Reliving The Clinton Years, Without The Peace And Prosperity

Paul Krugman:

The last time a Democrat sat in the White House, he faced a nonstop witch hunt by his political opponents. Prominent figures on the right accused Bill and Hillary Clinton of everything from drug smuggling to murder. And once Republicans took control of Congress, they subjected the Clinton administration to unrelenting harassment ó at one point taking 140 hours of sworn testimony over accusations that the White House had misused its Christmas card list. Now itís happening again ó except that this time itís even worse. [. . .] Anyone who remembered the 1990s could have predicted something like the current political craziness. [. . .] It will be an ugly scene, and it will be dangerous, too. The 1990s were a time of peace and prosperity; this is a time of neither.

Wishing away politics was never going to work. Good governance would have helped a lot. With the economy in shambles, what political card can the Dems play now? Negative branding is all I can see. Dems will need a Gingrich to play off of.

Speaking for me only

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    I found myself wondering (5.00 / 1) (#2)
    by Militarytracy on Mon Aug 30, 2010 at 11:14:24 AM EST
    if we lose the House or the Senate if maybe that would actually improve the governance of our President.  I doubt it though.

    Maybe (5.00 / 1) (#13)
    by jbindc on Mon Aug 30, 2010 at 12:32:48 PM EST
    For center-right Republicans.

    That was (5.00 / 2) (#20)
    by lilburro on Mon Aug 30, 2010 at 12:58:09 PM EST
    my thought during the health care debate.  We could've had a real discussion on what a majority is and how big the Democrats' victory really was.  I think we could've embraced passing health care through reconciliation sooner.  Perhaps Schumer would've been in the news more than Snowe.  Perhaps I'm dreaming.

    Well, (none / 0) (#9)
    by bocajeff on Mon Aug 30, 2010 at 12:07:33 PM EST
    It worked for Clinton.

    But, remember (none / 0) (#11)
    by christinep on Mon Aug 30, 2010 at 12:23:27 PM EST
    Clinton had an incredible assist from the megalomaniacal Gingrich. When Speaker Gingrich decided to push for government shutdown in 1995, the tide turned (with the public apparently aghast)...and President Clinton seized the opportunity. We cannot count on a monumental misplay from a Republican Speaker so soon again. What we can count on our interminable investigations to cover for the fact that little legislation of a forward-looking nature would be introduced. All I can think is: If some think Republicans seemed semi-reasonable in the likes of W, then comparing the active Congress of today to the know-nothing reemergence under a potential Republican leadership in the House will make the earlier comparison seem mild.

    That's what I was thinking (none / 0) (#40)
    by Militarytracy on Mon Aug 30, 2010 at 02:39:12 PM EST
    But then I reminded myself that Obama is still a different person than Clinton.  I cannot predict that he will take advantage of anything that Clinton would have.

    Another telling point in this article was this (5.00 / 3) (#3)
    by CST on Mon Aug 30, 2010 at 11:20:33 AM EST
    "And where, in all of this, are the responsible Republicans, leaders who will stand up and say that some partisans are going too far?"

    "almost makes one long for the days when former President George W. Bush tried to soothe religious hatred"

    The current republican party makes you miss having George W. Bush as their ringleader.  That's about as depressing a statement you can make about the current state of affairs.

    Issa needs to be told to sit down, shut up and (none / 0) (#4)
    by BTAL on Mon Aug 30, 2010 at 11:24:06 AM EST
    forget any/all ideas of subpoenas, investigations and the like.

    It's stupid politics for us and stupid governance.


    The reasonable Republicans (none / 0) (#16)
    by hairspray on Mon Aug 30, 2010 at 12:46:02 PM EST
    have either become independents ( a bit right leaning, however) or Democrats.  Most of the shift in registration that has come about in the last few years has been to the independent side.   I know a few moderate Rs who did switch to Democrats, but not many.  Their world view is a lot different than dems.  They believe that there are people who work for what they get and those that don't.  They are ones I think Obama would like to woo.  Hillary on the other hand fought for the work for what we got dems who switched to Republicans and now maybe in the independent column.  My opinion of course.  However, the fact that the GOP has lost membership and the independents and democrats have gained membership tells us something.

    What's even worse to me is how (5.00 / 4) (#5)
    by Anne on Mon Aug 30, 2010 at 11:43:47 AM EST
    handily the Obama administration has managed to associate so-called progressive governance with failure, abject failure, projected failure and lots and lots of misery for ordinary people.  For a long, long time, Republicans and conservatives can run on a very simple platform of "after what Democrats did the last time they had the power, why would anyone ever trust them to fix anything ever again?"  No one will look at how little the Republicans did to do better, they will just put the blame on the people who actually had the power to do better - and didn't.

    I guess Krugman has grown tired of waiting for Obama to do anything truly bold - this:  

    But my guess is that the president will continue to play it safe, all the way into catastrophe.
     is a sad commentary on the kind of transformation this president promised.

    It's just all so discouraging, not just for how things are now, but for the obvious truth that it isn't likely to get better anytime in the foreseeable future.

    Politics these days (5.00 / 1) (#7)
    by CST on Mon Aug 30, 2010 at 11:50:14 AM EST
    seems to have a short memory

    "For a long, long time, Republicans and conservatives can run on a very simple platform of "after what Democrats did the last time they had the power, why would anyone ever trust them to fix anything ever again?"

    The Republicans are rehabing their image just 2 years after sending us head first into this ditch.  It's not just about how they didn't help us do better, they sent us here.

    I imagine if republicans win again they will also screw up again soon enough.


    You're right, of course, about the (5.00 / 3) (#10)
    by Anne on Mon Aug 30, 2010 at 12:12:55 PM EST
    short memory, but I think at the heart of my comment is anger at how, for years to come, whatever label you want to use - progressive, liberal, left - for many of the initiatives, policies and legislation of this president and this Congress, will be associated with failure, and I can't get over the sneaking suspicion that this isn't all that upsetting to conservatives on either side of the aisle.  

    Obama has been a win-win for the GOP: they've managed to get what they wanted for the most part, without having to be responsible for the failures.  Yes, they helped get us into this ditch, but all people are thinking about now is that, instead of driving us out of the ditch, Obama's just dug us in deeper.

    We, on the other hand, will lose-lose no matter what and the race to the bottom continues apace; "hey, the other guy is worse" is not my preferred way to choose candidates.  I hope you have an actual good choice before you in this election - so many just do not that it sets the stage for more of the same mediocrity-bordering-on-insanity.


    my choice (none / 0) (#15)
    by CST on Mon Aug 30, 2010 at 12:42:32 PM EST
    for re-election this year is someone I would consider a conservative Dem (by MA standards), whom I don't really like - Stephen Lynch.  One of the reasons I dislike him this year is his opposition to the health care vote.  Something I think most people here would support.  But my main opposition comes from the fact that he's ardently pro-life (for all those wondering, no Stupak was not the reason for his opposition to HCR - he voted yes on the Stupak amendment).

    Primary Sept 14th, and I'll be voting for the "other guy" Mac D'Alessandro, since for now, he's saying the things I want to hear.

    I predict Stephen Lynch will hold the seat.  In any event, it will most likely stay blue(ish).

    With regards to the rest of your comment, I think right now both parties are deeply associated with failure.  And I'm not really sure where that leaves us.


    Interestingly, the (none / 0) (#18)
    by dk on Mon Aug 30, 2010 at 12:50:39 PM EST
    only reason I am going to vote for Lynch is because he opposed the final HCR bill.  While he voted for Stupac (as did Capuano, the very "progressive" MA Rep from Cambridge whom Coakley beat in the primary for US Senator), he was not part of the Stupac cabal, and his stated opposition to HCR was not a conservative one.

    I guess our votes will be cancelling each other out.  :)


    in the primary? (5.00 / 1) (#22)
    by CST on Mon Aug 30, 2010 at 01:02:03 PM EST
    he's consistently and stridently pro-life over his entire career, not just with respect to Stupak.  I would think all those votes alone would be a problem.

    Opposition to HCR trumps a consistently anti-woman voting record?


    The HCR bill is (none / 0) (#24)
    by dk on Mon Aug 30, 2010 at 01:07:19 PM EST
    anti-woman. You seem to support candidates who voted for it (or who said they would have) so I don't see how your and my position on that differ.

    For me, the tipping balance is that HCR is also anti-liberal from an economic standpoint.  Supporting Democrats who voted against it for non-conservative reasons seem about the best reason to vote for someone these days.


    About HCR: Actually--- (5.00 / 1) (#39)
    by christinep on Mon Aug 30, 2010 at 02:35:27 PM EST
    Not wanting to get in the middle of a Massachusetts discussion, yet, let me just add this perspective from a chat I had several months ago with my Congresswoman in Denver, Colorado's 1st congressional district. Diana DeGette, who led a significant portion of the floor fight on HCR and is certainly no slouch when it comes to both womens' and health issues (read: recognized as in the forefront for feminism as well as the pro-choice aspects of feminism) said with conviction in her voice that the HCR result was as good as they could get. You'll recall that she was the spokesperson for Pelosi for women's groups opposing Stupak's position. I happen to believe my Congresswoman in view of her trustworthy history on a number of matters, not the least of which is her effort in leading the charge for forward movement on stem cell research.

    Another thought about what the HCR adds: It is hard to refute the number of forecasts--including stickler CBO's--that substantially more people will be covered by health insurance as a result of this reform package. The coverage is estimated to come via more access, lesser costs, and--especially for those on the lower end of the economic scale (READ: more often than not, single women with children)--expanded Medicaid. When one takes just a bit of time to think about that, it is hard to escape the conclusion that this HCR should actually better the health care situation for a number of women, and should rightly be viewed as a pro-women act.


    No bill at all, particularly (5.00 / 2) (#41)
    by dk on Mon Aug 30, 2010 at 02:46:23 PM EST
    given how anti-liberal, and a net negative, this bill was, would certainly have been better than the anti-choice consequence, IMO.

    As for medicaid, the bill furthers the out-of-control increasing costs of healthcare by propping up for-profit health insurance with no meaningful regulation, i.e. against all rational examination of other systems throughout the world that have accomplished what we continually fail to do, which is an anti-liberal outcome if there ever was one.  The money to pay for the promise of expanded medicaid is not there.  This is because the Democratic leadership is not serious about expanding healthcare to people who need it.  When one takes just a bit of time to think about it (see, I can be condescending too....that's the easy part...it's always harder to assume that the person you are having a discussion with is not a moron), one might understand.


    Disagree, dk (none / 0) (#44)
    by christinep on Mon Aug 30, 2010 at 03:08:37 PM EST
    Mantras are fine; but, when HCR demonstrably moves the health insurance situation off dead-center (where it has been stuck for more than one generation), and moves it ahead an inch or two or three, it is correctly classified as fitting within the category of "better than the status quo" (IOW, in the direction of liberal.) Again, I have not seen a categorical refutation of the extension to more people--as demonstrated to CBO and to a number of health care experts--via expanding access to women.
    Look: When I read the mantra of "anti-liberal" and "net negative" as personal adjectives, it is exceedingly difficult for someone like me (a lifelong Democratic liberal) to throw up my hands and sound "condescending." I didn't mean it that way. My apology. I will state, however, that there are many LIBERALS who disagree with you for a number of reasons. For me, I agree with Cong. Diana DeGette (and a number of other Democratic women iberals in Congress) that this legislation was the biggest move forward that they could pass.  I and others may move to a compromise position earlier than you, but that does not mean that we will not continue to push forward at every opportunity. In my life, there have been many positive changes (especially in the roles we women can now aspire to); and, step by step, I expect to work for and see a lot more.

    In order to use the word "demonstrably," (5.00 / 4) (#46)
    by Anne on Mon Aug 30, 2010 at 03:29:15 PM EST
    you first have to have something to demonstrate - and I don't think you do.  Forecasts and estimates are not action, they are talking points.

    I recognize that this means that I can't claim these things won't move the whole mess to the left, but I haven't done that.  All I am claiming, I think, is that (1) insurance is not care, (2) women's rights were used as a bargaining chip, (3) there is no guarantee that the funding for Medicaid expansion or subsidies will ever come to be and (4) that the effort in no way, shape or form represented the Dems' best efforts.  None of those things moves us forward or to the left; it rearranged a system in such a way that it still favors industry interests over the interests of the people.


    We are both predicting (none / 0) (#49)
    by christinep on Mon Aug 30, 2010 at 03:40:52 PM EST
    with our different starting positions, Anne. You are correct in that my use of "demonstrably" was pushing it by giving CBO more credit than any forecasting group should have. I'm optimistic about it, obviously.

    No idea what you mean (none / 0) (#45)
    by dk on Mon Aug 30, 2010 at 03:16:40 PM EST
    by mantras, but the net effect of HCR was to the right.  That's what I mean by "anti-liberal" and "net negative".  Is mantra just something you don't agree with?  Why don't you just say you disagree?  Why imply that I'm about "mantras"?  

    "mantra" (none / 0) (#48)
    by christinep on Mon Aug 30, 2010 at 03:37:30 PM EST
    I used the word "mantra" to convey a negative impression about conclusionary phrases (as in the opinion phrase "anti-liberal.") Again, your OPINION is that HCR moved right; mine is that HCR moved us off center and to the left. Ours are both opinions. My repeating my position or your repeating your position in that way amounts to a chant or mantra.

    So why don't mantras (none / 0) (#50)
    by dk on Mon Aug 30, 2010 at 03:41:51 PM EST
    cover your conclusionary phrases?  You seem selective in the insults.  Seems to me the easiest way to avoid that is not to make the insults at all.  But that's just my opinion.

    I thought that the comment said (none / 0) (#51)
    by christinep on Mon Aug 30, 2010 at 03:49:00 PM EST
    we would both be chanting or using mantras. My repeating has the same effect as your repreating. I am sorry if I was unclear.

    Yet you started off by (none / 0) (#52)
    by dk on Mon Aug 30, 2010 at 03:52:11 PM EST
    comparing my supposed "mantras" against...well, as far as I can ascertain against what you were trying to put forward at fact, which I disagree with, that the HCR bill moved things in a liberal direction.

    So, that explanation doesn't seem to make sense.  But if you're apologizing that's fine with me.


    Thanks. (none / 0) (#54)
    by christinep on Mon Aug 30, 2010 at 04:04:12 PM EST
    We disagree on positions; and, both our positions appear to be grounded in opinion. That has been my point. But, thank you for the conversation.

    Health insurance is not health care, (5.00 / 8) (#43)
    by Anne on Mon Aug 30, 2010 at 03:06:21 PM EST
    so while millions more will be required to have coverage, there still is no guarantee that between premiums, co-pays and deductibles, actual health care will be in reach for way too many people.  Subsidies will be of some help in paying for insurance, at least up to the arrival of the day when the government decides it can no longer afford them, but again - insurance is not care.

    Expansion of Medicaid would be helpful, but there's no guarantee that the funding will exist, there's no uniformity from state-to-state, and unless the government intends to reward providers for accepting Medicaid patients, access is still an issue.

    It is hard for me to regard any legislation as pro-woman that legitimizes what amounts to denial of care to mostly poor women, and harder still for me to accept as pro-woman/pro-choice any politician who can treat women's reproductive rights as a bargaining chip.

    "This is the best we could get" doesn't fly with me.  I never saw a concerted, energetic, focused, effort that started from a position of strength, with the best plan and all ideas possible on the table; they started weak and finished weaker, and they chose to throw women under the bus to do it.  Your position always seems to be that they were so smart to know what they had the votes for, but to me, leadership means putting the best ideas out there, not taking them off the table and closing the door on them - to the extent of arresting concerned citizens with facts and information on their side who wanted to be heard before the Senate committee, and were summarily denied.

    The truth is that the word came down early from Obama, and almost everyone fell into line, and the result was a huge and undeserved bonus for the special interests, a few good things that may or may not ever come to pass; if it was "the best they could do," the only way that could be true is if you added, "for the industry," because that's where the lion's share of the benefit is going.


    I believe if you (5.00 / 2) (#53)
    by hookfan on Mon Aug 30, 2010 at 03:54:11 PM EST
    look at the actual utilization rates for health care, they're decreasing, i.e., less people going to Doctors, most likely due to expense. In fact a recent Dartmouth study titled Economic Crises and Medical Care Usage( --Anamaria Lusardi, Dept. of Economics at Dartmouth headed up the study) found our utilization rate has fallen off much greater than those countries with single payer, or single payer type programs in Europe. Coverage doesn't matter if people can't pay the premiums, or co-pays. Unemployment at such high levels certainly has an impact on that, as does states budget crises. . .

    I like your ideas, Anne (none / 0) (#47)
    by christinep on Mon Aug 30, 2010 at 03:30:16 PM EST
    Really. If I had my druthers, we would have a health care system more akin to Norway or Sweden. Let me suggest, tho, that our different experiences may lead us to different approaches towordslike "leadership" "compromise"  and "competence." And, as you know, there are many definitions for those words.

    On Leadership: Realizing that there are books written and courses given on the subject, I tend to start with JFK's "Profiles in Courage." There's the servant model and the get-out-in-front model. It may be the Health Care Reform issues required a bit of both. And, then, there is the "eye of the beholder." While I do not believe that "they were so smart," I do believe that our congressional reps know (or should know) how to count votes. It does come down to vote-counting and delivery. Clearly, here, the counters could count the reality of votes in the Senate and they could count the time & cost involved with reconciliation process. It may have been better to go with "reconciliation" at the outset; but, that is a tactical call to opine on for awhile and then let go.

    On "the best we could get:" Yep, there is a big gap between us here. My career mostly involved negotiation; so, instinctively almost, I look for a "move the ball forward" resolution in a stalemate situation. Get it in place; revisit later for add-ons. Other than in my spiritual life, I operate along the lines of "the best we could get" in these kinds of situations. People draw compromise lines differently. What I see here is an advance on the health care/insurance front that has been stymied by the right for years. In my estimation, HCR will be shown to have "moved the ball forward" significantly. That means a lot to me.


    and actually (none / 0) (#23)
    by CST on Mon Aug 30, 2010 at 01:05:54 PM EST
    I'm talking about this Stupak vote.  The one that put the amendment in the bill, not the final vote on the bill.

    While it's true Capuano voted for the final bill, he voted against including the Stupak amendment in the bill.  Whereas Lynch voted to include Stupak in the bill, but then voted against the final bill.


    That's just kabuki. (none / 0) (#25)
    by dk on Mon Aug 30, 2010 at 01:07:56 PM EST
    I'm confused (none / 0) (#28)
    by CST on Mon Aug 30, 2010 at 01:35:31 PM EST
    because in the past you've seemed pretty concerned with candidates that don't support a women's right to choose.  Stephen Lynch is very clearly that camp.

    It seems counter-productive to any future pro-choice agenda.  Was all of this kabuki as well?


    I am very concerned (5.00 / 1) (#30)
    by dk on Mon Aug 30, 2010 at 01:42:33 PM EST
    with candidates that don't support a woman's right to choose.  And anyone who voted for HCR, or who says they would have, does not support a woman's right to choose, in that the bill further restricted a woman's right to choose.

    So, we have two candidates.  One would have voted for a bill that restricted a woman's right to choose.  The other voted against it (and not for conservative reasons) but has supported anti-choice legislation in the past.

    It's obviously a difficult choice.  One option would be not to vote for either one (which of course I'm also considering).  But one, in the end, voted against the most significant anti-choice legislation of this legislative session, which was also anti-liberal in many other respects as well.  Seems it would make sense to vote for him over the guy who brags about how he would have voted for such a bill if he had been there.


    except (5.00 / 1) (#34)
    by CST on Mon Aug 30, 2010 at 02:15:14 PM EST
    he actually voted for the anti-choice portion of that legislation and was partly responsible for having it included in the final bill.  It wouldn't have been in the bill to begin with without support from Dems like Lynch.

    I think someone who says they don't support a women's right to choose, and has consistently shown over the years his willingness to vote to restrict a women's right to choose, is more anti-choice than someone who has not done those things.

    Frankly, I think it makes sense to vote for the candidate that you think will better represent you on those issues in future votes.  If you think that person is Steven Lynch, fine, but that is kind of astonishing to me considering his record.


    Everyone who (none / 0) (#37)
    by dk on Mon Aug 30, 2010 at 02:22:45 PM EST
    voted for HCR in the end is responsible for an actual law on the books that furthers anti-choice restrictions.  It is just not factual to state that Lynch's opponent in the primary is pro-choice if he is running on the platform that he would have voted for the HCR bill that passed.  

    As far as the last legislative session is concerned, I feel I was represented by someone who voted no on a bill that was, as far as the substantive aspects were concerned, profoundly anti-liberal.  If you could find me a pro-choice candidate, I'll certainly re-evaluate my decision.


    The Demos have been in (none / 0) (#14)
    by jimakaPPJ on Mon Aug 30, 2010 at 12:40:53 PM EST
    control since 2/2007...

    And have made the situation worse.


    I guess (5.00 / 1) (#21)
    by CST on Mon Aug 30, 2010 at 12:58:48 PM EST
    you believe in the powerless president meme.  Especially when compared to a one vote majority in the senate (and that's including Lieberman which is a highly debatable inclusion) In any event, while I don't think Georgie was completely powerless then, I do think he just didn't give a $hit and spent the last 2 years mostly on vacation.

    Besides, all of the deregulation and housing "crazy" had already happened by that point.  Alan Greenspan and co. had done their damage.  By the 3rd quarter of 2006 housing prices were already falling.  By June of 2007 (just a few months into Dem shared-control) Bear Stearns had already lost most of it's value - something that started in 2006.  Repubs had already put the chess pieces in place.  The crash just took some time to reach full bore.  And yes, the Dems retain some responsibility for not adressing the crisis.  But the republicans and republican ideology is what sent us over.  

    Anyone paying attention to anything knew in 2006 that there was a serious housing bubble.  Consider this article written in January of 2006.

    "Part of the rise in housing values since 2000 was justified given the fall in interest rates, but at this point the overall market value of housing has lost touch with economic reality. And there's a nasty correction ahead. "

    emphasis mine.


    The red flags were being waved well before (none / 0) (#29)
    by BTAL on Mon Aug 30, 2010 at 01:40:24 PM EST

    Have you forgotten the 2002 GWB initiated regulatory reform of F&F?

    New Agency Proposed to Oversee Freddie Mac and Fannie Mae

    Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

    ''These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.''

    and then (5.00 / 1) (#31)
    by CST on Mon Aug 30, 2010 at 01:56:49 PM EST
    they spent the next 4 years telling everyone to buy buy buy, and that there was no housing bubble.  They were really waving that red flag...

    Fannie and Freddie were not the cause of the subprime issue.  Throughout the bubble they consistently lost market share in that area to private firms - since they were subject to greater oversight and stricter regulations.

    And in fact, it's primarily rich people who are walking away from mortgages.


    Oh really? Fannie and Freddie clean? (none / 0) (#32)
    by jimakaPPJ on Mon Aug 30, 2010 at 02:09:08 PM EST
    ''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

    Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

    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.''

    NY Times Sept 9 1999


    Your article addresses "rich" people (none / 0) (#35)
    by BTAL on Mon Aug 30, 2010 at 02:19:42 PM EST
    walking from second/investment homes which were not sub-prime type loans.  

    Also from your article:

    Fannie Mae and Freddie Mac, the two quasi-governmental mortgage finance companies that own most of the mortgages in America with a value of less than $500,000, are alternately pleading with distressed homeowners not to be bad citizens and brandishing a stick at them.

    In addition to the above referenced 1999 and 2002 timepoints, there was also the 2005 effort that was killed in Senate committee.



    yes (5.00 / 2) (#42)
    by CST on Mon Aug 30, 2010 at 02:47:45 PM EST
    it addresses rich people.  Because they are the people walking away from mortgages en masse right now.  Not the "sub-prime" type loans.

    Who controlled congress in 2005?

    And again, all your an Jim's moaning about Fannie and Freddie loaning to more poor people, in no way indicates that that was what caused this crisis.  The fact is, wall street sank fannie and freddie, not the other way around.

    And nothing either one of you has said addresses Alan Greenspan and the Fed policies at that time.  Or the fact that the bulk of subprime loans during the boom came from Wall Street.

    They make a convenient government scapegoat, but are fairly irrelevant to the actual situation.


    F&F were buying the bulk of Alt-A MBSs (none / 0) (#55)
    by BTAL on Mon Aug 30, 2010 at 04:05:38 PM EST
    creating the demand.  As stated below, you create the demand the market will respond.

    How did we get here? Let's review: In order to curry congressional support after their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of "affordable housing." They became the largest buyers of subprime and Alt-A mortgages between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. In doing so, they stimulated the growth of the subpar mortgage market and substantially magnified the costs of its collapse.

    It is important to understand that, as GSEs, Fannie and Freddie were viewed in the capital markets as government-backed buyers (a belief that has now been reduced to fact). Thus they were able to borrow as much as they wanted for the purpose of buying mortgages and mortgage-backed securities. Their buying patterns and interests were followed closely in the markets. If Fannie and Freddie wanted subprime or Alt-A loans, the mortgage markets would produce them.



    creating demand (none / 0) (#58)
    by CST on Mon Aug 30, 2010 at 05:00:28 PM EST
    like with 1% interest rates?

    Alan Greenspan.

    I would like to see one of you address his massive role in creating and escalating this entire crisis.

    Fannie and Freddie lost market share in subprime loans between 2002 and 2007 to private firms.

    And you also refuse to address the fact that this is much much more than a subprime issue.  The fact of the matter is, most forclosures are not coming from subprime loans.


    The demand was for the MBSs (none / 0) (#60)
    by BTAL on Mon Aug 30, 2010 at 05:38:28 PM EST
    When you have the "implied" guarantee, even at 1% (but the subprimes were much higher than 1%), then it becomes the Walmart business model - volume.

    The date of the article is 9/11/2006 (none / 0) (#33)
    by jimakaPPJ on Mon Aug 30, 2010 at 02:11:47 PM EST
    You almost have to wonder which 9/11 hurt the country worse... 01 or 06...

    that (5.00 / 1) (#36)
    by CST on Mon Aug 30, 2010 at 02:19:59 PM EST
    says absolutely nothing about their actual effect on the subprime crisis.  It just says that they were lending to poor/black people.

    2 things

    • rich people are the ones walking away from mortgages en masse.

    • Fannie and Freddie were not responsible for the vast majority of (or increase in) subprime loans, they were overwhelmed by competition in that market from the private sector.

    The fact that some people were concerned about Fannie and Freddie at one point does not mean that Fannie and Freddie were actually responsible for this mess.

    It is where the ball started rolling (none / 0) (#38)
    by BTAL on Mon Aug 30, 2010 at 02:35:13 PM EST
    In 1995, the GSEs like Fannie Mae began receiving government tax incentives for purchasing mortgage backed securities which included loans to low income borrowers. Thus began the involvement of the Fannie Mae and Freddie Mac with the subprime market.[111] In 1996, HUD  set a goal for Fannie Mae and Freddie Mac that at least 42% of the mortgages they purchase be issued to borrowers whose household income was below the median in their area. This target was increased to 50% in 2000 and 52% in 2005.[112]  From 2002 to 2006, as the U.S. subprime market grew 292% over previous years, Fannie Mae and Freddie Mac combined purchases of subprime securities rose from $38 billion to around $175 billion per year before dropping to $90 billion per year

    The 1982 Alternative Mortgage Transactions Parity Act (AMTPA) allowed for more "creative" type mortgages (ARMs etc) but banks still required all the previous borrower standards (credit, down payment, income, etc.)


    I think Obama has been steady and (5.00 / 2) (#6)
    by hairspray on Mon Aug 30, 2010 at 11:44:42 AM EST
    reasonable in his tenure.  Unfortunately he should have been more bold. The times called for it. Could it have been any worse?  Has he appointed Elizabeth Warren yet?    Everyone I speak to thinks he hasn't shown the leadership needed at this time.  I don't know if it is too late but I cringe at the idea of a Republican congress.  The situation will get real ugly, fast.

    It isn't worse yet. (5.00 / 1) (#59)
    by masslib on Mon Aug 30, 2010 at 05:15:57 PM EST
    I suppose Krugman means worse in the sense of the whackado birthers(which really is disgraceful), but Obama has yet to experience a political witch hunt worse than Clinton's.  When his wife is accused of murdering her long time friend, and Obama is impeached without committing an impeachable offense, then we can say it is worse, and I hope and believe it won't get that bad for the simple reason, it didn't work politically for the Republicans the last time around.

    Imagination (none / 0) (#1)
    by Dadler on Mon Aug 30, 2010 at 11:10:42 AM EST
    That's our only hope.

    And neither political party has an ounce of it.


    Reliving (none / 0) (#8)
    by vicndabx on Mon Aug 30, 2010 at 11:58:55 AM EST
    I remember the same exact thing - projections of doom and gloom, then Bill and team kow-towed somewhat to Wall Street.  We had the dot com boom and then tada!  Great economic times.  I seem to remember a lot of Democratic carping as well.  There were a number of folks on the left who bailed on Bill.  Too smart for their own good.

    As Paul concludes, development of a full-blown plan replete w/details and endorsements of major economists/institutions, i.e. offense, is what the Dems should be doing.  

    But (5.00 / 1) (#12)
    by jbindc on Mon Aug 30, 2010 at 12:31:55 PM EST
    Obama is no Bill Clinton.  Don't expect a repeat of the 90's - especially with the housing market and the credit crunch.

    In my local paper today I read (5.00 / 2) (#19)
    by hairspray on Mon Aug 30, 2010 at 12:52:47 PM EST
    about the failure of a governmnet program costing billions.  The analysts stated that the money would have been better used if it had simply been given to the people in the form of vouchers. I can't help thinking that had the HOLC program been instituted instead of the bank bailouts we might have a more safisfied populace. Krugman was for it and he has been right so far.

    I don't. (none / 0) (#17)
    by vicndabx on Mon Aug 30, 2010 at 12:50:24 PM EST
    and totally agree that all the venture capital that funded .com development is not as freely flowing.  There's nothing (so far) that provides such quick ROI as .com did.

    Calling the Clinton terms... (none / 0) (#26)
    by kdog on Mon Aug 30, 2010 at 01:11:35 PM EST
    "peaceful" is very misleading, considering Clinton amped up the war on marijuana users like no president since Nixon.  

    For a sub-section of America, those years were anything but "peaceful".  A minor quibble perhaps, but a war is a war, and St. Bill had his drug war "surge".  

    And let's also not forget the Balkans, Somalia, and the bombing runs over Iraq.

    President Clinton's refusal to (none / 0) (#56)
    by KeysDan on Mon Aug 30, 2010 at 04:17:35 PM EST
    lift the ban on federal funding of needle exchange programs disturbed the peace of many.  An overwhelming body of evidence existed  (peer-reviewed studies in JAMA, J of Acq. Immune Def. Syndrome, 1994; Nat. Acad of Sci, 1995; and NIH Consensus Report) determined that such programs reduced HIV incidence without increasing drug use.

    However, in 1998,  Clinton "drug czar" General Barry McCaffrey dissuaded the president shortly before the ban was to be lifted, causing HHS Sec Donna Shalala to abruptly announce that, yes, the exchange program would work as stated, but federal funds would not be available.  (cf.  Vlahov et al. Am. J. Epidemiol. Vol 154, No. 12, Suppl. 200l)


    Thank you K.D... (none / 0) (#57)
    by kdog on Mon Aug 30, 2010 at 04:53:50 PM EST
    the domestic war pork in the infamous crime bill, the economic war of carrying on the Reagan/Bush gangster-ization of the markets, whatever the CIA was up to...one could assemble quite a list.

    Though in his defense, he charged a higher vig for the government's protection racket services and covered costs for awhile...that was decent of him.

    Return to the Clinton years?  Better, but not good.  An economic jumpstart like the internet in the 90's would be cool I guess.  


    Outlook? Very predictably very dim. (none / 0) (#27)
    by RonK Seattle on Mon Aug 30, 2010 at 01:28:45 PM EST