Is it possible that these two guys are both acting responsibly? Sure. That’s what makes this election interesting. It’s really hard to pigeonhole either of these guys, depsite how much people on both sides are trying to.

Sure, I think that’s a fair assessment. And I will consider voting for McCain in the Fall if Hill gets the nod. That hasn’t changed. But when I compare McCain and Obama, it just seems like Obama has thought a lot more about the entire package, and McCain hasn’t. And I still contend that, by now, the guy should have some more solid policy proposals than he has now. He can’t just be a one trick pony, because while foreign policy is important, it’s certainly not the most top of mind issue to Americans anymore.

As far as the “typical liberal” thing goes, I just think that hit a nerve with me because it sounded like something a friend of ours in another corner of the blogosphere would say with little or nothing to back it up. :-) I grant you that Obama is a liberal, but he seems like a new type of liberal and that has me hopeful again.

Well, I didn’t characterize Obama’s whole economic outlook as “typically liberal” just his comments on the housing crisis and his desire to spend more money on it. But point taken. It’s just as unfair of me to say “typical liberal” is it is for Obama to pretend McCain doesn’t want to do anything to help.

And, yes, maybe McCain should have been more on top of it. But if he ultimately comes up with a better plan, the delay isn’t unforgivable — considering he’s not the president, after all.

I like his messured approach. But I note that Obama goes out of his way to promote the free market, which is more than some of his supporters would do. Is it possible that these two guys are both acting responsibly? Sure. That’s what makes this election interesting. It’s really hard to pigeonhole either of these guys, depsite how much people on both sides are trying to.

First, you’re right that McCain has ideas, but they are “cut taxes, lower spending.” Again, while that’s technically an economic policy, I don’t really consider it anywhere close to the investment in infrastructure and new, green technologies that Obama is proposing. And let’s not get too far down the rabbit hole on assuming that I’m saying that only big government policies equal a plan. Come on now…

As far as the subprime mess goes, characterizing Obama’s response to this as knee jerk and typically liberal is a pretty easy out, don’t you think?

But hey, here’s some typically liberal, knee jerk thoughts he put together back in Sept 2007…

The third thing we need to do is look at other areas in the market where a lack of transparency could lead to similar problems. Many of the people who hold these subprime mortgages are now shifting their debt to credit cards, and if they do not understand the commitments they’re taking on, or are subjected to predatory practices, this could fester into a second crisis down the road. That’s why I’m proposing a five-star credit card rating system to inform consumers about the level of risk involved in every credit card they sign up for, including how easily the company can change the interest rate. If more Americans were armed with this kind of information before they purchased risky mortgage loans, the current crisis might not have happened. Now that so many are in debt, we shouldn’t let the same lax standards create another.

Finally, while it’s not my place to comment on the actions of the Fed, I have heard many of you say that you hope for a sizable rate cut tomorrow to soothe the market turmoil.

But I also know that there are nearly 2.5 million Americans who may lose their homes no matter what happens tomorrow. And so for those institutions that are holding these mortgages, I ask them to show some flexibility to folks trying to sell or refinance their houses. They are in the same liquidity pinch as companies are, but they don’t have the same resources available to protect themselves.

Now, in addition to these immediate steps, I also believe there is a larger lesson to be learned from the subprime crisis.

In this modern, interconnected economy, there is no dividing line between Main Street and Wall Street. The decisions that are made in New York’s high-rises and hedge funds matter and have consequences for millions of Americans across the country. And whether those Americans keep their homes or their jobs; whether they can spend with confidence and avoid falling into debt – that matters and has consequences for the entire market.

We all have a stake in each other’s success. We all have a stake in ensuring that the market is efficient and transparent; that it inspires trust and confidence; that it rewards those who are truly successful instead of those who are just successful at gaming the system. Because if the last few months have taught us anything, it’s that we can all suffer from the excesses of a few. Turning a blind eye to the cronyism in our midst can put us all in jeopardy. And we cannot accept that in the United States of America.

So I promise you this. I will be a President who believes in your success. I will value your contribution to this country and I will do what I can to encourage it, because I understand that how well you do is inextricably linked to how well America does. And I will always be a strong advocate for a market that is free and open.

Also, Obama had a plan in place far before the Bear Stearns bailout, and so this situation was merely an opening for him to make the case and basically say, “Okay, you know what…if the government is going to bail these big guys out, here’s my plan for helping the little guys.” But if this is what a “typical liberal” response would be, what would a “typical conservative” response be? :-)

Overarching, my point is not that Obama is the only fair one. It’s that Obama seems to have thought through this A LOT more than McCain. I could end up being wrong about this, but until I see evidence to the contrary, I don’t know what to tell you.

Oh, and by the way, if you take a look at Obama’s economic plan, how exactly is it typically “big government”? Seems like a lot of investment in existing markets, infrastructure and emerging markets. Also, there seems to be some pretty smart regulations being proposed to help stop bubbles we’ve seen in the past or bubbles that people are whispering about now that could happen 5 or 10 years down the road…like the American personal credit card debt bubble. Again, this shows foresight, not knee jerkism.

Your thoughts on Obama’s economic plan as compared to McCain’s would be welcome.

What do you mean by “economic plan” because McCain certainly has an economic policy. Just because it’s not chock-full of big government initiatives doesn’t mean it’s not a plan.

If you’re refering specifically to the housing crisis, considering Bear Sterns went down just a week or so ago, we’re clearly still uncovering the depth and breadth of the problem. I don’t think we can expect any candidate to somehow produce a comprehensive repsonse that is anything more than knee-jerk.

Which is why I say Obama is being a typical liberal. He doesn’t have a “plan” either but he sure as heck has a dollar amount he wants to spend to fix it. It’s unhelpful to say “throw money at it!” when there is nowhere near a consensus as to how the government can best address the matter without f’ing things up more.

As for fairness, McCain’s not advocating helping big business and ignoring the little people. He thinks irresponisble parties large or small should not get automatic government handouts. But he seems more than willing to provide assistance to those who’ve gotten hurt because of predatory lending or shady financial dealings. He just wants to do it smartly and not rashly.

It’s unfair to act as if Obama is the only one trying to be fair. I’d argue McCain is being MORE fair because he’s taking the time to be fair to the taxpayers as well and not just dedicating our money to a solution that might solve nothing.

There are many reasons why people buy homes, but any financial planner worth their calculator will tell you that “as an investment” should be a the bottom of your list. Buy it for basic shelter, tax incentives, and the ability to build equity to borrow against in case of emergencies. And sure, if you happen to make money off of it down the road, great, but a responsible homeowner should look at that as gravy.

As for all your other points, duly ignored. :-)

As far as the ravings of a left-winger, you keep telling yourself that Dos if it helps you deal with getting beat in debate after debate.

As Rev. Wright would put it, “Yo momma, Whitey!”

And anybody who knows anything about sound economic investing will you tell you to never buy a house as an investment.

This statement is almost incomprehesibly retarded. One buys a house as an investment…i.e. for the equity they build in the house. Now I know your portfolio is comprised mostly of organic dairy farms, sex toy manufacturers, and comic book collections – but for the rest of us less experimental investors — purchasing a home is a good way to invest the money that we would otherwise pay in rent.

If somebody can’t afford it and the government isn’t going to subsidize home ownership, a person shouldn’t own a home.

Can you cut the bullshit and simply admit that you are a communist? A complete and total 100% communist. We should be worried about totalitarian regimes abroad when we have people like you so willing to restrict freedom right here at home. What is that chant incessantly about wiretapping, something about an exchange of freedom for security. You make Alger Hiss look like F. Hayek.

I’d favor more stability in this sector and less return so real estate speculators (who are a BIG reason for this crisis) don’t “day trade” with houses.

I thought the problem was deceptive lending practices. Change Up. Now its real estate speculators. Tomorrow it will be sifty appraisers. The day after it will be evil real estate agencies. Look, go with Rev. Wright and condense it down to WHITEY. WHITEY IS THE PROBLEM. KILL WHITEY AND THERE WON”T BE ANY MORE FORCLOSURES!!! -<)

Ask those that invested what little they have, over-extended themselves to try to keep up with a mortgage, and found, in the end, they lost everything, and are in worse condition with greater credit card debt (which they were handing out like candy during that period of time), whether they think high priced loans were worth their chance at getting a home.

More, easy to get credit is not the way to fix this problem, it was the cause.

Justin wants a system which makes it more difficult for lower-income families to buy homes.

Actually yes.

If somebody can’t afford it and the government isn’t going to subsidize home ownership, a person shouldn’t own a home. Otherwise we get into situations such as this, where lenders engage in extremely dishonest practices, people make massive, suspect purchases and everybody gets screwed in the end except for the banks that financed and developed the entire scheme.

Also, to this point…

By regulating the risk-level of the financial markets you effective regulate a lenders willingness or ability to provide credit to high-risk borrowers, who tend to have less income. The lenders ability to engage in high-risk borrowers (with either low-income or poor credit) is a function of the potential return on such an investment and the financial stability of the lender. The higher the risk, the greater the return. This doesn’t just effect low-income, but includes anyone who plans to allocate 40-50% of their income to the mortgage payment.

Well Dos, what you’re describing is exactly what’s happening right now due to the lack of regulation. At least with increased regulation you can be sure that all the loans aren’t simply going to dry up and once. I’d favor more stability in this sector and less return so real estate speculators (who are a BIG reason for this crisis) don’t “day trade” with houses. And anybody who knows anything about sound economic investing will you tell you to never buy a house as an investment.

Concerning bailouts, it’s not very Friedman to help one institution with billions and put the fallout on the consumer in the form of inflation. I’d like to hear the free market economic theory that backs that up.

As far as the ravings of a left-winger, you keep telling yourself that Dos if it helps you deal with getting beat in debate after debate. :-)

By regulating the risk-level of the financial markets you effective regulate a lenders willingness or ability to provide credit to high-risk borrowers, who tend to have less income. The lenders ability to engage in high-risk borrowers (with either low-income or poor credit) is a function of the potential return on such an investment and the financial stability of the lender. The higher the risk, the greater the return. This doesn’t just effect low-income, but includes anyone who plans to allocate 40-50% of their income to the mortgage payment.

Here is an absolute economic fact: The problem with centralized control of the market is an informational disadvantage. Justin, as a raving left-wing liberal, do you really want to constrict the ability of lenders to loan money? Who do you think is going to feel that first and hardest? It is not going to be the Dos family.

Concerning the mortgage/banking crisis, this thing has been happening for the past couple years now. Bear Stearns is just a recent development. Again, not having some foresight on this issue doesn’t really demonstrate one is centrist.

So here’s a question…are you saying a “typical liberal” is one who says that the economic bailouts shouldn’t overwhelming benefit a certain group of people over another? I thought what Obama was talking about here was basic fairness, not a handout. Ultimately it’s not the large companies who have to suffer from the inflation and decreased value of the dollar that this Fed move will create. In fact, big businesses who export products benefit from a weaker dollar because more foreign countries buy products.

Again, we’re talking fairness here, not one-sidedness. I’m well aware of the inherent benefits and genius of economic Darwinism, but what’s happening now certainly isn’t that.

centerright, first off…your average consumer does this thing called “trust their lender” when the lender says they should get a 5 year ARM instead of a 30 year fixed. This isn’t the wild west. A business like home buying should have extremely rigid standards placed on it. Unfortunately, you have a lot of dishonest lenders out there who hide fees, don’t tell the truth about ARMs, etc. Also, I don’t know if you remember this, but even Alan Greenspan basically endorses ARMs back in 2004. And this hasn’t just been going on in the past ten years, but now it’s finally coming out because it has become standard operating procedure.

Also, I find it curious how all of a sudden the consumers are supposed to be the experts in these things. As if somebody who was getting their bathroom fixed would be responsible if their contractor used cheap materials instead of expensive materials and problems arose. Sure, caveat emptor, but I think it’s “Bull” to put ALL of the responsibility on the consumers’ shoulders. That’s why we have small claims courts and class actions lawsuits…and I think I’ve heard that there are hundreds being filed right now against lenders for deliberately deceiving consumers. We’re not talking about just offering choices, we’re talking about lying about them.

Also, it’s all fine and good to talk big about free markets, but (newsflash) we haven’t had free markets for over 80 years. And in the Bear Stearns case, the Fed did what the Fed was created for. After all, they are the central bank. And personally I find it pretty intellectually dishonest when I hear people say they’d be okay with a nationwide economic meltdown, especially when nobody realizes how that would effect them.

McCain isn’t yet offering us specifics (neither is Obama, mind you). But he’s showing us how he will approach such complicated problems. He’ll approach them reasonably, with an intent to listen to all proposals and decide on one not based on dogma but on which will produce the best results.

We’re just now getting a handle on the housing crisis. It’s a little unreasonable to expect a full-formed plan all ready to be thrust down the throats of Americans. Particularly when you consider these guys are just candidates and don’t have access to the full breadth of advisors, experts and data available to a president.

I quite like what McCain said on the matter. It’s the exact kind of approach us centrists have been arguing for. Obama is showing himself to be a typical liberal. McCain is showing himself to be far more thoughtful.

Economies always correct themselves. There is nothing in the constitution that says we will always have a increasing economy nor does it state that you will never lose money.

Those that took out risky loans or overmortgaged themselves and cannot pay that money back should lose their homes. Those that gave these people the money to buy those homes took a risk and now want a bailout because they lost money. Bull.

Next time be smarter on who you give money too.

I don’t support any government bailout-ever. If bear stearns goes down so be it. If that affects us all–so be it. The market is what it is. Learn to be prepared for ups and downs.

Justin, I think you really need to understand what you’re reading, because your writing shows a severe lack of knowledge on how Wall Street works.

Bear Stearns IS going down the toilet. The Fed is forcing a firesale to JPM to ensure the markets can continue. That’s not a bailout.

Obama’s “bailout” is pure election-year politics. It’s bad economics — Obama needs remedial Microeconomics.

From a political perspective, it was friggin’ brilliant of Obama to use the exact same dollar amount – $30B – in his proposal as was used to bail out Bear Stearns.

My view – Bear Stearns should have been allows to fail. That is what bankruptcy laws are for. Chickens – meet roost.

Today Barack Obama made a good speech on the economy. Obama clearly understands the problem, and he was speaking in New York, to no doubt rich fat cats, but still speaking far more directly, honestly and powerfully than John McCain’s recent peanut butter sandwich of an economic speech.

“Pain would now trickle up instead of prosperity trickling down”. Nice idiom…but.

If you look beneath the sheets. In Congress: already the law which Obama trumpets supporting with Chris Dodd may be a hollow shell. Holders of home equity loans (second mortgages) would need to be paid off first, before the government can help.
See article. So what good is that, if those most hurting cannot refinance, because of those second in line? Sounds like a field day for lethargy, sluggish momentum, and lawyers.

Or to paraphrase Whimpy and his hamburger. I will gladly pay off your loan tomorrow if you pay off mine today.

Onward with the crisis, onward to despair. I wonder which group of conniving banker’s paid for this? Probably those holding out their right hand for government assistance, while keeping their left hand in the pockets of the people.

Posted by Deeply Imbedded at 10:41 AM 0 comments