was once used to keep communities from deconstructing, as a brass ring to strive for not avoid. Along with enterprise zones it should have been a great way to stave off urban decay. Until the idea itself became policy instead of a policy tool.

Nov 17, 2008 - 8:35 pm 13. buddy larsen:

i dunno –i think the idea is, we need to experience the bad to recognize the good –but whatever old Greek who developed pandora’s box did indeed leave himself open to mockeree, to a catcall from the audience, “Hey, if you hadn’t let them other Troubles loose, we wouldn’t NEED “Hope”.

Nov 17, 2008 - 8:59 pm 14. Marcus Aurelius:

I have a number of old National Review magazines around the house & up north. I usually like to read Florence King & John Derbyshire’s non-pol writing. However, I do go back & read all the other ones. There is one written by Ramesh Ponnuru back in ‘03 talking about the GOP presidential candidate for this last cycle. Early on he goes on to scratch senators from consideration.

I’ll be up North for the next two weekends, I’ll see if I can find issues from the 2000 election to read on the deer stand.

Nov 17, 2008 - 9:29 pm 15. Aristide:

Here’s a good breakdown of The Cloward-Piven Strategy and the birth of ACORN. A originally was for Arkansas.

The Cloward-Piven Strategy of Orchestrated Crisis

In an earlier post, I noted the liberal record of unmitigated legislative disasters, the latest of which is now being played out in the financial markets before our eyes. Before the 1994 Republican takeover, Democrats had sixty years of virtually unbroken power in Congress – with substantial majorities most of the time. Can a group of smart people, studying issue after issue for years on end, with virtually unlimited resources at their command, not come up with a single policy that works? Why are they chronically incapable?

Why?

One of two things must be true. Either the Democrats are unfathomable idiots, who ignorantly pursue ever more destructive policies despite decades of contrary evidence, or they understand the consequences of their actions and relentlessly carry on anyway because they somehow benefit.

I submit to you they understand the consequences. For many it is simply a practical matter of eliciting votes from a targeted constituency at taxpayer expense; we lose a little, they gain a lot, and the politician keeps his job. But for others, the goal is more malevolent – the failure is deliberate. Don’t laugh. This method not only has its proponents, it has a name: the Cloward-Piven Strategy. It describes their agenda, tactics, and long-term strategy.

The Strategy was first elucidated in the May 2, 1966 issue of The Nation magazine by a pair of radical socialist Columbia University professors, Richard Andrew Cloward and Frances Fox Piven. David Horowitz summarizes it as:

The strategy of forcing political change through orchestrated crisis. The “Cloward-Piven Strategy” seeks to hasten the fall of capitalism by overloading the government bureaucracy with a flood of impossible demands, thus pushing society into crisis and economic collapse.

Cloward and Piven were inspired by radical organizer [and Hillary Clinton mentor] Saul Alinsky:

ACORN, the new tip of the Cloward-Piven spear

In 1970, one of George Wiley’s protégés, Wade Rathke — like Bill Ayers, a member of the radical Students for a Democratic Society (SDS) — was sent to found the Arkansas Community Organizations for Reform Now. While NWRO had made a good start, it alone couldn’t accomplish the Cloward-Piven goals. Rathke’s group broadened the offensive to include a wide array of low income “rights.” Shortly thereafter they changed “Arkansas” to “Association of” and ACORN went nationwide.

Today ACORN is involved in a wide array of activities, including housing, voting rights, illegal immigration and other issues. According to ACORN’s website: “ACORN is the nation’s largest grassroots community organization of low-and moderate-income people with over 400,000 member families organized into more than 1,200 neighborhood chapters in 110 cities across the country,” It is perhaps the largest radical group in the U.S. and has been cited for widespread criminal activity on many fronts.

Barack Obama and the Strategy of Manufactured Crisis

Nov 17, 2008 - 9:42 pm 16. programmer:

Hope, you say? Hope! What is hope? Well laddy, I’ll be telling ye what hope is! Hope is a young guy quitting Harvard and taking his version of BASIC around until Altair bought it, then keep on marketing until other platforms bought it, which eventually led to Vista!

Hope is two guys working in a garage and finally hitting big when they sold their first 50 computers to a Byte shop. This, of course, led to the iPhone, etc.

Hope is: In 1945, Sam and Helen Walton moved to Newport, Arkansas to breathe life into an old Ben Franklin store. It had been doing poorly and was in need of new ownership. Sam Walton was just the man for the job.

Hope is: Out in America right now, right this darn minute, somebody, or probably a whole lot of somebodies) is/are working on ideas that are the next big ideas. The next wave. The next waves. Robots! Nanobots! Cold fusion! Longevity! Teleportation! Safe desktop nuclear reactors. Just like the desktop computer boom, just like the dot com boom, like the oil boom, the railroad boom, like…, like…, well you get the idea. Stop all this gloom and doom. The present is a infinitely small edge of now sweeping through time, but it is remarkably solid. We cannot reach back through it and change the past, only observe it dimly receding into dust, We cannot break throught the present to see the future, only make guesses guided by what we observe in the vanishing past and learn in the now. So brace yourselves, place your bets, and get ready for what’s coming. President elect Obama is right about one thing, for sure. Change is coming. YeeeeeeeHawwwwwww! What a ride!

Nov 17, 2008 - 9:51 pm 17. Dave:

Buddy, when did naked shorting being legal?

That is how old Joe Kennedy took voting control of firms when he headed the NYSE.

Having thus re-invested his bootlegging profits, he did help to make his practices illegal in the future. When di that go away?

Nov 17, 2008 - 10:18 pm 18. buddy larsen:

Dave, it’s NOT legal –but apparently the Winken/Nodden Process has produced a technical gray area where if, say, your agent had taken the responsibility of delivering the stock, but had never actually borrowed specific registration numbers via recorded transaction, but had gotten an assurance from some other broker, fiduciary, licensed dealer that the stock could have been located and produced, then your actual risk –in currently practice –is that in the highly unlikely event the overloaded and underpowered SEC ever comes around asking questions, and then dislikes your answers strongly enough, you may get a mild reprimand of some sort.

Just call it the usual slop that always envelopes the untenable (”Calling all units –this is an all points bulletin –immediately seal all public areas –immediate roadblocks at all intersections in tri-state area –report to HQ every five minutes –suspected jaywalker allegedly on the loose!”).

Programmer, that was inspirational –no sh*t –it really was.

Nov 17, 2008 - 11:08 pm 19. Dave:

Thaqnks Buddy. I gotta hit the sack now. Work, as usual mannana.

Go back to previous post about Ford and GM and check out my #56 on tax system.

See if I am making sense. Tried to cover a lot in somewhat short order.

Agree with you: Programmer nailed the rhinoceros with that one.

Nov 17, 2008 - 11:15 pm 20. buddy larsen:

Say what you will of Vladimir Putin, but among his manifold faults would most manifestly not be a caving to any “Cloward-Piven Strategy”.

In fact the strategy would quickly evolve to

“Hey, Cloward, you think we’ll ever get out?”

“Not ’til we finish shoveling this snow off the Trans Siberian Railway, Piven.”

Nov 17, 2008 - 11:27 pm 21. ledger:

Hope is Obama leaving Office in handcuffs exclaiming “I am not a fraud!”

Nov 18, 2008 - 2:19 am 22. Steve Skubinna:

I like your optimism, programmer, but cant buy into it. Today hope is waiting for Obama to unleash the magical rainbow unicorns to fly down and crap free health care on everyone, and a nice hosue and a dignified job that pays well and a free college degree and naything else that tickles out fancy.

What’s thia inspiration and hard work crap you’re peddling? Why bust a gut making something people want if you’ll be demonized by your own government and penalized for working hard?

Today’s hope was minted in socialist Europe, based on the more brutal version sold in the USSR, that nobody has to do anything, and those who do try are kulaks and wreckers. So come up with your great idea, start marketing it, and then find you’ve inadvertently created the next new “right” everybody is entitled to have. Hand over the goodies, sucker.

Nov 18, 2008 - 2:44 am 23. cellec:

Sure, banks are businesses and realize profits if well-run, but in many important ways banks are a little like governments.

That is: as a government has no money but that which it confiscates from citizens via taxes, so a bank has no capital exept that loaned to it by depositors/investors. Depositors who are trusting the bank to do something with the money at least as intelligent or productive as they would do with it themselves.

I’m nothing like an economist, but isn’t it fair to say the current meltdown we’re experiencing is the result of many people being very, very generous with OTHER PEOPLE’S MONEY? Money they didn’t earn themselves.

P.S. Sorry about the “shout caps”, haven’t found a way to bold or italicise with this interface.

Nov 18, 2008 - 6:42 am 24. Peter Boston:

The natural backstop to any individual bank’s deliberately foolish lending was the risk to that bank’s capital. For so long as each foolish loan remained on that bank’s books it was a risk to that bank’s capital. A defaulted loan is a hit on capital. Too many hits and that bank would be declared insolvent and taken over by FDIC. It’s directors and officers would lose their jobs, and the shareholders would know exactly who was responsible. Pure self-interest set a cap on the number and amount of risky loans.

The backstop was removed when Fannie/Freddie lowered their standards. Banks that would have kept the amount of bad loans in check no longer had any reason to do so. They made as much as they could in fees and points and then shuffled the bad loans off to Fannie/Freddie, and more importantly off the bank’s books.

Politicians (Democrats mostly) forced the issue by ordering Fannie/Freddie to open the floodgates. Execs at Fannie/Freddie were happy to comply because Wall Street was bundling their paper and selling it to eager buyers who did not understand exactly what were they butying but did so anyway because it was all rated AAA.

Washington insiders like Gorelick and Raines, and more than a few others now on Obama’s staff, made personal millions from their positions in Fannie/Freddie, even as internal auditors were raising the alarm.

The hand of government sanctioned rent-seekers are all over this mess.

Nov 18, 2008 - 6:52 am 25. RWE:

The other part of the meltdown equation not included in the excellent City article is that people began to use those same financial instruments to buy not one but two three or seven houses for investment purposes. And not real investments, either; they just wanted to flip them in a couple of years are less.

Here in Florida recent newspaper articles described the new face of bankruptcy: an elderly lady with FIVE mortgages who can’t pay them any more, a firefighter who bought SEVEN houses and is in great financial difficulty for some strange reason. On TV the other day they explained that lending rules have been tightened dramatically: you can only have FOUR mortgages now. Geeze! If FOUR represents a dramatic new restriction, what was it before?

The head of ACORN recently said, “How wuz we to know that people would use these lending innovations to make money? Ain’t our fault it all crashed!”

And, of course, the banks and investment companies started figuring out to make money on these loans that were designed to make sure they could not make any. And now, Congress is working frantically to make sure that the insane lending practices are not blamed but the unregulated Derivative market is. Only problem is, it was not the Derivative market that started the meltdown, and the Derivative market has remained far more liquid than the “regulated” portion of the market.

Nov 18, 2008 - 6:58 am 26. Aristide:

Washington insiders like Gorelick and Raines, and more than a few others now on Obama’s staff, made personal millions from their positions in Fannie/Freddie, even as internal auditors were raising the alarm.

What a concept! Destroy America and get rich at the same time!

Nov 18, 2008 - 7:02 am 27. JGreer:

The pipe-dream theory is that in an ever appreciating market we can give low income folks a chance to get in on the gravy train and then refinance a few years later based on appreciation equity. Of course thats not how markets work nor how credit risk individuals behave.

The icing however is that it wasn’t low income people who have been the big losers in this environment. There is no glut of vacant starter homes in Miami. There is a glut of $500k condos.

Nov 18, 2008 - 7:10 am 28. slade:

The icing however is that it wasn’t low income people who have been the big losers in this environment. – JGreer

I don’t make too many “me too” posts but that comment bears repeating.

Nothing to add.

Nov 18, 2008 - 7:15 am 29. Clioman:

So, it all boiled down to a ‘hard’ choice. On the one hand, mortgage bankers risked being called racists if they held fast to prudence in the face of ACORN’s threats–rascism having been declared the worst imaginable crime in a liberal society. And on the other hand, those bankers could become stinking rich by making risky loans because they could pretend that those loans were backed by federal guarantees–and surely there is no better reward for being ’socially responsible’ than making a lot of money. Now here we are….

If there is such a thing as social engineering, then this must be its Tacoma Narrows Bridge.

Nov 18, 2008 - 7:25 am 30. DanM:

Speaking of ideas.

Nov 18, 2008 - 7:53 am 31. DanM:

From link above – “Others strive to be objective, we don’t,” said Jennifer Palmieri, CAP’s vice president for communications.

Podesta likes to say, “we’re not a think tank, we’re an action tank,” said Dan Weiss, an environmental activist who joined CAP last year.

Nov 18, 2008 - 7:54 am 32. Derek:

Clioman: I would hope that someone learns something here. A bridge collapsing usually produces some humility.

Not with this crowd though.

Derek

Nov 18, 2008 - 7:58 am 33. slade:

The center’s future was far from certain in 2003, when wealthy donors such as Soros and film producer Stephen Bing gave $10 million or more to fill what they believed was an intellectual void in the Democratic Party and create a vehicle to produce an agenda for the party’s eventual return to power.

A lascivious link on CAP financier Stephen Bing to start your day.

Nov 18, 2008 - 8:09 am 34. RWE:

The icing however is that it wasn’t low income people who have been the big losers in this environment. – JGreer

Slade: I don’t make too many “me too” posts but that comment bears repeating.

I second Slade’s second, but y’all take note: It is the plight of the low income people who really were honestly trying to buy a house to live in that is being used
to justify not only the disaterous initial policy but also the necessity for individual bailouts.

Just as the vanishingly small number of abortions required to protect “the health of the mother” are used to justify the 99% that are the result of being too lazy to use prevantative measures.

The Left’s secret motto is “If one specific end justifies the means then that justifies the means for all of them.”

Nov 18, 2008 - 8:19 am 35. james wilson:

As Dirksen said fifty years ago, a billion here and a billion there, pretty soon we’re talking about real money.
Now a trillion dollars just isn’t what it use to be.
But at least I always knew what it was. What comes after a trillion?

Nov 18, 2008 - 9:00 am 36. RWE:

James Wilson: Did you ever hear the story about the little girl who came home from elementary school one day and said to her parents, “We are getting two Brazilian exchange students in our class.”

Her Mom said, “That should be fun!”

Her Dad said “That should be interesting!”

And the little girl replied “Fun? Interesting? We don’t have anywhere to put them! Do you realize how large a number two brazilian is?”

Nov 18, 2008 - 9:34 am 37. Dave:

The adult way out of difficulties for those who thought they were going to get rich yesterday by flipping properties is this:

Meet lender at the title company:
Execute “Deed In Lieu Of Foreclosure”
Hand Lender Keys to House(s).

Grow up people. You gambled and lost. Now rid yourself of the debts you aquired in your failed efforts.

As to the lender: With that Deed in hand, the bank no longer has a “non-performing asset”
that has to be balanced with real cash.
They can now crash sale the properties for
pennies on the dollar. They will take enormous paper losses BUT have more than adequate liquidity to stay in business and that is THE essential element of banking.

The neighbors will see the nominal value of their homes decline to those fire sale prices
but as soon as that excess inventory is occupied, they will not be “upside down” in their mortages.

Unfortunately, too many people—borrowers and lenders alike—-lack the maturity to
face up to the fact that they just put their money into a fancy version of Ye Olde One-Armed Bandit. Next time, play Keno. You have better odds.

Nov 18, 2008 - 10:13 am 38. Dave:

BTW: Some people should hire Kenny Rogers as their financial advisor.

“You’ve got to know when to hold ‘em
Know when to fold ‘em,
Know when to walk away,
Know when to run,
Never count your money sitting at the table.
There’ll be time enough for counting,
When the dealing’s done.”

Nov 18, 2008 - 10:32 am 39. Agoraphobic Plumber:

“What comes after a trillion?”

Quadrillion. And at the present rate, we’re not going to be able to hold the national debt in a 64-bit decimal number by the time I retire. But hey, in another 10 or 15 years we’ll probably all have 128-bit computers on our wrists, so that’ll be okay.

Nov 18, 2008 - 10:41 am 40. Aristide:

One man’s glimpse into America Future.

* America, The First “Undeveloped” Country
* Revolution, Riots, Rebellion, Marched
* Holidays 2012: Food More Important Than Gifts

Nov 18, 2008 - 10:44 am 41. trangbang68:

JGreer, that’s not how markets work, true dat, but the big problem is its not how human nature works. The poor are often poor for a reason, a lack of ambition, sloth, stupidity, addictions, bad character,etc. Putting a dysfunctional person in a place they are nearly guaranteed to fail is a fool’s bet. It’s like betting the Kansas City Royals or the Washington Nationals will play in the 2009 World Series. Great odds, but little chance of winning the bet.
Liberalism at its essence is delusional. It believes that mankind is essentially good and only shackled by environment. If government intervenes it will lift people up out of who they are. Like all secular shamanism it is
doomed to failure. Jesus Christ while sympathetic and compassionate toward the lowly and downtrodden also stated, “the poor you always have with you”. That is because poverty is often the consequences of human folly.

Nov 18, 2008 - 10:47 am 42. slade:

I heard the rumor but it now appears that Goldman was actively engaged in naked short selling to cover its long positions in MBS’s.

Investors in the $591 billion high- yield, high-risk loan market are accusing Goldman Sachs Group Inc. of naked short selling to profit from record price declines.

At least two fund managers complained verbally to officials of the Loan Syndications and Trading Association, saying they believe Goldman helped drive down prices by using the technique, according to people with knowledge of the objections. New York- based Goldman is acting against its clients by trying to profit at their expense, the investors said.

According to Bloomberg: There’s no rule preventing naked short selling of loans….

The unions were watching out for labor. Detroit managers were watching out for themselves. The investment banks were watching out for themselves. Of the three, the unions were the most honest.

A hat trick still working its way through the markets. Maybe another 1000 more points of pain.

Nov 18, 2008 - 10:49 am 43. trangbang68:

What comes after a trillion? A day’s wage buying a loaf of bread, a wheelbarrow of Deutchmarks buying a sausage. Then what comes? A demogogue on a white horse promising to make the trains run on time.
I’m going to buy me some chickens and plant some food.

When Black Friday comes
I’ll stand down by the door
And catch the grey men when they
Dive from the fourteenth floor
When Black Friday comes
I’ll collect everything I’m owed
And before my friends find out
I’ll be on the road….

-Donald Fagen and Walter Becker

Nov 18, 2008 - 10:53 am 44. Eggplant:

programmer said:

“…place your bets, and get ready for what’s coming. President elect Obama is right about one thing, for sure. Change is coming. YeeeeeeeHawwwwwww! What a ride!”

After reading this I was immediately reminded of Slim Pickens riding an H-bomb.

Nov 18, 2008 - 11:45 am 45. Voltimand:

As I take Wretchard’s moral, it is this: the astounding coercive power latent in the charge that “you are a person guilty of supporting a system that distributes wealth unequally.” Has anyone ever noticed that there is no repertoire of philosophical/rhetorical arguments by which Americans can make and back up the statement that “inequality is good, inequality is what makes the world go around, inequality is inevitable and therefore the notion that I am ‘guilty’ of favoring ‘inequality’ is like charging me with being guilty of favoring a system that creates wealth for everyone but never creates equal wealth for everyone.”

We can barely think that idea without shuddering at the viciousness we would have to endure if we said it out loud. Why, it’s almost as bad as being accused of being a “racist.” Who has a defense against such a charge except to deny the charge, a denial that tells the accuser that s/he has got the accused exactly where s/he wants him: skewered on his own guilty conscience.

In taking either charges seriously one has already given away the store.

My respone to such charges is to go immediately on the offensive, and start being offensive. The first move I make is to trap the accuser into telling me that he thinks he possesses the prerogative of accusing me of anything at all out of the whole wide world because he is morally superior to me. Get him to admit that he’s playing “I’m more moral than you,” and you can start going to work.

You must be ruthless, and above all, you must not to give a single flying expletive deleted whether someone accuses you of XYZ. You go after the accuser’s own guilty conscience–because it is his own guilt that he is trying to scapegoat you with.

My point here is a simple one: the bankers were conned into pushing bad loans because they are at bottom crypto-liberals, which is the same as saying that they are crypto-moralists. So of course they’re vulnerable to the emotional leverage of such charges.

And so, underneath all this discussion is the acceptance without knowing it of the moralizing leverage of liberal manipulation. If you want to castrate these people, this is where you attack them. But you have to be willing to appear (what you are if you’re going to do this thingy), namely, a bastard.

Everybody likes to be liked, and that’s the problem.

Nov 18, 2008 - 12:28 pm 46. programmer:

Eggplant,

I think you got at least the essence of my attempt to hold back, if not downright turn back, the shades of gloom descending. Slim’s character was indeed headed for boom times AND a change of state.

Nov 18, 2008 - 12:37 pm 47. Eggplant:

Programmer said:

“Slim’s character was indeed headed for boom times AND a change of state.”

Having elected Obama as Messiah, I suspect several thousand Americans will undergo a Change of State in the not too distant future.

Relax and be calm! Boom Times are ahead!

Nov 18, 2008 - 12:50 pm 48. tomw:

37. Dave
What about the rest of us? We, well some, didn’t make any flaky, over the limit loans, yet we have our home values drop like rocks. The neigborhoods with piles of foreclosures (on FOXN was a Denver suburb, I think, that looked like every other house had ‘for sale’ in the yard) have their property values tank. Cleveland, not the best of cities to invest in property, has more homes empty than occupied( I lied, I just know it was a LOT), and the empties are being gutted of copper, aluminum, and anything else of value. Plumbing pulled off the wall, and the water left to flood the basement, putting out the pilot light, but not the gas flow. Boom and fires.
Those that kept up their payments are being hit on property values, and, guess what? They will be the ones paying the taxes that bail out their irresponsible neighbors, and the banks that made the loans.
Can I declare myself a bank and get my bailout? How about my Fidelity Magellan that is now 1/2 of what it was 3 months ago? Where is my bailout?
How schizophrenic is the electorate that just returned to Congress, and to the White House the party that created this miasma.
oy.
tom

Nov 18, 2008 - 1:08 pm 49. tomw:

This is truly depressing. Sorry for the dirge.
tom

Nov 18, 2008 - 1:09 pm 50. Charles:

If you ever hear someone say there are no absolute truths…or the only absolute truth is that there are no absolutes…kindly break their jaw.

But if you can’t bring yourself to break the fools jaw then correct his logical fallacy and mention to him that that logical absurdity in the hands of judges means that the law is whatever they say it is. that logical absurdity in the hands of rulers means they can do anything. That logical absurdity leads to counterfeit marriages, counterfeit citizenship, counterfeit money and counterfeit mortgages.

Nov 18, 2008 - 4:01 pm 51. Aristide:

Happy Days are here again!

“… we believe the economy will stabilize in the first quarter of 2009, grow at a 2% annual rate in Q2 and then expand at a 3% rate in the second half of next year”

“In October alone, Banks increased commercial and industrial lending by 4.2%, real estate loans by 3.4% and consumer loans by 2%”

— Brian Wesbury & Robert Stein, Forbes.com, November 18, 2008

The Fix worked or… was The Fix in?

Nov 18, 2008 - 5:19 pm 52. bogie wheel:

I work for a mutual bank, pretty small compared to the giants, but big for a mutual bank. We have always had a conservative lending philosophy and, since we didn’t follow the lemmings’ rush off the sub-prime cliff, we’re in good financial shape.

What we do, instead of lending to openly bad risks and either hoping for the best or selling the risk to someone else, is a community program of credit restoration with low- and moderate-income folks who want to become homeowners. Bank personnel work with an aspiring homeowner over the course of what is usu. 1 – 2 years, teaching that person financial know-how and discipline: budgeting, building savings, paying bills on time, avoiding overspending, improving their credit score, paying off debt, learning about the homebuying process.

Over the course of those 1 – 2 years, the aspiring homeowner saves X amount of money (usu. $1000 – 2500) through consistent monthly set-asides. If at the end of those 1 – 2 years, the applicant has been successful in improving his/her credit score and has shown a learning curve in financial discipline and knowledge, my bank then matches $2 for every $1 that person has set aside. The total sum then becomes the downpayment on a house.

(Fortunately we are in Pittsburgh, where housing prices have remained sane, and $2-4K can actually serve as a downpayment on a modest house.)

Anyhoo, the bank continues to work with the aspiring homeowner throughout the purchase process and provides networking with others who have gone through the program in years past and are now successful homeowners. The post-purchase phase usu. lasts another year, and the networking and information resources remain available indefinitely to homeowners who have gone through our program.

We have, over the years, helped more than 1,500 people become homeowners who almost assuredly would never have done so, without the intensive counseling and focus of the program.

It’s a labor-intensive program for us, not a big moneymaker, but it’s important to us in our role as a long-time community bank. And the program works because it addresses the heart of the problem of chronic underclassness among people who otherwise are good workers: financial ignorance and poor financial decisions and habits.

“Put a poor person into a home and they’ll be on the road to wealth” has been the simplistic philosophy of the CRA zealots and their fellow travelers. Um, no. But if you can teach a poor person financial discipline, how to make smarter choices, and how and where to find resources available to them, and THEN help them get into that home after a lot of work and patience on their part, then you have significantly improved their chances of keeping that home.

As with weight loss, everybody wants a magic bullet for wealth-building. But there is no magic bullet. It’s a lifestyle, a process, not a one-off event.

Hmmm. Maybe we can put Congress through our program …? They might learn some things about fiscal discipline!

Nov 18, 2008 - 6:24 pm 53. gdude:

voltimand – “inequality is good, inequality is what makes the world go around, inequality is inevitable and therefore the notion that I am ‘guilty’ of favoring ‘inequality’ is like charging me with being guilty of favoring a system that creates wealth for everyone but never creates equal wealth for everyone.” — Where is that quote from? It exactly states the necessary fundamental condition for all economic activity, like pressure and temperature variances causing weather.

Inre: the markets, this is the first time I’ve heard someone talk about what’s REALLY going to be required — getting derivatives out of the banks (not that I think the mechanism should be the gov’t buying them!):
Crisis Won’t Be Over Until We Tear Up Credit Default Swaps

And, (in a real life playing out of that great scene in Apocalypse Now when Martin Sheen grabs the scared soldier in the trench by the bridge that is rebuilt by the U.S. every day and the V.C. blow up every night, and asks, “Who’s in charge here, Soldier?!”, to which the shocked reply is, “Ain’t you!?!”) in case you haven’t read Michael Lewis’ explanation of how clueless even the people at the top have been:

The End of Wall Streets Boom?

Nov 18, 2008 - 11:08 pm 54. davod:

The bad decisions being made years ago are being repeated today. Money is set aside in the bailout package for more of the same loans to people who do not qualify.

Nov 19, 2008 - 2:19 am 55. slade:

Boghie – your bank is right on the money even though I hail from a time and a place when nobody needed to teach the fundamentals of what used to be called common sense. My father who is 83 cashed out in October and told me he is gradually transferring his money into a locally owned bank. He doesn’t need to listen to Sheila Baer or Hank Paulson to know which way the wind is blowing. The family credit card is frozen once or twice a year because the bank has lists of questionable companies and various attributes such as location. They call in and get the transaction confirmed. I am disgusted by the ignorance of some Americans and by the entire Congressional and Wall Street corruption and that is all it is no matter how much Sheila Baer gets on TV and babbles about the details of the “mortgage recovery” program.

Nov 19, 2008 - 3:21 am 56. slade:

Footnote: I don’t have serious issues with Sheila Baer – she gives the impression of thorough and professional competence – can’t help but wonder how long that would last if appointed to replace Paulson, but I am disgusted with the use of giddy financial techno-babble as a smokescreen to obscure the more primal failures of the human element. Got greed? I have a new synthetic pill – it’s called a derivative.

“The Fix” – one can’t help but wonder if Detroit via the unions – or vice versa – was the ultimate target. Given Goldman shorting its own clients, “these guys” are capable of anything, even long-term planning. I doubt the same can be said of Democrats – or Republicans for that matter.

Nov 19, 2008 - 6:03 am 57. buddy larsen:

Expect CAP and the like to develop scome new doctrinal justifications. There’s nothing new under the sun, but fresh tuned-to-the-now restatements always sharpen the edges. Here’s one such edge, sharpened.

Nov 19, 2008 - 6:30 am 58. slade:

RE common sense versus the Technical Fix, that is a new dichotomy. There used to be room for both. Enter Sarah Palin from stage north. Common sense apparently not as popular as it used to be.

Nov 19, 2008 - 6:32 am 59. tomw:

52. bogie wheel:

Your post is what the “community activists” should have been doing. Better to teach a man to fish …
They didn’t. They depended on someone else to handle their ‘victimhood’, though the final results were just more victims. They in simple terms did not and have not to this day, taken responsibility for their own well being. They are treated like low caliber children, always needing someone to ‘help’ them. Help them tie their shoes, to pick out the shirt or skirt to wear today, help them make their sandwich for lunch, heck to remind them to eat. Okay, off the end there, but, come on. Is there really a chunk of the populace that needs such assistance – for the rest of their lives?
Given the results of November 4, there is no excuse today for any person of any melanin tint to claim victimhood. At all. As they say, if He can do it, then anyone can do it. See: cave men and some insurance company

More meh. with cowbell.
tom

Nov 19, 2008 - 6:52 am 60. programmer:

bogie wheel and tomw,

My take from bw’s comments are in line with tomw. This is community activism at it’s finest. This is what conservatives (Republicans??) should be doing. We have ceded the guerilla war to the liberals without firing a shot. One of the issues of the last election (coronation?) that haunts me is the tone deaf stance of the conservative purist pundits. Over and over again, they have criticized and ridiculed McCain/Palin. If their principles are so darn important, why aren’t they setting up classes and seminars to teach these principles. IMHO, bw’s approach quietly and competently addresses the issues of teaching sound conservative financial principles to those who need it. This is not just ideology that is being preached. These are skill sets that work. As Slade says, common sense seems to be lacking. My view, is let’s get down in the trenches and start teaching common sense courses to those who need them. Don’t give the street to the Left. Teach the Right Way (hmmm…., I can’t believe I just wrote that).

Nov 19, 2008 - 7:17 am 61. buddy larsen:

@ voltimand (#45) –that IS a real problem –the left’s slogans will always be better than the right’s. Ideas that exist only in their words will have good words, as the words are what has created them in the first place. The right enters the comms field of from the opposite direction –the ideas are empirical and words must be found to approximate the observed human natures. We need really wide bumpers for our bumperstickers, or really small fonts. The former don’t exist and the latter loses readability. we could plaster the bumperstickers front-to-rear, down the side of the vehicle –but that would not be the classic form and would thus foist the notion that the vehicle owner might be “not mainstream” –which notion of course colors immediately the message in the text of the bumper (or in this case the vehicle body) sticker, most likely negating if not downright subverting its intent.

But back to comment #45, try centering arguments loosely around “upward mobility” –the west’s and particularly ours here in America –the history of it, what it has done, what would likely follow its breach.

The concept’s multifacets reflect every single meme and submeme of the left’s dialectic-materialist intellectual firmament; there’s hardly a complaint that it hasn’t ameliorated and can’t solve (except for the pre-working-life poverty of the young, of course –that cohort so mendaciously skeward of so much of the left’s static analysis), and having as it does a living history festooned with universally-known statistical truths, it is something ‘of the right’ that in its rare and value-laden offering to each new generation (of the non-left-contaminated that is), it competes imaginatively with a Utopia that, while much less demanding of individual effort, lacks the cachet of ever having actually existed, lacks any likelihood that it ever will, and lacks the love of the ordinary that would separate it from idolatry.

So, upward mobility’s ideal is also its normative, creating a very invigorating truth that standing all alone can banish pretty much everything the left has got –save for perhaps the sneering mockery bubbling up from bottom-of-the-barrel nihilism (for which spiritual choice of the latter of Hamlet’s Two Options there need be no rejoinder).

Nov 19, 2008 - 8:07 am 62. programmer:

Buddy preachs:

We [the right] need really wide bumpers for our bumperstickers, or really small fonts.

…it is something ‘of the right’ that in its rare and value-laden offering to each new generation (of the non-left-contaminated that is), it competes imaginatively with a Utopia that …lacks the love of the ordinary…

programmer shouts from the Amen corner:

Amen brother, Amen. All I want for Christmas is my wife to make a sampler with those two phrases embroidered on them to hang on my office wall. The love of the ordinary. No one from the left has ever come home from war and knelt on the ground of a farm, took the ordinary soil of the field in their hands and cried for the love of home and simple things. Buddy, you have made my day.

Nov 19, 2008 - 8:32 am 63. buddy larsen:

@ tomw #58 –maybe that’s why the dems went so berserker on GWB on Katrina. Poking those cameras into the NOLA 9th ward so utterly indicted 1.5 centuries of Dem ‘caring’ that there was nothing for it but to conjure a distracting faux-splosion. See the same all the time, and again on TV from DC yesterday, where with mechanical efficiency central-perps barney & chris went sashaying so chesty throughout the Paulsen auto-da-fe.

Sunshine can’t get past the mirrors. The more the light the better to point the finger. A Martian spy would report that DC is the place where looking at an Earthling makes it swell up and point its fingers.

Helps to be shameless –and if shameless & crooked too then it ain’t no trick at all.

Nov 19, 2008 - 9:01 am 64. buddy larsen:

programmer, that makes us even, you just made mine too –

Nov 19, 2008 - 9:04 am 65. Dave:

Programmer and Buddy:

Amen to both of you. The conspiracy we face is one that has a phobia about upward mobility.

Other places, this mentality has kept people deprived of material things. Here, it keeps people deprived of self-respect. That is worse.

And yes, I said conspiracy. Got any other word for it?

I imagine the Rattler Gator, if he is reading, has a few choice, if unprintable, comments about it all. After all, he has had to fight the bastards off. And has done right well at it.

Nov 19, 2008 - 10:29 am 66. Aristide:

The Rattle-Gator

an unselfish reptile

with absolute honesty
he warns you he’s right here
with purity of purpose
he will bite you, poison you, eat you

swampish love

rolling in the sun
digesting your body
or watching you run

— Jimi Doyle

Nov 19, 2008 - 11:02 am 67. trangbang68:

Here’s a rugged little song about the land for the new Okies of the new Depression. “Country Trash” by the wonderful Mr. Cash:

I got a crib full of corn, and a turnin’ plow
But the grounds to wet for the hopper now.
Got a cultivator and a double tree
A leather line for the HAW and gee
Let the thunder roll and the lighting flash
I’m doing alright for Country Trash

I’m saving up dimes for a rainy day
I got about a dollar laid away
The winds from the south and the fishings good
Got a pot belly stove and a CORD of wood
Mama turns the left-overs into hash
I’m doing alright for Country Trash

I got a MACKINAW and a hunting dog
A cap I ordered from the catalogue
A big tall tree that shades the yard
A big fat sow for the winters lard
Let the thunder roll and the lighting flash
I’m doing alright for
Country Trash

Well there’s not much new ground left to plow
And the crops need fertilizer now
My hands don’t earn me too much gold
For security when I grow old
But we’ll all be equal under the grass
And God’s got a heaven for
Country Trash
God’s got a heaven for
Country Trash
I’ll be doing alright for
Country Trash

Nov 19, 2008 - 2:35 pm 68. Steynian 286 « Free Canuckistan!:

[...] THE TRILLION Dollar Men: “An eight year old article from City Journal describes how activist and community [...]

Nov 19, 2008 - 3:12 pm 69. Bob Murphy:

Country Trash-lovely stuff.

The rhythm of the verse and the general tone reminds me of “A Country Boy Will Survive”.

And here I sit in a tin shack 800 yards from my front gate with a garden full of vegies, 3 dams full of water, lots of ammo and a paddock full of ‘roos ‘n rabbits (aka underground chicken).

Things could be worse.

Nov 19, 2008 - 8:11 pm 70. buddy larsen:

Cash wrote the wisest love song ever, with the perfect line “I fell in to a burning ring of fire”. No wonder he and Miss June Carter stayed together all their lives –a burning ring of fire can’t spare much sentiment to stumble over, and must sear off everything but the bare having and being the invited witness.

Murphy, y’all eat them ‘roos?

Nov 19, 2008 - 10:13 pm 71. Dave:

What I want to know about Bob is, how does he manage to cope with the language barrier in Australia.

I remember being drafted to play interpreter for some Aussie Warrant Officers in DaNang.

Evening started Okay. Then atterspottergrog
stalkstrine. Left me telling an elderly Vietnamese gentleman that “while I can understand you, Uncle, I cannot understand what my fellow white men are saying”.

In return, I got Inscrutable Oriental Stare #3. Which means “who you think you BS-ing, Long Nose?” “Twas one of lifes embarassing moments.

Nov 19, 2008 - 11:47 pm 72. Dave:

BTW, I’ll bet neither Bob nor Buddy knows this:

The first Sheriff of San Francisco, and founder of Oakland, was a Texas Ranger.

Jack Hays by name. Had the first pair of Colts ever seen in the Republic of Texas. Courtesy of the Texas Navy he equipped his Ranger Company with the 9-inch Texas Pattersons. His subordinate, Samuel Walker designed the Walker Colt which saved Colt from bankruptcy.

Learn something every day, eh?

Nov 19, 2008 - 11:57 pm 73. buddy larsen:

You do if you keep the eyezandearz open –so them boys spoke Strine, eh? –especially after a spot of grog? I heard that women like them Strines because they know their business Down Under. Anyhoo the southeast corner of my little piece of dry gulch heaven is in Hays County (i could open a winder and thow a rock onto it if i really reared back and let go) and i imagine that would be the same famous Texas Ranger and Comanche Fighter as he to whom you refer, tho i confess that previous to your comment i had knowed nothing of any Frisco adventure of his’n. Anyhoo i hear that position in Frisco is now held by Sheriff Willy “Ben” Dover.

Nov 20, 2008 - 2:17 am 74. Bob Murphy:

69. buddy larsen:
I haven’t ever shot a ‘roo, Buddy. I’m pretty much a vegetarian.
But it’s nice to know they are available if everything becomes unstuck I want protein.
I ate ‘roo in several restaurants a few years ago. Nice tasting meat. Not much fat.
I hit a fair few of them when I was driving road-trains years ago. You can’t swerve with those things or the rear trailer falls over.

Nov 21, 2008 - 5:09 am 75. Bob Murphy:

70. Dave:
I’m a journalist, Dave. I switched from the Webster’s to the Oxford Dictionary years ago and that took care of the spelling part of it.

And I drove trucks up north when I first got here and picked up some very funny idioms talking to people there. It took awhile longer to get the hang of their droll humour, rhyming slang, and stuff like that.

And they have very casual attitudes towards racism and stuff like that. Very few of the people I dealt with are racist to any serious degree but they deliberately say things like “That’s downright white of you” and it’s just as likely to be to an Indian as an Australian. “He’s a real white man” means he’s a top bloke but he could well be black.

In Guildford, the closest town where I live I’m “the local septic” meaning septic tank meaning Yank.

It just goes on and on. Cracks me up.

And from my truck driving days I picked up a lot of country idioms that are rarely used in the city and it really cracks people up to hear me using them with what they tell me is still a broad American accent.

Then I go back to SF and my sisters get annoyed because I unintentionally use Australian idioms. I’ve been here so long I can’t drop them like I used to be able to 20 years ago.

It’s probably just as well I’m a print journo and not a radio announcer with my accent.

English is a wonderful plaything and there are some wonderfully accomplished practitioners on BC.

Nov 21, 2008 - 5:19 am 76. Dave:

Thanks Bob.

Did I ever tell you about how I raised eyebrows by telling about how “we took out a single pole and did eight rod jobs on Cindy Owens then set up and worked over a hole for the next month or so.”

For those who nein sprickense oilpatch, all that means is that we used the most common form of well servicing unit to pull connecting rods and change pumps on eight wells located on the Cynthia Owens lease. After which, we did a longer-term project of major maintenance and production increase on yet another well.

But before we could start, we had to wait until the gang finished burying the dead men and Schlumberger ran a wire into Ellen Berger.

(Labor crew had to pound tie-downs into the
underlying caliche and Schlumberger had to assure that the chemical fracturing would hit
the rock formation containing oil (ellenberger).

Language is fun.

Nov 21, 2008 - 11:17 am

Sorry, comments for this entry are closed at this time.