Politics


I have a couple of links on my blogroll that are political. One is conservative http://themachoresponse.blogspot.com and the other is liberal http://blogs.knoxnews.com/knx/granju/

 I like to avail myself of both viewpoints.  

I am not on the fence for this election. I back John McCain. But I am not a social conservative by any means. So obviously many of his stands on social issues bother me. If we weren’t in a war and in the midst of an economic crisis, I might rethink my vote. But I think he would be a better president than Obama. He did propose legislation 3 years ago that may have prevented at least in part the economic crisis we are in now. In contrast,  try googling Obama’s relationship with Fannie Mae. McCain was for the invasion of Iraq, but so was almost everybody else. What made Obama so sure invading Iraq was a bad idea? Was it sound analysis? Is his ‘no’ vote  proof that he has good judgement when it comes to foreign policy?  McCain simply refuses to second guess his vote to invade Iraq when to do so would be pointless and just hurt the morale of our military. The only thing that I would disagree more with in retrospect than the invasion of Iraq is leaving prematurely.  Two wrongs, if it was indeed wrong to invade, don’t make a right.  In fact, if  Bush had listened to McCain and committed the resources the military initially needed  to prevent Iraq from descending into chaos, things would have gone much differently and we all might feel differently about it.

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4 Responses to “Politics”

  1. Reena Says:

    How about adding a link to a blog written by an Economist? He even discusses the Community Reinvestment Act.

    http://economistsview.typepad.com/economistsview/2008/09/it-wasnt-the-co.html

    Reena

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  2. diddly Says:

    I read the article. Thanks. Maybe you can help me out here Reena. I don’t understand this from the article:

    “Beyond that, the mere existence of “subprime” loans — i.e., mortgages given to less-creditworthy individuals at higher interest rates — isn’t the problem here. The problems have to do with what was done with the loans after they were packaged, sold and used to make leveraged plays.”

    So people being unable to pay their mortgages “…isn’t the problem here.” Really? It surely has something to so with “the problem”. At the very least, it is the beginning of ‘the problem’. Weren’t the meanie banks who packaged and sold these loans just trying to minimize their risk and a avoid the fall out of these loans not being paid back? Does that make them ‘greedy’? I need help understanding this.

    This article also somehow implies that Republicans are blaming minorities for this problem. That seems like a stretch.

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  3. Reena Says:

    This isn’t exactly my area of economics– but from what I’ve been able to follow from this crisis and my understanding– part of the problem is that lending companies and investment banks began trading and selling loans– basically– betting on defaults. Kind of like a Vegas style environment for the financially savy. This led to a separate type of market for these types of loans– hence the comment . . .

    “The problems have to do with what was done with the loans after they were packaged, sold and used to make leveraged plays.”

    What I found interesting in the posts is the statement that most of the banks making subprime loans were not part of the Community Reinvestment Program. I didn’t catch the implication that Republicans are blaming minorities for this problem. But I may have simply missed it. I am not sure if this Professor has a particular slant– I hope to look into that more later on. Typically though, economists prefer for government to stay out of markets–i.e a more Republican viewpoint– less government is better.

    The problem with this is that for markets to work properly you need to make some basic assumptions– full information that is understood by those involved is a major requirement. Unfortunately, perdsonal finance in our public education system isn’t emphasized and leads to folks not understanding the full ramifications of a subprime loan when they sign on the dotted line.

    The “meanie” banks are to blame– in part– especially for all the trading crap.

    People also need to be more accountable for thier own actions. I can recall ARMs going for something like 1.4% about a decade ago. Honestly, what were people thinking? If it sounds to good to be true then it is– and if it is possible, it likely will not last long.

    Quite frankly, I don’t think subprime loans with ARM interest rates should be allowed long terrm loans such as mortgages.

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  4. diddly Says:

    Reena wrote: I didn’t catch the implication that Republicans are blaming minorities for this problem.

    Here it is:

    “In fact, the right seems to have finally come up with a new line: Democrats forced banks to give mortgages to low-income minorities, those low-income minorities couldn’t keep up with their mortgage payments, and the banks struggled as a result ”

    Reena wrote: What I found interesting in the posts is the statement that most of the banks making subprime loans were not part of the Community Reinvestment Program.

    I got that too, here:

    “Problem is, half of the subprime loans came from mortgage companies with no CRA involvement at all. Another 25%-30% came from companies with very little CRA exposure. For those who left their abacus at home, that’s 80% of the loans which were fully or largely outside CRA jurisdiction. More than that, the non-CRA mortgage firms made subprime loans at twice the rate of CRA-covered firms. Which basically leaves a stake in the heart of this particular theory. ”

    My question: If non-CRA banks are competing with CRA banks, doesn’t that have an impact on the behavior of non-CRA banks? Weren’t they pushed somewhat into taking greater risks in their lending? I am not sure the stake is driven deeply enough into this CRA theory to kill it.

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