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U.S. Senator Marco Rubio (R-FL) addresses the final session of the 2012 Republican National Convention in Tampa, Florida August 30, 2012. REUTERS/Jason Reed (UNITED STATES  - Tags: POLITICS ELECTIONS)
Marco Rubio demonstrating truthiness.
There was very little actual response in Sen. Marco Rubio's state of the union response, since nothing he "rebutted" was actually said by President Obama. But there was plenty of Republican-style truthiness in Rubio's response. Most egregious to economists was this lie: "This idea—that our problems were caused by a government that was too small—it’s just not true. In fact, a major cause of our recent downturn was a housing crisis created by reckless government policies." That's a favorite of Republicans, described by Paul Krugman as the "Barney Frank did it" lie.

Mike Konczal has the definitive summary of the extensive actual data that's been collected on the issue. You know, facts. Like the fact that the subprime mortgage boom was in the private market, not in loans from Fannie Mae and Freddie Mac. And that Fannie and Freddie didn't originate enough subprime loans or hold enough high-risk mortgage-backed securities to have possibly caused the entire market to meltdown.

What caused the crisis was deregulation and greed. It was the cozy relationship between Washington and Wall Street that led Congress and regulators to "let the market decide" and have free rein. As Krugman says, this is the big deal in Rubio's speech. Not just the commitment to the lie, but the reality that given the opportunity, Republicans will "[give] the bankers a chance to do it all over again."

Originally posted to Joan McCarter on Wed Feb 13, 2013 at 08:08 AM PST.

Also republished by Daily Kos.

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Comment Preferences

  •  Yes, but if you want to keep your Tea Party cred (21+ / 0-)

    you have to spout this nonsense. On Fox News it's an article of faith for them and their woefully misinformed viewers.

    •  Speaking of the Tea Party, (4+ / 0-)
      Recommended by:
      ScienceMom, shoeless, hnichols, JerryNA

      no one has uttered a word about Rand Paul's speech. Did he not deliver it?

      Jon Husted is a dick.

      by anastasia p on Wed Feb 13, 2013 at 09:22:18 AM PST

      [ Parent ]

    •  But technically it is true, the repeal of Glass- (5+ / 0-)

      Stegal set the stage for what came after. Its like the meme about stealing 716 million from Medicare, techically it was taken from one part but what they failed to mention conveniently, it was plowed right back in to provide better services. They deal in HALF truths and when those don't work they trot out the outright lies, ala Romney. The half truths are the hardest to combat because the minute you have to concede any part of their memes you have lost the battle, but.... doesn't count they have already won.

      The work goes on, the cause endures, the hope still lives and the dreams shall never die. ~ Edward M. (Ted) Kennedy

      by cherie clark on Wed Feb 13, 2013 at 09:35:08 AM PST

      [ Parent ]

      •  There's a special place in Hell (5+ / 0-)

        For Phil Gramm, ex-Senator from Texas, who championed the repeal of Glass-Stegal in the Commodities Futures Modernization Act of December 2000 (lame-duck) Congress.  In addition to repealing Glass-Stegal, Gramm's POS created Credit Default Swaps that were going to be just like insurance policies, but would not be subject to regulation.  
        The DotCom boom created a huge pile of cash that needed to be invested, and the best safest place was US real estate.  Trouble was, they were running out of mortgages to invest in, so they started to relax the standards, eventually ending up with "NINJA" (No Income, No Job, No assets) mortgages.  The theory was that housing prices would continue to skyrocket, and NINJA borrowers could sell out before the bubble burst.    
        All the mortgages and mortgage-backed securities and other "derivatives" were created to soak up the DotCom and Chinese money.  It violated a fundamental trust in our financial institutions that was even worse than Reagan's Savings and Loan debacle.  Yet the Republicans created this "fiscally responsible' meme that is totally out of step with reality.

      •  Please (2+ / 0-)
        Recommended by:
        cherie clark, hnichols

        They deal in HALF truths and when those don't work they trot out the outright lies, ala Romney

        Here is the Senate vote to repeal Glass-Stegal and remember that Bill Clinton signed it, yet Bill Clinton was treated as though he was some kind of conquering hero at the Democratic Convention.

        If the Republican Party exclusively deals in half-truths then at best the Democratic Party has no memory at all -- and in the end it was Robert Rubin who engineered the repeal of Glass-Stegal because without it Citigroup could not do what they had already done.

        I won't be coming home tonight, my generation will put it right - Genesis 9:3

        by superscalar on Wed Feb 13, 2013 at 11:11:37 AM PST

        [ Parent ]

        •  Yes and who is standing in the way of any (1+ / 0-)
          Recommended by:

          meaningful laws or regulations? Certainly some Dems but the overwhleming number of Republicans want a free wheeling banking and investment system. In many ways Clinton is a bad man, not in the same sense as Reagan who was a very bad man, but bad in his decision making. Because I know he is smarter than buying the hyoe we were fed, he has to be complicit. I can forgive him Monica, Glass-Stegal no.

          The work goes on, the cause endures, the hope still lives and the dreams shall never die. ~ Edward M. (Ted) Kennedy

          by cherie clark on Wed Feb 13, 2013 at 11:39:53 AM PST

          [ Parent ]

      •  There is a book called "The Big Short" (3+ / 0-)
        Recommended by:
        Seeds, cherie clark, JerryNA

        that explains in great detail what was going on behind the scenes before the crash. It's not a pretty picture and it has nothing to do with Fannie Mae or Freddie Mac. I have read the book and it is a great read. I highly recommend it.

        It makes you realize exactly how big a lie the Republicans are telling when they claim government loans caused the crash. I don't know if it's willful ignorance or the hive mind or they're just deceitful. Probably all three.

        •  there was also fantastic reporting from (2+ / 0-)
          Recommended by:
          hnichols, JerryNA

          CNBC, who did a multi-part report on how this developed in the investment banks and hedge funds, resulting in intense demand for shitty mortagages they could package and sell to suckers. The Planet Money crew also did a great series of pieces in 2008 adn 2009, culminating with their purchase of a Toxic Asset and reporting on how it ceased to function at all even after they bought it for 10% of face value.

          ANYBODY claiming Fannie & Freddie caused the financial crisis of 2008 knows they are pushing a lie.

    •  Must be something in the water. (3+ / 0-)
      Recommended by:
      PsychoSavannah, shoeless, hnichols

      Stay Thirsty, My Friends. - Marco Rubio 2016

      by kitebro on Wed Feb 13, 2013 at 09:35:35 AM PST

      [ Parent ]

  •  How about George Bush's "Ownership Society"? (18+ / 0-)

    GWB used to brag how his great accomplishment was more people owned a home during his Presidency than during any time in history.  Then we found out why!

  •  "Bubbles" Greenspan created the housing crisis (11+ / 0-)

    They needed to raise interest rates in 2006 to sop up all of the loose capital that was going into the housing bubble.  This was OBVIOUS to economists everywhere (and I was warned by one).  In fact, there was a very clear inflection point in the summer of 2003 where rates should have started back up and didn't.

    But people were making money hand-over-fist and those Wall Street types love bubbles.

    Remember, the money from the deflating Dot-Com bubble had to be put somewhere, and housing was it.

    This is also why there was a push to 'privatize' Social Security... that would have created an even BIGGER bubble.

    Bubbles have to end, and it isn't pretty when they do.  Here we are.

    TL;DR: Greenspan loves bubbles.

    Happy little moron, Lucky little man.
    I wish I was a moron, MY GOD, Perhaps I am!
    —Spike Milligan

    by polecat on Wed Feb 13, 2013 at 08:20:18 AM PST

    •  Hmm, then it *was* the government (4+ / 0-)
      Recommended by:
      charliehall2, Sparhawk, gjohnsit, shoeless

      or at least they were intricately involved.

      going back to the Clinton years when deregulation of the financial sector really took wing.

      •  Then What Rubio Said Must Be True (1+ / 0-)
        Recommended by:
        cherie clark
        What caused the crisis was deregulation and greed. It was the cozy relationship between Washington and Wall Street that led Congress and regulators to "let the market decide" and have free rein.
        After all isn't Washington the Government, notwithstanding the fact that the GOP had a very strong hand in fostering and maintaining the cozy relationship.

        "Facts are meaningless. You could use facts to prove anything even remotely true." -- H. Simpson

        by midnight lurker on Wed Feb 13, 2013 at 09:28:49 AM PST

        [ Parent ]

        •  No. What Rubio said was not true. (3+ / 0-)
          Recommended by:
          shanikka, JerryNA, armadillo

          He said that the government caused the problem. In truth, the government just allowed the crisis to happen.

          That is a very important difference.

          Just when you thought there wasn't a dime's worth of difference between the two parties, the Republicans go and prove you're wrong.

          by shoeless on Wed Feb 13, 2013 at 11:02:39 AM PST

          [ Parent ]

  •  Go figure (10+ / 0-)

    The odd thing about his personal story is that his parents left Cuba in 1956, during the  murderous reign of El Hombre, Fulgencio Batista, who was the sock-puppet of Domino Sugar and all other things American (the Cuba scenes in Godfather II are fin-de-siecle Batista, especially the sex clubs).  So you can't say that Rubio's parents fled Communism; Castro didn't take Havana until 1959.  Instead, his parents would have fled capitalism at its very worst, when Cuba was basically "the whorehouse of the Caribbean" and its population enslaved in the sugar fields.  

    I assume the 1956 date is correct.  If it's a Wikipedia error, and they left in 1959 or later, his attitude would make more sense.  

  •  All right, I just tried to listen to Rubio, (16+ / 0-)

    got half way through when he started speeding up and sweating and wiping his face...

    I have to admit the first part I thought was smooth.

    But is it me? Is the Republican response usually so directly full of LIES?

    I caught that one about housing that's so infuriating. He also said that prior Presidents, Democratic and Republican, up to now have respected that the US is a place where our free enterprise economy was the source of middle class prosperity, but Obama WAS UNIQUE in thinking it is the cause of our problems--he makes Obama out to be different, out of the mainstream, odd one out of all Presidents...all this said in a warm, calm..."if you could just understand" tone. IT's really disgusting.

    Evil and untrue. This was the official REpublican response and it was brimming with lies, some quite personal.

  •  Countrywide Financial (8+ / 0-)

    Biggest violator in SubPriimes Private entity Not subject to CRA prior to buyout by BofA

    I want 1 less Tiny Coffin, Why Don't You? Support The President's Gun Violence Plan.

    by JML9999 on Wed Feb 13, 2013 at 08:45:35 AM PST

  •  But it's true (10+ / 0-)
    a major cause of our recent downturn was a housing crisis created by reckless government policies.”
    It is true because of Greenspan's willingness to let the financial sector "self regulate," and because of Bush's refusal to correctly administer the regulations against financial manipulation.

    A Republican that told the truth...unintentionally and not at all what he was trying to lie about.

    •  I kept wishing that Rich Cordray (1+ / 0-)
      Recommended by:

      would come on and do a rebuttal to this. Mortgage fraud and the housing crisis are his area of expertise, and what he was known for going after — successfully— when he was AG of Ohio. Cordray's not wildly charismatic but he's sublimely sensible and armed with facts.

      Jon Husted is a dick.

      by anastasia p on Wed Feb 13, 2013 at 09:26:53 AM PST

      [ Parent ]

    •  The Fed isn't the government. (2+ / 0-)
      Recommended by:
      shoeless, JerryNA

      It was established by an act of the government, but it's fundamentally a private entity.  Congress can watch the Fed,  but they don't control it, and neither does the President.  

      Governmental agencies can give advice to the Fed, but the fed can (and usually does) ignore them at will.  

      The Fed was warned about the housing bubble (specifically the danger posed by CDOs and CDSs)  by the office of Thift Management, and its chairwoman Brooksley Born.  Born's warning was dismissed out of hand by Greenspan.  Nobody else on the Board of governors dared stand up to Greenspan and the cult of personality he built for himself.  Nothing changed.      

    •  We should worry less about who was (2+ / 0-)
      Recommended by:
      Brooke In Seattle, JerryNA

      "responsible" (because that list goes on and on, public and private) and more about what was responsible: the philosophy that unfettered, unregulated capitalism "works."

      The most violent element in society is ignorance.

      by Mr MadAsHell on Wed Feb 13, 2013 at 10:53:35 AM PST

      [ Parent ]

  •  Rubio is 'underwater' on the housing crises. n/t (2+ / 0-)
    Recommended by:
    TomP, Mother Mags
  •  What he leaves out ... (7+ / 0-)

    is that the reckless government policies that caused the crisis were the deregulation of the residential mortgage market.

  •  I nearly vomited when he said that (11+ / 0-)

    Overall, the vibe I got from Rubio, unintended I'm guessing, was "I got mine, Jack.  Screw everybody else."  Student loans for me, not for thee.  Medicare for my parents, but not for anyone else.  And the anti-Obama crap throughout?  Truly disgusting.  The Rethugs have learned nothing.

    History says the Goopers have a good chance at the WH in 2016--parties rarely get three consecutive terms--but, if they keep up like this, Dems could very well hold it.

    "Power concedes nothing without a demand; it never has and it never will."—Frederick Douglass

    by costello7 on Wed Feb 13, 2013 at 09:05:44 AM PST

  •  Lying, Drinking, Sweating were the 3 things (7+ / 0-)

    I took away from the Rubio speech.

    Follow PA Keystone Liberals on Twitter: @KeystoneLibs

    by wishingwell on Wed Feb 13, 2013 at 09:07:27 AM PST

  •  there were so many lies, it's hard to know where (11+ / 0-)

    to start refuting them.

    The biggest one to me was when Rubio claimed that President Obama was responsible for most of the debt this nation has accrued since he's been in office.

    If we had any semblence of objective journalism being practices on any major broadcast outlet, someone could and should have shot that down immediately: President Obama inherited almost all of this country's debt from his immediate predecessor, George Walker Bush, who ran up this country's credit card like a drunken sailor (apologies to any drunken sailors out there), with unlimited funding for needess wars, as well as needless tax cuts for the richest Americans, who neither needed them nor deserved them.

    These Republicans keep telling us that they are going to change their messaging...and then...we keep hearing the same old lies that they've been spewing for years and years.

  •  My husband said Rubio reminded him of a young (7+ / 0-)

    Nixon with his sweating and lying. true.

    Follow PA Keystone Liberals on Twitter: @KeystoneLibs

    by wishingwell on Wed Feb 13, 2013 at 09:07:53 AM PST

  •  I guess he missed the news (8+ / 0-)

    like Bank of America's recent settlement of fraud charges related to mortgage loans. Or the similar prosecutions and settlements paid by Goldman Sachs, Credit Suisse, and J.P. Morgan. Or the civil fraud charges just filed against Standard & Poors. The government made them do it? I don't think so, but it's become commonplace for Republicans to make that claim.

  •  No, Rubio is correct (1+ / 0-)
    Recommended by:
    Celtic Legacy

    The housing crisis was created by the government's FAILIURE do exercise due diligence in regulation of the housing and housing finance markets. Of course, Rubio would make things worse.

    •  It's both (1+ / 0-)
      Recommended by:
      Mr MadAsHell

      The government failed to exercise oversight when it should have, and affirmatively did things (and is still doing them) to make the crisis worse.

      The government's job is as a referee, make sure people follow the rules, and play fair, and provide title recording and similar services.

      I don't think its job should be to 'help' people buy houses, or to influence interest rates, or any such activities. The market should do that stuff with little interference.

      (-5.50,-6.67): Left Libertarian
      Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

      by Sparhawk on Wed Feb 13, 2013 at 09:45:50 AM PST

      [ Parent ]

  •  another important point: Fanny and Freddy were (1+ / 0-)
    Recommended by:

    duped by Countrywide's subprime fraud, and Morgan Stanley (who acquired Countrywide just prior to the crash) had to pay dearly for that just a couple months ago.  

    "Well, yeah, the Constitution is worth it if you succeed." - Nancy Pelosi // Question: "succeed" at what?

    by nailbender on Wed Feb 13, 2013 at 09:10:55 AM PST

  •  imo, Probably the best source (0+ / 0-)

    on the housing boom and bust is not after-the-fact commentaries, but is actually a book written in 2007 by Peter Schiff called "Crash Proof."

    I have looked through and read many accounts of those years and Peter's was the most specific and accurate, which is incredible given that he wrote about it before the crash.

    I highly recommend this book.

    Disclaimer: you will need an open mind as Schiff definitely places most of the blame on government policy including the Fed.

  •  More Bad Stagecraft (2+ / 0-)
    Recommended by:
    PsychoSavannah, Aquarius40

    Marco, Marco, Marco... you're supposed to keep the crossed fingers behind your back.

    On the Internet, nobody knows if you're a dog... but everybody knows if you're a jackass.

    by stevemb on Wed Feb 13, 2013 at 09:17:24 AM PST

  •  Lying is what they are good at, not surprised (0+ / 0-)
  •  Really? (1+ / 0-)
    Recommended by:

    If this is the bright future of the GOP and their best foot forward in 2016, I think everyone should start welcoming Hillary to the White House today.

    Check out my blog I Need Politics at

  •  Damn government. Forcing mortgage brokers... (9+ / 0-) commit fraud by overstating clients' income and assets to qualify them for loans they otherwise would not get.  WHich of course was necessary because the government was forcing real estate agents and  appraisers to overvalue homes, by basing their appraisals not on what something was really worth, but how much credit people had available to them.

    And then when they forced banks to package these turd loans into CDOs that they sold on the open market (thereby mitigating their own risk to these toxic loans).  And they forced credit rating agencies to collude with investment banks to overrate the CDOs, marking them as more prime than they really were.  And forcing investors to buy trillions of dollars of these toxic vehicles by buying billions of dollars on the margin.  Then forcing Goldman Sachs to do a margin call that was calculated to wipe out several of its largest competitors.  

    Damn government.  When will they ever learn?  

    •  You Forgot (2+ / 0-)
      Recommended by:
      JerryNA, RerumCognoscereCausas

      That all those brokers were forced to do so by clients the overwhelming majority of which had no idea that the documents they signed blank applying for loans had such whoppers contained in them. (Since of course it's illegal to tell such whoppers in connection with borrowing.)

      More than 13 years of litigating these cases now, and what I just wrote continues to be true more often than note.

  •  One trusts republicans at one's peril (2+ / 0-)
    Recommended by:
    Buckeye54, Brooke In Seattle

    There is just no point wasting one's time listening to the shit that they say: it's never true, its never correct, its always a scam, its always deceitful.


    One is stupid as shit to continue to engage with them expecting good faith.

    Since we can't break laws we are probably doomed to suffer them and the damages they will systematically force upon us because we cant make the rules work for us ast enough.




    The path of the righteous man is beset on all sides by the inequities of the selfish and the tyranny of evil men.

    by xxdr zombiexx on Wed Feb 13, 2013 at 09:32:24 AM PST

    •  Really: we need an emergency OFF switch (1+ / 0-)
      Recommended by:

      for the republican agenda.

      They cannot be allowed to complete it.

      Americans won't get off the couch until after we all are wearing shock collars and have been micro-chipped and drugged into submission.

      But, better we end up zombie-fied couch-potatos than break a law to save our collective ass and fight back against an entirely needless bullshit situation.

      Sad but true.

      Never break the law.

      The path of the righteous man is beset on all sides by the inequities of the selfish and the tyranny of evil men.

      by xxdr zombiexx on Wed Feb 13, 2013 at 09:38:04 AM PST

      [ Parent ]

  •  There is an element of truth to it (1+ / 0-)
    Recommended by:

    The fact is that Fannie and Freddie helped subsidize the prop up the worst of private sector fraud.
      Plus, the Fed's ultra-low interest rates enabled the liquidity to be there for all those no-no mortgages.

      Without government subsidies in the housing market, the private sector couldn't have blown the bubble.

    ¡Cállate o despertarás la izquierda! - protest sign in Spain

    by gjohnsit on Wed Feb 13, 2013 at 09:34:32 AM PST

  •  I believe that the Housing Crisis (3+ / 0-)
    Recommended by:
    annominous, Mr MadAsHell, JerryNA

    was caused by greed and stupidity, about 50-50%.

    The banks were obviously greedy.  They loaned money on a large scale to people who had no verifiable way of ever paying it back.  "They" didn't care, because "they" were the individuals that were getting commissions and bonuses for their metrics of selling loans.  For the most part, they would have their money and be moved on before the shit ever hit the fan (as far as they knew).  I watched a lot of people, who I know could not afford their houses, buy houses that they shouldn't have been approved for.  This is clearly the banks' fault.

    The buyers bare 50% of the responsibilty for this as well.  They sell cigarettes.  They warn you that they can kill you.  But, it's up to you to decide whether you are dumb enough to light up.  I believe that people have a responsibility to know what they can and cannot afford.  Admit it, deep down, we all know.  I know that I can't afford a $100,000 Mercedes S-Class,...but I could get approved for the payment, and the dealer will sell it to me.  Who's fault is that if I buy it?  Those buyers, who took on ridiculous junk-terms mortgages had to know deep down that they couldn't really afford it.  But, they went into denial, and rationalized that if their neighbor up the street could do it, so could they.  This phenomenon was never worse than in CA, FL, and Las Vegas, paradises where everybody has to keep up with the Joneses.

    And, don't tell me that these people were uneducated, naive, or "taken advantage of".  All had the terms of their loans explained to them (ever been to a closing?), and lit up anyway.  In fact, it's not really poor, undereducated, vulnerable people who were losing their homes who's deflated property values blew up the market.  It was middle and upper-middle class people who did it.  The market can survive a lot of $90,000 purchases suddenly being worth $50,000.  What it can't survive is a lot of $1,000,000 purchases suddenly being worth $300,000.  Poor people weren't buying $900,000 condos in Las Vegas, I  don't care what mortgage terms were offered.

    As for Rubio, I actually thought he did very well for the first half of the speech. He seemed to get off schedule, and start to rush about midway through.  That caused him to get nervous and sweat and have to take a drink.  But, on presentation, he seemed sincere and earnest.  His speaking style is A LOT better than McCain, Romney, or Ryan.  And, he has that middle class immigrant back-story for cover.  He's still a relative rookie on the national stage.  I expect that if they keep him front and center for the next three years, he'll get better and the nervousness will be gone with time.

    That said, the idea that Fanny and Freddie and forced loans to minorities alone caused the crisis just doesn't hold water, no matter how nervous or sweaty you get.  


    •  ARMs and no interest loans were pushed (2+ / 0-)
      Recommended by:
      Russycle, JerryNA

      People could afford no interest loans or 5 year arms and they were told they were financially savvy to take out such loans.  For most people it was not greed.  It was the desire to own a home. They followed the wisdom being spewed on the financial talk shows.  The common wisdom at the time was “oh…most people only own their first home for seven years so take out a no interest loan and let the house appreciate. When you sell in five years you can take all the appreciation and put it into your next house.  The market always goes up.”  Remember all the house flipping shows.  Most people thought that house prices would never fall so if you got into trouble you could just sell.

      While I am sure some people were greedy most people were living within their means at the time of purchase.  They could make an interest only payment on time every month.  

    •  I agree about Rubio... (1+ / 0-)
      Recommended by:

      He did OK at first, lying like a dog but doing it well, then kind of jumped the tracks.

      Not so much about the mortgage thing.  Everyone wants to own a home, and when wages are flat but home values rocketing, the longer you wait to get in the worse off you are.  So when a nice, smart person offers you a plan to get into a house and use its ever-increasing equity to help you afford it, it isn't greedy or stupid to take them up on it, especially if everyone else is doing.  Most of us are amateurs when it comes to home buying, when the pros are telling you this is how it's done, what do you do?

      Sure, in hindsight it's easy to blame the buyers, but they got sold a bill of goods by an aggressive, well funded machine.  I'd lay the blame 90/10, the bankers knew exactly what they were doing, that's why they sliced and diced the mortgages and sold them off.

      I don't know what's been trickling down, but it hasn't been pleasant---N. Pelosi

      by Russycle on Wed Feb 13, 2013 at 10:25:01 AM PST

      [ Parent ]

  •  Greed and speculation created the housing crisis (3+ / 0-)

    and those are both pretty much built-in factors of human behavior and of economic bubbles.  

    Government failed to PREVENT it, and that happened mostly on GWB's watch.   However I have no optimism that a different administration would have been able or willing to reign the obscenely large financial institutions and their risky "products".  

    "The extinction of the human race will come from its inability to EMOTIONALLY comprehend the exponential function." -- Edward Teller

    by lgmcp on Wed Feb 13, 2013 at 09:35:45 AM PST

  •  A lot of technical reasons but it boilded down (2+ / 0-)
    Recommended by:
    annominous, MKSinSA

    to greed.  Plenty of blame to go around.  Greed by the buyers, sellers, bankers and anyone else involved in the process.  

    Never argue with an idiot. They will drag you down to their level and beat you with experience.

    by thestructureguy on Wed Feb 13, 2013 at 09:36:27 AM PST

  •  I agree with the point but (0+ / 0-)

    I was troubled by the lines in Obama's speech about making home loans more available. That seemed like the pathway to more subprime lending.

  •  Deregulaton and greed. (0+ / 0-)

    Deregulation: I blame McCain and Phil Gramm, but recall that Clinton helped them. There were a lot of deregulators in congress in the 90s and 2000s.

    Greed, though ... that's different. You can't simply blame the banksters and deregulators and their propagandist puppets.  It takes a greedy multitude to make a bubble.

  •  The government needs to be whatever size it needs (4+ / 0-)
    Recommended by:
    lcbo, Russycle, Brooke In Seattle, JerryNA

    to be. In the case of Deep Sea Horizon, it needed to grow to include its own experts and specialists and reclamation workers. In the case of the mortgage mess, the gov't needed to grow to have more FBI agents with forensic accounting abilities. Regarding the various wars we have, the gov't needs to grow to accommodate its veterans and their needs. This does not mean it has to remain static in size, neither getting larger nor smaller, it means that the gov't has to manage activity within its purview effectively.

    Our gov't is not doing that. Because......Congress and Obama and SCOTUS.

    Right now the gov't needs to grow because of unemployment, our crumbling infrastructure and climate change. It could shrink if we got single payer. You know the Republicans would grow it if they got in; probably in ways we would not like.-->See: Iran.

  •  As Usual, The Truth Is Somewhere In Between (1+ / 0-)
    Recommended by:

    This is a HUD policy brief from 1995. It begins what is the

    National Homeownership Strategy, an unprecedented public-private partnership to increase homeownership to a record-high level over the next 6 years.
    Here are just some of the stated goals of the "National Homeownership Strategy"
    MAKING FINANCING MORE AVAILABLE, AFFORDABLE, and FLEXIBLE.  The inability (either real or perceived) of many younger families to qualify for a mortgage is widely recognized as a very serious barrier to homeownership. The National Homeownership Strategy commits both government and the mortgage industry to a number of initiatives designed to:

    * Cut transaction costs through streamlined regulations and technological and procedural efficiences.

    * Reduce downpayment requirements and interest costs by making terms more flexible, providing subsidies to low- and moderate-income families, and creating incentives to save for homeownership.

    * Increase the availability of alternative financing products in housing markets throughout the country.

    Here "Robert Rubin Rewrites the Rules"

    Here, in 1999, even the New York Times was going "wait a minute"

    Fannie Mae Eases Credit To Aid Mortgage Lending Published: September 30, 1999

    In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

    ''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

    Here, in 2003, Barney Frank is saying that anybody who thinks there is a problem is basically just stupid.
    I want to begin by saying that I am glad to consider the legislation, but I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored enterprises we are talking about here, Fannie Mae and Freddie Mac, are not in a crisis. We have recently had an accounting problem with Freddie Mac that has led to people being dismissed, as appears to be appropriate. I do not think at this point there is a problem with a threat to the Treasury.

    The more people, in my judgment, exaggerate a threat of safety and soundness, the more people conjure up the possibility of serious financial losses to the Treasury, which I do not see. I think we see entities that are fundamentally sound financially and withstand some of the disastrous scenarios. And even if there were a problem, the Federal Government doesn't bail them out. But the more pressure there is there, then the less I think we see in terms of affordable housing.

    Both parties wanted to keep pumping air into the Housing Bubble, and both parties were too stupid, or too greedy, or both, to understand that housing prices could not keep rising at 10% per year simply because we all perceived that we were getting 'stuff' much cheaper.

    I won't be coming home tonight, my generation will put it right - Genesis 9:3

    by superscalar on Wed Feb 13, 2013 at 10:10:13 AM PST

  •  water (1+ / 0-)
    Recommended by:
    Brooke In Seattle

    stand ups have thier water set up better
    and he was doing stand up

    In all affairs it's a healthy thing now and then to hang a question mark on the things you have long taken for granted." Bertrand Russell (1872-1970)

    by lippythelion69 on Wed Feb 13, 2013 at 10:21:08 AM PST

  •  ZOMG! Commies, the FHA & Poland Springs! /nt (0+ / 0-)

    Warning - some snark above‽ (-9.50; -7.03)‽ "We're like a strip club with a million bouncers and no strippers." (HBO's Real Time, January 18, 2013)

    by annieli on Wed Feb 13, 2013 at 10:34:06 AM PST

  •  Alan Greenspan (1+ / 0-)
    Recommended by:

    I agree that Fannie and Freddie didn't create the housing crisis (although, in fairness, they did contribute to it somewhat).  But that fact doesn't get the federal government entirely off the hook.  In particular, any fair description of the causes of the housing crisis has to include Alan Greenspan's tenure as Chair of the Fed.  First, after he dropped interest rates to near-zero after 9/11 (which probably was the right thing to do), he kept interest rates artificially low for an excessively long time, in part because he wanted to help GWB win reelection in 2004.  That was a massive contributor to the real estate bubble.  Second, in addition to this massive monetary stimulus, he was one of the primary supporters of GWB's tax plan - he testified in Congress that it wouldn't create deficits (which of course was totally wrong, but very much helped the tax plan get through Congress).  A massive monetary stimulus plus a massive fiscal stimulus at the same time is the recipe for asset inflation (such as the housing bubble).  Last, Greenspan turned down the arguments of the Fed staff (and fellow Fed governor Ed Gramlich) that non-bank subprime lenders were out of control and needed to be regulated.  Greenspan, a disciple of Ayn Rand, just didn't believe in government regulation, and believed those firms' own economic incentives would be enough to keep them acting against the public interest.  We saw how that turned out (virtually all of those firms went bankrupt).  Anyway, Greenspan's unique combination of monetary, fiscal and regulatory contributions to the housing bubble make him, in my view, the single biggest contributor to the financial crisis.

  •  How do you tell (0+ / 0-)

    if one lie is bigger than another?  I'd really have a hard time choosing which specific lie he told about the government was the biggest.

  •  I Admit (0+ / 0-)

    That when Rubio came out with the "we were forced to make loans to people who bought too much house or didn't deserve a loan and that's what nearly destroyed America!" lie I honestly held my breath waiting for his pants to catch on fire. I really did, just for a second.

    Alas, it did not happen.

    Thus, thanks for this diary (since even here on Daily Kos we still have folks who raise that completely scurrilous, false, lyin' liar argument whenever the question of what happened to those who are in trouble on their mortgages, or lost their homes, and what should be done about it comes up around here.)

  •  I think Rubio is Right. (0+ / 0-)

    At the beginning of this whole mess, Obama failed to allow the money-center banks (and associated institutions) to fail, then seize them,  fire top management, wipe out the shareholders, eliminate CDO's and MBS's, restate the balance sheets of the money center banks, and then re-establish the money center banks as smaller entities, with new rules and responsibilities.  Sue the people who made the decisions for the excessive money they made that got us into this mess, thereby saving the economy from the ravages of Republican 'Austerity' and 'compromise' by Democrats for the past four years.

    Alas, for 20/20 hindsight.  

    ... the watchword of true patriotism: "Our country - when right to be kept right; when wrong to be put right." - Carl Schurz; Oct. 17, 1899

    by NevDem on Wed Feb 13, 2013 at 12:54:03 PM PST

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