Upcoming Elections Questions

[Knowed Out]

We're going to be deluged with candidate ads for the next few weeks. I've decided I'm only going to focus on one issue. I don't give a crap who's in a Tea Party, who slept with who, who clubs baby seals, who eats aborted fetuses, whatever. I'm only going to vote against whoever helped pass legislation that contributed to bringing about the Great Recession.

I realize there's no one cause or person responsible. There's too many factors that contributed to it, so there's no way I can hold the major players accountable. I'm going to focus on sub-prime mortgage lending. As I understand it, predatory lenders exploited revisions made to mortgage laws. The ripple effects somehow drove a lot of businesses into bankruptcy. Assuming this assumption has some grain of truth to it, how can I find which law allowed this, and then which of my state's congresspeople voted for it?

[Colibri]

Moving to the US Elections forum from GQ.

Colibri
General Questions Moderator

[Chefguy]

We're going to be deluged with candidate ads for the next few weeks. I've decided I'm only going to focus on one issue. I don't give a crap who's in a Tea Party, who slept with who, who clubs baby seals, who eats aborted fetuses, whatever. I'm only going to vote against whoever helped pass legislation that contributed to bringing about the Great Recession.

I realize there's no one cause or person responsible. There's too many factors that contributed to it, so there's no way I can hold the major players accountable. I'm going to focus on sub-prime mortgage lending. As I understand it, predatory lenders exploited revisions made to mortgage laws. The ripple effects somehow drove a lot of businesses into bankruptcy. Assuming this assumption has some grain of truth to it, how can I find which law allowed this, and then which of my state's congresspeople voted for it?

It's not really legislators passing any particular piece of legislation. It's policy starting at the top that strips regulatory agencies of personnel and oversight responsibilities. When you don't keep an eye on things like Wall Street and insurance companies, they run rampant. This is why it's important to look at who is being dragged into office along with the person you vote for. Arguably evil people like Dick Cheney and others who control appointments and therefore policy decisions are largely to blame for what happened.

[Measure for Measure]

Yes, errors were made in the executive branch: they took deregulation too far. Also, when the Housing market started to overheat, they paid attention to the Wall Street Journal editorial page which said nothing was the matter.

At the same time, financial crises weren't as well understood in 2005, as the US had not had one since 1930-33. Sure we had hiccups such as the 1987 stock market crash, LTCM and various other financial scandals. But the idea that financial markets were most perfect held on.

Anyway, liberals have drawn conclusions from this. The Democrats passed a few financial reforms which the Republicans opposed in lockstep. Mortgage and financial expert Elizabeth Warren will be heading up newly-created Consumer Financial Protection Bureau, which will try stop banks from extending liar loans and other dubious products to the public. The Republicans in the Senate filibustered her appointment, so Obama created a special position so that she could get to work.

Congress passed the Credit Card Accountability Responsibility and Disclosure Act of 2009, endorsed by Consumer Reports magazine. Credit card due dates have to be on the same date each month: they can't flip them around. Payments won't be treated as late if they are mailed 21 days before the due date. If minimum monthly payments are made, card companies have to disclose the period of time and total interest that corresponds to such a schedule. Over the limit fees can be charged only if the customer asks for the account to allow such transactions: otherwise the credit card just has to turn down the charge. http://www.npr.org/blogs/thetwo-way/2009/05/credit_card_legislation_become.html
http://www.huffingtonpost.com/2010/02/22/new-credit-card-laws-what_n_471462.html

But hey, don't believe me. Have somebody name a specific constructive financial reform seriously proposed by some Republican congressman. Then we can see if it survives scrutiny. And since Republicans vote in lockstep, you can draw the necessary conclusions for any Republican challenger as well.

[IdahoMauleMan]

Yes, errors were made in the executive branch: they took deregulation too far. Also, when the Housing market started to overheat, they paid attention to the Wall Street Journal editorial page which said nothing was the matter.

At the same time, financial crises weren't as well understood in 2005, as the US had not had one since 1930-33. Sure we had hiccups such as the 1987 stock market crash, LTCM and various other financial scandals. But the idea that financial markets were most perfect held on.

Anyway, liberals have drawn conclusions from this. The Democrats passed a few financial reforms which the Republicans opposed in lockstep. Mortgage and financial expert Elizabeth Warren will be heading up newly-created Consumer Financial Protection Bureau, which will try stop banks from extending liar loans and other dubious products to the public. The Republicans in the Senate filibustered her appointment, so Obama created a special position so that she could get to work.

Congress passed the Credit Card Accountability Responsibility and Disclosure Act of 2009, endorsed by Consumer Reports magazine. Credit card due dates have to be on the same date each month: they can't flip them around. Payments won't be treated as late if they are mailed 21 days before the due date. If minimum monthly payments are made, card companies have to disclose the period of time and total interest that corresponds to such a schedule. Over the limit fees can be charged only if the customer asks for the account to allow such transactions: otherwise the credit card just has to turn down the charge. http://www.npr.org/blogs/thetwo-way/2009/05/credit_card_legislation_become.html
http://www.huffingtonpost.com/2010/02/22/new-credit-card-laws-what_n_471462.html

But hey, don't believe me. Have somebody name a specific constructive financial reform seriously proposed by some Republican congressman. Then we can see if it survives scrutiny. And since Republicans vote in lockstep, you can draw the necessary conclusions for any Republican challenger as well.

This article from 2003 reads a little differently. There is a quote from Barney Frank (of Dodd-Frank financial regulation fame, in case you're interested) at the bottom.

http://query.nytimes.com/gst/fullpage.html?res=9E06E3D6123BF932A2575AC0A9659C8B63&sec=&spon=&pagewanted=print

But who cares?

Quite frankly, arguing about whether Democrats or Republicans were more responsible for the financial crises is like arguing whether Coke or Pepsi is worse for your teeth.

When you're done shuffling around the deck chairs on the Titanic, perhaps a more important question to be asking is "Who is going to do the best job fixing it, going forward?" That might be more helpful, and might focus attention on those policies that will foster job creation and the creation of wealth for American citizens.

This has been one of the most sluggish *recoveries* from a recession, ever.

Here's a nice chart from the NYT

http://www.nytimes.com/interactive/2010/10/13/business/economy/economy_graphic.html?ref=economy

Bar 1 at the end is Clinton + Republican Congress
Bar 2 at the end is the Bush Adminstration + a Republican Congress
Bar 3 at the end is what we have today

[Robot Arm]

url]http://www.nytimes.com/interactive/2010/10/13/business/economy/economy_graphic.html?ref=economy[/url]

Bar 1 at the end is Clinton + Republican Congress
Bar 2 at the end is the Bush Adminstration + a Republican Congress
Bar 3 at the end is what we have todayLook at the shaded areas that represent each recession. We're about a year into the recovery on this one. At that point, the jobs line was just barely starting to tick up for the other two as well.

Which means that there ain't enough data yet to draw line #3 and meaningfully compare it to the other two.

[IdahoMauleMan]

url]http://www.nytimes.com/interactive/2010/10/13/business/economy/economy_graphic.html?ref=economy[/url]

Bar 1 at the end is Clinton + Republican Congress
Bar 2 at the end is the Bush Adminstration + a Republican Congress
Bar 3 at the end is what we have todayLook at the shaded areas that represent each recession. We're about a year into the recovery on this one. At that point, the jobs line was just barely starting to tick up for the other two as well.

Which means that there ain't enough data yet to draw line #3 and meaningfully compare it to the other two.

Fair enough. Let's watch.

[Knowed Out]

IdahoMauleMan: I realize you can't blame one party or the other for the Recession. I'm not interested in political affiliations. I want to know who was too short-sighted to foresee the ramifications of their actions. Their intentions may have been good, but the road to hell was paved with good intentions.

Perhaps those responsible are long-gone, but I want to do my part to make sure they're gone, even if it is just one grain of sand in a beach of botchups. I'd rather concern myself with this issue than go with gut reactions.

[Really Not All That Bright]

Look at the shaded areas that represent each recession. We're about a year into the recovery on this one. At that point, the jobs line was just barely starting to tick up for the other two as well.

Which means that there ain't enough data yet to draw line #3 and meaningfully compare it to the other two.

Fair enough. Let's watch.
I love that you're bitching about assigning blame for creating the recession, while simultaneously attempting to cast blame on Obama and the Democratic majority for the slow recovery.

[Boyo Jim]

Let me suggest you watch some outstanding Frontline documentaries. The Warning (http://www.pbs.org/wgbh/pages/frontline/warning/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid), Breaking the Bank (http://www.pbs.org/wgbh/pages/frontline/breakingthebank/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid), and Inside the Meltdown (http://www.pbs.org/wgbh/pages/frontline/meltdown/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid).

IMO you can start by blaming Alan Greenspan, except he wasn't elected and he isn't running for anything now.

If you want to hold people responsible in this election, look for people who've opposed reforms to Wall Street and the banking industry.

[Knowed Out]

If you want to hold people responsible in this election, look for people who've opposed reforms to Wall Street and the banking industry.

The closest I've found to that so far was Kit Bond (http://www.washingtonpost.com/wp-dyn/articles/A30436-2004Dec27_2.html#The_investigation_of_Fannie_Mae), Chairman of Senate Appropriations, who wanted to withhold $10 million from the Office of Federal Housing Enterprise Oversight's budget when they were investigating Fannie Mae before the bottom fell out. He's not from my state though, and neither are the other congresspeople in Senate Appropriations. Plus, 10 million is pennies compared to the billions Fannie Mae misaccounted.

That was 6 years ago. I haven't found out if Congress followed up on OFHEO's investigation yet.

[Boyo Jim]

What state are you from? Who are your senators and representative?

[Knowed Out]

Looks like Congress only voted for tighter regulations once (in 2007) since OFHEO started flashing the warning lights on Fannie Mae and Freddie Mac. This was the closest non-biased account (http://www.boston.com/news/politics/articles/2010/10/14/frank_haunted_by_stance_on_fannie_freddie/) I could find on the subject, which says that Congress's action was too little too late. Rep. Barney Frank gets most of the blame for sticking up for Fannie and Freddie back in 2003, then allowing them more leverage in further legislation. But, Frank's not from my state either. Guess I'll look into faulty banking regulation next.

[Knowed Out]

What state are you from? Who are your senators and representative?

North Carolina. Seeking re-election are Richard Burr as Senator, and Brad Miller as my district's Rep.

[Boyo Jim]

Burr seems worth voting against. Here is his own website's record of his votes. (http://burr.senate.gov/public/index.cfm?FuseAction=IssuesLegislation.VotingRecord)

Here is a Washington Post summary of his voting record (http://projects.washingtonpost.com/congress/members/b001135/key-votes/).

Straight Republican party line.

[IdahoMauleMan]

Fair enough. Let's watch.
I love that you're bitching about assigning blame for creating the recession, while simultaneously attempting to cast blame on Obama and the Democratic majority for the slow recovery.

I'm not bitching about anything.

Aside from a few sources like the Economist in the late 1990s and early 2000s (who were complaining about Greenspan's loose money policies), and a few libertarian-leaning sources that are always sounding warnings against fiat money and fractional-reserve banking in general, very few politicians - or *anybody*, for that matter - were sounding alarms about anything during the go-go days of the past 15 years.

I won't go off into an theoretical tangent on this thread (Hellestal, Exapno Mapcase, M4M and others have jostled on this subject from time to time) but suffice to say that I subscribe to the notion that when you have (1) fiat money controlled by the Fed and (2) fractional reserve banking, which is essentially an unstable force by it's very nature, financial crises like the one we are experiencing are *always inevitable* at some point along the way. They will be worse when turbocharged by efforts to foment more bank lending, such as those via Freddie and Fannie. We are feeling that pain now.

But let's drop that for now.

99% of the public, investors, politicians, businessmen, etc. thought that everything from about 1994 to 2007 was just fine. I realize that's an assertion, but feel free to challenge it.

The OP seems to be searching for the impossible. In a group of political hacks, from either party, subject to all sorts of skewed incentives and forces from lobbyists, campaign contributors, and their own general lack of intelligence on matters of the private sector....which genius was the One Who Could Have Seen This Coming, But Didn't?

Nobody fits that bill. If you waste time searching for a culprit you are missing the forest for the trees. Arguing about whether it's Democrats or Republicans is ridiculous. Arguing that a little more money here or there for more federal regulation is ridiculous. None of it would have mattered. The federal government continues to grow unabated, as well as the Fed's own balance sheet. $10 million for a few more terms-for-life regulatory hacks back in 2007, or 2003, or whenever would have accomplished nothing.

[Knowed Out]

Burr seems worth voting against. Here is his own website's record of his votes. (http://burr.senate.gov/public/index.cfm?FuseAction=IssuesLegislation.VotingRecord)

Here is a Washington Post summary of his voting record (http://projects.washingtonpost.com/congress/members/b001135/key-votes/).

Straight Republican party line.

Thanks, me Boyo. Burr's website only goes back a couple years with his voting record, so I can't see from there how he voted before 2007, when the Recession started. The Post's record goes back further, but I don't see anything having to do with reining in banking and housing lenders.

From the boston.com article I linked earlier, Barney Frank downplayed warnings from OFHEO in 2003, so he did nothing to introduce measures to Congress to regulate housing lenders. Neither did the Republicans when they controlled the Presidency, House and Senate between 2003 and 2007.

It probably wouldn't be fair of me to blame Burr for taking no initiative to get those regulations started, especially since he first took office in 2004, and nobody's going to listen to freshmen senators. I could research further to see if he was anywhere near the loop, but I kind of doubt it.

[gonzomax]

Quite frankly, the Repubs are responsible for the economic mess. They cut taxes while starting 2 wars and contracted billions of dollars of the military budget to their defense contracting friends. What do you suppose that does to the debt?
They have been pushing for deregulation in all phases of government for decades. So we get pollution and less safe food supply and a financial crash.
They spearheaded the banking and financial deregulation allowing the bankers to clean out the world economy.
From Reagan on, they said and governed on the premise that deficits don't matter.
Then when the Dems wanted to fix the mess, the filibustered their asses off.
No the Dems are not as bad as the Repubs. that would be impossible.

[Knowed Out]

gonzomax, when I research the issues, I do my best to look for non-biased sources. I've been looking for websites and articles that provide some kind of discussion about the Recession with a factual basis, rather than an emotional one. Guess what? They're usually conservative blogs. I can't find any liberal blogs that fit that criteria. If you know of any, clue me in.

[Knowed Out]

The only interaction I've found so far between Richard Burr and Fannie and Freddie is that they gave him and everybody else in Washington money to look the other way. He got $14 grand, somebody's trailer mortgage for a year,

Burr did co-sponsor a bill with John McCain to enhance regulation of GSEs (http://thomas.loc.gov/cgi-bin/bdquery/z?d111:SP03839:) (Government-Sponsored Enterprise), specifically Freddie and Fannie, but the amendment didn't pass.

Burr also went against party lines in voting to support stem-cell research.
(http://www.ontheissues.org/SenateVote/Party_2007-127.htm)
So far, I see no reason to vote against him.

[Really Not All That Bright]

Nobody fits that bill. If you waste time searching for a culprit you are missing the forest for the trees. Arguing about whether it's Democrats or Republicans is ridiculous. Arguing that a little more money here or there for more federal regulation is ridiculous. None of it would have mattered. The federal government continues to grow unabated, as well as the Fed's own balance sheet. $10 million for a few more terms-for-life regulatory hacks back in 2007, or 2003, or whenever would have accomplished nothing.
Fair enough- but you don't think Gramm-Biley-Leach had anything to do with the recent meltdown?

[Boyo Jim]

How about voting against the Wall Street reform (http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=00208) legislation?

How about opposing the mortgage reform legislation described here (http://www.housingwatch.com/2010/05/13/real-estate-broker-bonuses-and-liar-loans-axed-by-senate/). You can find that he opposed it by looking at vote #141 on his senate website viting record link above.

[gonzomax]

gonzomax, when I research the issues, I do my best to look for non-biased sources. I've been looking for websites and articles that provide some kind of discussion about the Recession with a factual basis, rather than an emotional one. Guess what? They're usually conservative blogs. I can't find any liberal blogs that fit that criteria. If you know of any, clue me in.

http://krugman.blogs.nytimes.com/ Krugman a Nobel winning economist, warned of what was going to happen to the economy years ago. He is hated because he does not agree that big banking and big business are not blameless.

[Knowed Out]

How about voting against the Wall Street reform (http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=00208) legislation?

How about opposing the mortgage reform legislation described here (http://www.housingwatch.com/2010/05/13/real-estate-broker-bonuses-and-liar-loans-axed-by-senate/). You can find that he opposed it by looking at vote #141 on his senate website viting record link above.

Heh, OK. -2 points for Burr. Back down to 0.

[Knowed Out]

http://krugman.blogs.nytimes.com/ Krugman a Nobel winning economist, warned of what was going to happen to the economy years ago. He is hated because he does not agree that big banking and big business are not blameless.

After reading a few of his columns, I can see that he thinks greed is a bad thing. He also thinks economists are more concerned with pretty mathematics than how financial systems actually work.

He does provide another side to economy debates. I'm not sure how he proposes to regulate greed yet. He seems to favor more breaks and incentives for emerging businesses, but if they were successful, wouldn't they become more investment fodder that can be bought, resold, then collapsed?

I think I'm beginning to see where an overlap of ideologies is what led to the gaping hole in our economy today. Republicans favor passing laws that allow investors, brokers, and business owners to make more money. Democrats favor laws that allow lower income earners to buy more things. Thus, both parties favor granting mortgage companies, realtors and banks more leeway in making homes available for buying, then seeing the cash pipeline flow. Neither party seemed to be concerned with the other side of the ledger sheet.

[IdahoMauleMan]

Fair enough- but you don't think Gramm-Biley-Leach had anything to do with the recent meltdown?

Not really. I think Wikipedia's "Criticism" and "Defense" sections at the bottom sum up the arguments fairly well.

http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act

At best, I think you could argue it was a contributing factor. I like the economist's comments in the opening of the "Criticisms" paragraph.

In my mind the overwhelming gasoline-for-the-fire was loose monetary policy combined with the government-backing of $5 trillion of lending via Freddie and Fannie, fueling an asset bubble.

[Boyo Jim]

Heh, OK. -2 points for Burr. Back down to 0.

Why is he back to 0? Where did his plus 2 come from?

[Boyo Jim]

Brad Miller seems a reasonable guy to me. Voted in favor of Wall Street reform (http://www.votesmart.org/voting_category.php?can_id=10205), and IMO was on the right side of several other issues noted in the same link. Here's another page (http://www.sourcewatch.org/index.php?title=Brad_Miller) on his record if you want to look more closely.

[scabpicker]

Not really. I think Wikipedia's "Criticism" and "Defense" sections at the bottom sum up the arguments fairly well.

http://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act

At best, I think you could argue it was a contributing factor. I like the economist's comments in the opening of the "Criticisms" paragraph.

In my mind the overwhelming gasoline-for-the-fire was loose monetary policy combined with the government-backing of $5 trillion of lending via Freddie and Fannie, fueling an asset bubble.

Well, the criticism side cites 3 economists, one with a Nobel, on its side. It also has reasons listed. The defense has 2 truth challenged politicians who either sponsored or signed the bill, 2 magazine articles (the one I checked didn't explain how it wasn't a cause, it just stated it wasn't, them moved on to blaming the CRA), and 2 economists who claim that it actually softened the crisis. They claim this happened by allowing the losses the investment banks were taking to be absorbed by the large deposit banks they merged with. I really don't think that's a good argument. For example, I am pretty sure that BofA wishes it hadn't bought Merrill Lynch. Essentially, they're saying by involving the entire financial system, it caused the crisis to be less. My understanding may be faulty, but I think the problem was so great partly because the financial crisis exposed the entire financial system to the problem, so no one knew of any safe place to put their money.


The loose monetary policy didn't help, either. Largely, there weren't enough people on either side of the aisle that knew what they were doing, and cared. The people who did know what was happening and cared, such as Brooksley Born (http://en.wikipedia.org/wiki/Brooksley_Born#Born_and_the_OTC_Derivatives_Market) were actively suppressed by persons ideologically opposed to regulation. Some of those people, such as Greenspan, have since admitted their mistake. Others, not so much. You can't throw the blame solely on one side of the Dem/Pub split, but the libertarian belief that markets would regulate themselves was a prime cause of the financial meltown.

[Knowed Out]

Why is he back to 0? Where did his plus 2 come from?

I liked his support of stem cell research and cosponsoring GSE regulation enhancement. Plus, his opponent, Elaine Marshall, hasn't really offered much more than "they screwed it up, so let's vote 'em out" rhetoric. Right now, I'm seeing the Fannie/Freddie bloat as our biggest albatross, and at least he tried to do SOMETHING about it, even if it did get voted down.

I'm not really sure his stance on Wall Street and investors is a bad thing. I know you think it will lead to more runaway investor trading, making the rich richer and the poor poorer etc, but that means more high income earners will enter the top tax brackets. Sometimes the pig has to lead itself to slaughter, because the farmer's not around.

The Dems have stayed faaaaar away from the notion of raising taxes for revenue. There's more focus on aiding start-up enterprises, but there's no guarantee their products and services will be in demand, especially if everybody's cutting back.

It seems like the more I research into this, the less it matters, because WE'RE ALL DOOOOOOMED!!!! :(