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Edmund Onward James





Joined: 04 Jun 2009
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PostPosted: Wed Aug 03, 2011 2:21 pm    Post subject: The Warning documentary — the American financial calamity Reply with quote

In 2009, Brooksley Born warned about the financial problem in America. Click onto the site and scroll to the documentary. Lack of regulation has led to extremities of the derivatives. Fortunately, in Canada, only a few banks purchased the subrpime derivatives but are regulated. I beleive in freedom... to a point.

The Warning: Brooksley Born's Battle With Alan Greenspan, Robert Rubin And Larry Summers
http://www.businessinsider.com.....rs-2009-10

Here's how Frontline describes the documentary.

"We didn't truly know the dangers of the market, because it was a dark market," says Brooksley Born, the head of an obscure federal regulatory agency -- the Commodity Futures Trading Commission (CFTC) -- who not only warned of the potential for economic meltdown in the late 1990s, but also tried to convince the country's key economic powerbrokers to take actions that could have helped avert the crisis. "They were totally opposed to it," Born says. "That puzzled me. What was it that was in this market that had to be hidden?"

In The Warning, airing Tuesday, Oct. 20, 2009, at 9 P.M. ET on PBS (check local listings), veteran FRONTLINE producer Michael Kirk (Inside the Meltdown, Breaking the Bank) unearths the hidden history of the nation's worst financial crisis since the Great Depression. At the center of it all he finds Brooksley Born, who speaks for the first time on television about her failed campaign to regulate the secretive, multitrillion-dollar derivatives market whose crash helped trigger the financial collapse in the fall of 2008.

"I didn't know Brooksley Born," says former SEC Chairman Arthur Levitt, a member of President Clinton's powerful Working Group on Financial Markets. "I was told that she was irascible, difficult, stubborn, unreasonable." Levitt explains how the other principals of the Working Group -- former Fed Chairman Alan Greenspan and former Treasury Secretary Robert Rubin -- convinced him that Born's attempt to regulate the risky derivatives market could lead to financial turmoil, a conclusion he now believes was "clearly a mistake."

Born's battle behind closed doors was epic, Kirk finds. The members of the President's Working Group vehemently opposed regulation -- especially when proposed by a Washington outsider like Born.

"I walk into Brooksley's office one day; the blood has drained from her face," says Michael Greenberger, a former top official at the CFTC who worked closely with Born. "She's hanging up the telephone; she says to me: 'That was [former Assistant Treasury Secretary] Larry Summers. He says, "You're going to cause the worst financial crisis since the end of World War II."... [He says he has] 13 bankers in his office who informed him of this. Stop, right away. No more.'"

Greenspan, Rubin and Summers ultimately prevailed on Congress to stop Born and limit future regulation of derivatives. "Born faced a formidable struggle pushing for regulation at a time when the stock market was booming," Kirk says. "Alan Greenspan was the maestro, and both parties in Washington were united in a belief that the markets would take care of themselves."

Now, with many of the same men who shut down Born in key positions in the Obama administration, The Warning reveals the complicated politics that led to this crisis and what it may say about current attempts to prevent the next one.

"It'll happen again if we don't take the appropriate steps," Born warns. "There will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience."


Last edited by Edmund Onward James on Wed Aug 03, 2011 2:44 pm; edited 1 time in total
Edmund Onward James





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PostPosted: Wed Aug 03, 2011 2:37 pm    Post subject: Reply with quote

Brooksley Born of the FCIC: “We may well still be in a financial crisis”
By: David Dayen Thursday, January 27, 2011
http://news.firedoglake.com/20.....al-crisis/
Edmund Onward James





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PostPosted: Thu Aug 04, 2011 4:35 pm    Post subject: Reply with quote

Maybe O-bam-bam is privately laughing because he did what he set out to do — cause havoc and mayhem. Before the GOP took over Congress he was free-wheeling with stimulus plans, bail outs, Obamacare and so forth. Much of what he has accomplished will not be easy to turn around. At least not in a few years.

I wonder if he really wants to be a one-term President. There's also the fact that he might not want to be the first defeated black president. Black & White, but let's stick with a man of colour.
Edmund Onward James





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PostPosted: Fri Aug 05, 2011 8:12 am    Post subject: Reply with quote

Since the subrpime and derivatives was part of the problem, based on housing which started the crisis, and still is a problem, then what are the banks doing with the foreclosed houses? Selling them? Renting them? Bulldozing them? Or just holding on for better times?

Houses, new homes, renovations of older ones, land values and mortgages are a key barometer of the economy. Houising is a huge business. There are contractors, tradesmen, supplies and so forth.

The stimulus plans have not worked. What do you think the banks should do?

And what should the government do about the nefarious ones who were aware of the possibilties?
Edmund Onward James





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PostPosted: Fri Aug 05, 2011 1:29 pm    Post subject: Reply with quote

Obama’s Two Financial Crises
By Stanley Kurtz, National Review

Why is Barack Obama president of the United States? Media coddling? A weak McCain campaign? A strong, if dishonest, effort by Obama to present himself as a pragmatic centrist? All of these things played a role, but the advent of the subprime crisis at the height of the 2008 presidential campaign was the decisive factor. No drama Obama responded well, while McCain seemed over his head.

As America teeters on the brink of a second financial crisis, I think back to 2008, and the irony of a suprime mortgage fiasco propelling to the presidency a man who’d spent a career abetting the folks who’d caused the crisis to begin with. Despite releasing an Internet ad on ACORN, Obama, and the subprime meltdown, the McCain campaign was unwilling or unable to pursue the issue. The Clinton administration’s gutting of credit standards in the name of fair housing, in close cooperation with ACORN and Fannie Mae, laid the foundations of the mortgage crisis of 2008. Yet in the second presidential debate, McCain did nothing to combat Obama’s claims that the crisis was strictly a product of under-regulation. In the third debate, Obama flat-out lied about his longstanding ties to ACORN. The media, of course, let him get away with it.

While many conservatives know the real story well, the country as a whole has still barely heard it. The important new book by Gretchen Morgenson and Joshua Rosner has begun to break the fuller truth about the 2008 financial meltdown into public awareness, yet even there the focus is on Fannie Mae, while the ACORN connection is given short shrift. Fannie Mae would never have gone south if ACORN hadn’t pulled it into the subprime business in the first place. ACORN’s national banking campaign was coordinated by Obama’s close political allies at the group’s Chicago office, which Obama was heavily funding through two foundations at the time.

While I lay all this out in Radical-in-Chief, I keep thinking back to a story I didn’t have the time or space to tell in detail. ACORN’s first big target in Chicago was Bell Federal Savings and Loan Association. While poring over the ACORN archives at the Wisconsin Historical Society, I ran across the extensive preparation ACORN Chicago made for that first battle, including lots of correspondence with Bell Federal itself.

What struck me reading over the documents was Bell Federal’s naive confidence in its position. They knew that they’d treated all their mortgage customers the same, regardless of race–in fact they were proud of this–and Bell rightly insisted that undercutting credit standards in the name of supposed fairness was the surest way to financial disaster. Little did Bell Federal suspect the assault about to be launched against it–the massive campaign to portray it as a nest of evil, racist capitalists, with the usual bogus statistical claims that anything less than total equality of result meant discrimination.

True, the Bush administration did far too little to challenge the bad credit practices first solidified by Fannie Mae under Clinton administration pressure. And yes, Wall Street did far too much to exploit the irresponsible subprime regime of its day, leading to disaster in 2008. But responsible capitalism didn’t go down without a fight. I think of Bell Federal’s naive and noble–but doomed–resistance to ACORN, and Fannie Mae’s equally bitter battle to hold ACORN at bay–well before the horror story recounted by Morgenson and Rosner played out. It took a lot of heavy lifting by ACORN and its supporters to break down years of prudent business practice, embodied in the credit standards all sane bankers once rightly insisted on. Only after those standards were compromised did we reap the whirlwind.

Obama was intimately familiar with the battle to undermine America’s credit standards, and in full philosophical sympathy with it. It took a one-two punch of Alinskyite intimidation and federal regulatory pressure to create the preconditions for the subprime crisis of 2008, and Obama was on board for all of it. Yet he managed to convince the country, with barely a peep to the contrary from McCain, that the real problem was the lack of regulation.

Now we are flirting with a second crisis, brought on by overspending, debt, and excessive regulation. Dodd-Frank, a banking bill named for Barney Frank, another abettor of the Fannie Mae fiasco, depresses business. As the head of Americans for Financial Reform, one of Obama’s most important stealth-socialist community organizing mentors, Heather Booth, was the key lobbyist for Dodd-Frank. Exactly the same sort of leftism that laid the foundations for the first financial crisis is at the root of the second. The collapse of the European socialism that long served as a model for Obama’s organizing colleagues has only compounded the problem.

Yet Obama still struggles to pin his problems on Bush–that is, to return to the arguments about the origins of the financial crisis that worked for him in 2008. Those arguments were bogus to begin with. To this day, Obama hasn’t been called on it.

If the economy tanks again, Obama is finished. Yet if it recovers just a bit, the 2012 campaign will be a struggle between two accounts of the origins of our economic troubles: was Bush or Obama at fault? Conservatives may not want to hear it, but the “Bush did it” narrative still carries weight with the public. True, Obama will find it tremendously difficult to win reelection by campaigning against his predecessor. But he is going to try. That’s why the story of Obama’s two financial crises is still worth telling.
Edmund Onward James





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PostPosted: Mon Aug 08, 2011 8:28 am    Post subject: Reply with quote

Following is one of the reasons the banks are having difficulties with foreclosed houses.

For a period, Wall Street could not find the mortgage documents. That's right. The electronic age. Evidently, on top of that the banks fouled up their own paper works.Many of the located documents wwere forged.

Mortgage paperwork mess: Next housing shock?
http://www.cbsnews.com/stories.....9646.shtml

"Incompetent banking, back then, is causing foreclosure ghettos today. Although banks say courts have been accepting their paperwork, now that's changing as desperate homeowners countersue banks over the document fiasco. This leaves houses unsold indefinitely, undermining the recovery"....

..."Banks are defensive because all 50 state attorneys general want to punish them: the states are seeking about $20 billion in damages for what they say is the irresponsible, perhaps criminal way, that some mortgage companies handled what is, for most folks, the most important investment of their lives."
Edmund Onward James





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PostPosted: Tue Aug 09, 2011 8:38 am    Post subject: Reply with quote

The left and their activist media try to keep blaming Bush and the cost of an unecessary war in Iraq, too costly, they insisted. However, the fiancial catastrophe is the convergence of several storms mainly caused by Clinton, Carter, Democrats Dodd & Frank and a few others. The centrist Republicans turbned their heads.

Yesterday, I wanted to by a copy of the Wall Street Journal at my usual place but they ran out. Just 2. Great. A conservative area and only two. So I asked for the New York Post to see what they wrote about the credit rating and why. Lo and behold an article which summarizes much of what I have been stating and linking on this thread.

America’s road to discredit - Nicole Gelinas
http://www.nypost.com/p/news/o.....2dNJR6MATN

(Nicole Gelinas has written about urban economics, infrastructure, finance, and governance for nearly a decade. She is a contributing editor to the Manhattan Institute's City Journal magazine and a Chartered Financial Analyst (CFA) charterholder. Her book, [italics]After the Fall: How to Save the Economy from Wall Street -- and Washington[end-ital], will be out this fall.)

The Fed keeps tens of billions of toxic mortgage-related securities on its books. This keeps markets from pushing these securities down to their real levels, which would force lenders to admit that trillions in bad housing debt will never be repaid. Meanwhile, the administration lets regulators look the other way when it comes to banks’ incompetence in handling foreclosures -- which also delays recognition of bad debt...

...We’re digging deeper, too. Obama (via Fannie, Freddie and the Federal Housing Administration) has enticed new homebuyers to buy with just 3.5 percent down. As house prices slide, these buyers join those trapped under housing debt. It’s all an effort to prevent old homebuyers and lenders from having to to take their losses -- but it just locks more victims into the mess.It’s not just housing. The Dodd-Frank financial-regulation law makes it clear that big financial firms will never have to play by free-market rules: It just makes “too big to fail” official, while relying on regulators to somehow be smarter about seeing the next bubble coming.

Fannie and Freddie live on in limbo, too -- running up new (bad) obligations that the taxpayers will have to eat. But housing prices can't reach their “bottom,” and start recovering, until the fate of the two housing-finance giants is resolved.

Politicians have ignored this mess for three years now, because they fear the sharp short-term pain of confronting it. But getting past that pain is the only way to a real recovery; putting it off just adds to the eventual price (in pain and in cash).

As long as we don’t make borrowers and lenders accept the consequences of bad decisions, we can’t grow. Shielding people from accountability sucks up all of our extra economic resources, public and private.

And growth is critical to deal with the problems S&P cites. People with jobs and savings could accept entitlement changes. People terrified of where they will be in a year, not so much.
Edmund Onward James





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PostPosted: Wed Aug 10, 2011 11:38 am    Post subject: Reply with quote

Meltdown -- But Why?

By Ben Stein on 8.9.11 @ 7:17AM, The American Spectator

"What the heck is happening?" That keeps racing through my head as the world's markets crash and a staggering wave of fear races through the world's financial centers.

Why are we having this meltdown? Why right now?

The real economy is not doing great, but corporate profits are extremely strong. The nation's large corporations are loaded with liquidity. The luxury retail sector is powerful. Autos are excellent. The agricultural sector is stupendously strong. High tech and biotech are doing well, sometimes amazingly well.

The stock market is a barometer of corporate profits and somehow the barometer is now telling us corporate profits will fall far and fast -- yet the evidence for this is thus far faint. It may come, but markets, as the old saw goes, forecast ten out of every five recessions.

For pitiful, grizzled old me, when I see markets falling this fast, I smell "speculator." Economists and statisticians are not trading stocks. TRADERS are trading stocks and if they see a way to make money by selling or using options or instruments that are like a sale, they will make money that way. It has very little to do with the larger economy.

I offer as the world prize exhibit the Crash of '87. It was the biggest Crash ever in history before or since, was done entirely to make money off a trade between the cash and the futures of stocks prompted automatically by something laughably called "portfolio insurance." Within a few months, the market completely recovered and there was no recession.

That is, falls are often -- not always -- an epiphenomenon, if I have the right word, made by a small group of willful men within the markets and not connected with the larger economies.

Yes, Italy has problems. Yes, the USA has problems. Yes, our debt was just downgraded and rightly so since the federal debt is just a massive Ponzi where the earlier investors are paid by the later investors. But the Ponzi can go on a long time and Italy can be bailed out by the ECB -- and in the meantime corporate profits are brisk.

To my old and possibly failing eyes, we seem to be in a panic manufactured by speculators, fed by the media, poisoning the hopes and plans of the whole world.

The leading clue is the stupefying rise of gold, which simply bears no relation to any traditional metric. Gold buying panics are sometimes -- not always -- signs of a manufactured panic, just as any buying panic in a commodity is.

But the most astonishing part of the whole dreary tableau is the utter irrelevance of President Obama. He cannot do anything about anything. He might as well be on the moon. The gunslingers on Wall Street and in London and Hong Kong and Tokyo have made him absolutely outer planetary. It's almost sad. He's flailing his arms around, and no one is listening. He might as well be President of The Off World Colonies. "Yes, we can....we can be utterly irrelevant."

These are strange times. Up here at Lake Pendoreille though, it's paradise. The moon shines on the water. The osprey slide through the air, and the freight trains shake the walls. Far from Broad Street, all is well.
don muntean





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PostPosted: Fri Aug 12, 2011 12:36 am    Post subject: Reply with quote

Could this economic crisis be less debt related and more currency speculation driven?

There is talk of a 'gold bubble' an 'oil bubble' a 'debt bubble' and even a 'fiat bubble' as driving this apparent economic downturn...while were still on the tail-end of the 2008-2009 recession.

I do think the 'fiat bubble' lends more logic - especially when we add the currency speculators into the formula.

We've been hearing about gold and these alleged "record high" prices but when we hear of these record prices - we don't often hear what the 'inflation adjusted' price of gold is.

Taken at that more realistic perspective - gold hasn't reached record prices - it is less than the 1980 peak! 'Adjusted for inflation, the price of gold today is less than the January 1980 peak of more than $2,100 per ounce (in 2011 dollars).'

http://goldprice.org/inflation.....price.html

Could gold/currency speculators be 'profiting' from this false sense of "record" gold prices?

Soros' bogus market 'reflexivity' theory - is a carefully honed investment 'scheme' [in my way of thinking] - and it has become a driving factor in gold/currency valuation and - it isn't normal market dynamics at all...I think this reflexivity scheme IS at the center of much of our collective problem.

He claims he noticed this "pattern" over his years of investing . It's readily observable however that it's a an investment scheme he's developed [in part] through his study of Karl Popper's ideas.

We've all heard that saying: "you need money to make money"!

From wikipedia:

"Reflexivity is discordant with equilibrium theory, which stipulates that markets move towards equilibrium and that non-equilibrium fluctuations are merely random noise that will soon be corrected. In equilibrium theory, prices in the long run at equilibrium reflect the underlying fundamentals, which are unaffected by prices. Reflexivity asserts that prices do in fact influence the fundamentals and that these newly-influenced set of fundamentals then proceed to change expectations, thus influencing prices; the process continues in a self-reinforcing pattern. Because the pattern is self-reinforcing, markets tend towards disequilibrium. Sooner or later they reach a point where the sentiment is reversed and negative expectations become self-reinforcing in the downward direction, thereby explaining the familiar pattern of boom and bust cycles."

http://en.wikipedia.org/wiki/R....._Economics

Currency 'valuation' is supposed to determined in the regular stock/commodity markets - based on a specific country's economic viability and economic output, etc., not based on it's 'value' - in the hands of the currency speculators?

What if all of this global economic crisis IS a result of market manipulations - I know that sounds entirely conspiratorial but, is there any room for such an assessment?

If an investor/group has enough standing capital - to at any given time purchase vast amounts of currency [or gold] - then to sell them off as fast as they bought them - imagine the ability to thus shape and 'drive' market sentiments [reflexivity 'theory' at work!]!

There have been shadowy 'investors' thus generating billions since the inception of the current fiat system - over the last 35+ years - by thus manipulating market sentiments - to induce/cultivate these boom/bust cycles. They can thus 'set' prices!

Here is how I see their 'theory' operating; first they drive valuation low, they then buy up - thus driving up valuation then - when they decide the value has risen high enough - they sell off - [and make their profits] thereby driving values low again - thus resetting the self-reinforcing cycle!?

George Soros and his investor 'cartel' were accused of trying to thus 'break the bank of England' in 1992 wasn't he?

When we add 'national debt' into the equation - it then becomes even more complicated - when the 'value' of a national debt - fluctuates based on the value of a nation's internationally traded fiat currency. Can that 'disequilibrium' lead to the runaway so-called meltdowns we see potentially emerging?

We generally think 'a buck is a buck' and we can extrapolate that to any other country/currency - however - a buck is NOT always a buck! LOL!

Naturally we're reminded of that fact when we see the fluctuating purchasing power or "value" of our buck! So let's take that back to the 'national level' - when/how does inflation turn toward hyperinflation?

To what degree is inflation 'artificially' determined - by currency valuation/devaluation?

A real number valuation has less and less to do with a country's noted economic output/viability - than it does with international currency speculation practices! Does that make sense?

Of course - it must be noted here at some point that traditional concepts of 'supply and demand' obviously do not apply to currency trade!

So what is 'really' driving currency valuation? If it's manipulated market dynamics then what does that lead to when too many nations end up with untenable debt AND wildly 'fluctuating' currency to pay it off?

I don't for a moment think that the 'fiat system' is the problem. The problem appears to be investment abuses of that fiat system. The markets have been essentially turned into a common casino?!

What is wealth? How is it gained? Should one be able to make money through the buying and selling of money? Commodity/service based prosperity is the 'legitimate' purpose of market economics isn't it?

Should markets continue to include today's currency/gold speculation practices?

Some of the sentiments driving 'common currencies' are shaped by a desire to escape the woes of the currency/gold speculators?

We question, 'what is the answer' - we could talk about the problems for a lifetime! LOL! Though I don't think we all ought to buy into the 'market crisis' pattern of thinking! That is playing directly into the shadowy speculators reflexivity scheme!

With 'internally' stable economies like Canada and with so many still emerging economies - there is no global market meltdown on the way - unless irrational investor fear 'drives' it into 'runaway mode' and - I don't see that happening long term either!

The U.S. will find a way through this crisis - when they get their Republicans back into office. The European Union will at some point realize that they are doubly beleaguered by these noted market circumstances - in combination with their 'premature' program of market/currency amalgamation.

The world needs to address the issues of currency and gold speculation!?
joeleitz





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PostPosted: Wed Sep 07, 2011 6:54 pm    Post subject: Reply with quote

Edmund Onward James wrote:
Following is one of the reasons the banks are having difficulties with foreclosed houses.

For a period, Wall Street could not find the mortgage documents. That's right. The electronic age. Evidently, on top of that the banks fouled up their own paper works.Many of the located documents wwere forged.

Mortgage paperwork mess: Next housing shock?
http://www.cbsnews.com/stories.....9646.shtml

"Incompetent banking, back then, is causing foreclosure ghettos today. Although banks say courts have been accepting their paperwork, now that's changing as desperate homeowners countersue banks over the document fiasco. This leaves houses unsold indefinitely, undermining the recovery"....

..."Banks are defensive because all 50 state attorneys general want to punish them: the states are seeking about $20 billion in damages for what they say is the irresponsible, perhaps criminal way, that some mortgage companies handled what is, for most folks, the most important investment of their lives."


The homeowners and the various states should sue the banks because what they did with the documentation for the homes was illegal. I know it sounds radical but the US government might as well have paid off every mortgage in America rather than give all the tarp funds (and other trillions) to local and foreign banks. The money that they gave the banks hasn't solved the crisis for anyone and millions of people are still on the hook for all that owed money. It's a total mess. It doesn't add up to a very productive society at the moment - especially for those who have been foreclosed upon.
joe@aurora hotels
Dori Christensen





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Posts: 1


PostPosted: Mon Feb 06, 2012 7:18 pm    Post subject: Reply with quote

Edmund Onward James wrote:
Obama’s Two Financial Crises
By Stanley Kurtz, National Review

Why is Barack Obama president of the United States? Media coddling? A weak McCain campaign? A strong, if dishonest, effort by Obama to present himself as a pragmatic centrist? All of these things played a role, but the advent of the subprime crisis at the height of the 2008 presidential campaign was the decisive factor. No drama Obama responded well, while McCain seemed over his head.

As America teeters on the brink of a second financial crisis, I think back to 2008, and the irony of a suprime mortgage fiasco propelling to the presidency a man who’d spent a career abetting the folks who’d caused the crisis to begin with. Despite releasing an Internet ad on ACORN, Obama, and the subprime meltdown, the McCain campaign was unwilling or unable to pursue the issue. The Clinton administration’s gutting of credit standards in the name of fair housing, in close cooperation with ACORN and Fannie Mae, laid the foundations of the mortgage crisis of 2008. Yet in the second presidential debate, McCain did nothing to combat Obama’s claims that the crisis was strictly a product of under-regulation. In the third debate, Obama flat-out lied about his longstanding ties to ACORN. The media, of course, let him get away with it.

While many conservatives know the real story well, the country as a whole has still barely heard it. The important new book by Gretchen Morgenson and Joshua Rosner has begun to break the fuller truth about the 2008 financial meltdown into public awareness, yet even there the focus is on Fannie Mae, while the ACORN connection is given short shrift. Fannie Mae would never have gone south if ACORN hadn’t pulled it into the subprime business in the first place. ACORN’s national banking campaign was coordinated by Obama’s close political allies at the group’s Chicago office, which Obama was heavily funding through two foundations at the time.

While I lay all this out in Radical-in-Chief, I keep thinking back to a story I didn’t have the time or space to tell in detail. ACORN’s first big target in Chicago was Bell Federal Savings and Loan Association. While poring over the ACORN archives at the Wisconsin Historical Society, I ran across the extensive preparation ACORN Chicago made for that first battle, including lots of correspondence with Bell Federal itself.

What struck me reading over the documents was Bell Federal’s naive confidence in its position. They knew that they’d treated all their mortgage customers the same, regardless of race–in fact they were proud of this–and Bell rightly insisted that undercutting credit standards in the name of supposed fairness was the surest way to financial disaster. Little did Bell Federal suspect the assault about to be launched against it–the massive campaign to portray it as a nest of evil, racist capitalists, with the usual bogus statistical claims that anything less than total equality of result meant discrimination.

True, the Bush administration did far too little to challenge the bad credit practices first solidified by Fannie Mae under Clinton administration pressure. And yes, Wall Street did far too much to exploit the irresponsible subprime regime of its day, leading to disaster in 2008. But responsible capitalism didn’t go Whistler condos down without a fight. I think of Bell Federal’s naive and noble–but doomed–resistance to ACORN, and Fannie Mae’s equally bitter battle to hold ACORN at bay–well before the horror story recounted by Morgenson and Rosner played out. It took a lot of heavy lifting by ACORN and its supporters to break down years of prudent business practice, embodied in the credit standards all sane bankers once rightly insisted on. Only after those standards were compromised did we reap the whirlwind.

Obama was intimately familiar with the battle to undermine America’s credit standards, and in full philosophical sympathy with it. It took a one-two punch of Alinskyite intimidation and federal regulatory pressure to create the preconditions for the subprime crisis of 2008, and Obama was on board for all of it. Yet he managed to convince the country, with barely a peep to the contrary from McCain, that the real problem was the lack of regulation.

Now we are flirting with a second crisis, brought on by overspending, debt, and excessive regulation. Dodd-Frank, a banking bill named for Barney Frank, another abettor of the Fannie Mae fiasco, depresses business. As the head of Americans for Financial Reform, one of Obama’s most important stealth-socialist community organizing mentors, Heather Booth, was the key lobbyist for Dodd-Frank. Exactly the same sort of leftism that laid the foundations for the first financial crisis is at the root of the second. The collapse of the European socialism that long served as a model for Obama’s organizing colleagues has only compounded the problem.

Yet Obama still struggles to pin his problems on Bush–that is, to return to the arguments about the origins of the financial crisis that worked for him in 2008. Those arguments were bogus to begin with. To this day, Obama hasn’t been called on it.

If the economy tanks again, Obama is finished. Yet if it recovers just a bit, the 2012 campaign will be a struggle between two accounts of the origins of our economic troubles: was Bush or Obama at fault? Conservatives may not want to hear it, but the “Bush did it” narrative still carries weight with the public. True, Obama will find it tremendously difficult to win reelection by campaigning against his predecessor. But he is going to try. That’s why the story of Obama’s two financial crises is still worth telling.


I agree, very good post.
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The Warning documentary — the American financial calamity

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