December 11, 2009

Who's to blame: Clinton or Bush?



From Dr. Housing Bubble, a graph relevant to the problem of allocating blame for the Housing Bubble/Crash between the Clinton and Bush Administrations.

My published articles are archived at iSteve.com -- Steve Sailer

71 comments:

Anonymous said...

Thanks Steve. No pulling the lever for R for me. Fool me twice...I won't be fooled again!

Anonymous said...

Senor El Presidente George Walkeros Rove-Guantanamo Bellisimo Bush.



Its amazing how teflon Bush financially appears to be. You are about the only one correctly pinning the tail on the donkey here. Hardly anybody else mentions the giant increase in weak home and equity loans were post-Cheney/Rove/Bush admin.


Here we are with 10.2 percent unemployment, a 787 billion dollar Wall Street Bailout, record numbers of Americanos' on food stamps (one in eight Americans, one in four children), 15.7 unemployed Americans and 8 million Employed illegals, falling housing prices (a good thing IMO), record debt via T-bills held by China/Japan/Saudi/Russia, and record trade defecits, an occupation of Iraq and escalating occupation of Afghanistan that has cost around a trillion (real money when you start spelling the "illions" with a "t")------and hardly anybody is willing to point their finger at Jeb Bush's brother.


BTW (and unrelated) ----Has anyone ever considered to start calling SWPL's, "self-hating whites". I think that would be very effective in getting under their skin.


......awaiting your "Avatar" review.

Vernunft said...

Bush also leads the blame race for "being President during years that start with the numeral '2'"

Anonymous said...

I don't get it. How could a graph starting in 1998 possibly compare Bush and Clinton? Maybe you want to compare D vs R controlling Congress?

Kylie said...

I don't need to see the charts to assign the blame to George "We Must Not Allow A Homeownership Gap!" Bush.

I wish to heaven he'd confined himself to worrying about mineshafts, fluoridation, etc.

Simon said...

This is why I wanted Hillary Clinton for President. The Clintons may be formal adherents of an evil cultural Marxist belief system, and Bill has repeatedly said he looks forward to whites becoming a minority in the US. But in their hearts they are first and foremost technocrats, measuring their self worth by competence and avoidance of blatant idiocy. Bush's measure of self worth *is* his visceral attachment to blatant idiocies. Hillary was I suspect the best chance the US had to avoid total disaster (McCain being at least as bad as Bush), and you blew it.

Henry Canaday said...

I think Pete Wallison at AEI would point out that Fannie and Freddie became much more active in buying or guaranteeing junk housing debt in 2005 and 2006, making a market for bad loans and keeping the bubble rolling. And these two agencies were essentially trying to please Democrats in Congress

Both the Clinton and Bush Administrations, as well as Congress, were trying to pursue a Goldilocks Affirmative Action policy in housing, just enough loosening of standards to increase minority ownership, but not enough to crack the system. But you can’t really control all the consequences of these kinds of policies. Once you get the ball rolling, you create a lot on interests that will push very effectively to send it out of control.

Anonymous said...

Um, there's going to be a lag between the time you put the policies in place and the time the policies take effect. I guess you can blame Bush for not reversing what Clinton did...

RandyB said...

Who's to blame is the educational and media gatekeepers that keep the lie going that minorities live in an on-goingly oppressive society; so that both parties race to give stuff to them because they deserve it.

Anonymous said...

A bit off-topic, but NOBODY should get a "zero-down" mortgage. It makes it too easy for people to just walk away from things. After all you have no down payment stake to lose. This is financial craziness.

Anonymous said...

A better question. Who is to blame, Greenspan or Bernanke.

Or you might say the question is as dumb as asking who is to blame for 9/11, Clinton or Bush. The correct answer is both.

Ronduck said...

It's also possible that decisions made by the Clintonites in the final year of Clinton's term could have laid the foundation for the housing bubble. According to the book Rome Wasn't Burnt in a Day the Republicans in congress were morally defeated by the whole Lewinsky-impeachment affair and basically rolled over for whatever Clinton wanted for the rest of his term. That and the money printed by Greenspan after the tech bubble burst fed the mania.

dearieme said...

Given the inevitable time lags in government action, clearly the fault is Slick Willie's. Mind you, what a pair of duds they were - a curse on them both. And there's no sign that O is any better.

airtommy said...

I don't get it. How could a graph starting in 1998 possibly compare Bush and Clinton?

By the time my post gets published, there will probably have been a flood of responses.

Clinton was President through the end of 2000, so the first 3 years of the chart are Clinton and the rest is Bush.

anony-mouse said...

You wouldn't mind putting in a graph of 'California buyers of stock in revenue/profit-free tech companies' would you?

Yes there were more people involved in the housing bubble than the tech bubble (although all the houses in California are at least worth something), but that's just because stupid people are more apt to buy a house than stock.

Of course the main thing to notice about both is that Californians were heavily involved in causing both (since we want someone to blame for human folly).

Anonymous said...

"and hardly anybody is willing to point their finger at Jeb Bush's brother."

Are you kidding??? Lots of registered Repubs, those that consider themselves conservative, were (and still are) furious with Bush about his profligate spending and about his immigration policy...rather his LACK of one.

That is why this group was so disturbed by the selection of McCain as their standard-bearer because he'd be no better than Bush in fiscal matters.

Of course, this group of conservatives is often ignored by the press. They prefer putting the spotlight on and beating up on the other conservatives in the party--the "social conservatives" as they are called.

The two groups, while not the same, do have a not unsubstantial overlap, but the libs and elites and, of course their messengers, the press, prefer to continue to link "Republican" and "conservative" with only those whom they believe can be caricatured as hayseed anti-gay, anti-minority, anti-illegal aliens, anti-intellectual, pro-God, etc.

It would be nice to find a conservative candidate bold enough, articulate enough to explain the link between the social and fiscal issues.

It would take someone with Pat Buchanan's guts but someone more urbane than the fiery Irishman, someone who, when the libs called him "racist," could respond without his face turning red, someone who could firmly, but calmly say, "No, you're the racists...your political philosophies and policy creations illustrate that you believe you are Daddy to people whom you believe to be your inferiors... and you enjoy the sense of power that brings. I am going to pull the mask off you in this campaign. I want the American people to be ready for that."

Man would I love to hear a candidate say that in a Presidential debate... and mean it.

Then, they ought to pick one or two high-profile politicos, like Reid-Pelosi-Frank and one high profile non-politico, like a Michael Moore Hollywood sort and little by little paint the psychological profile of people like that. I'd liken them to the Jim Jones and Elmer Gantrys of the world--they feed off making others think the only way to salvation is through them.

Anonymous said...

Before you shift too much blame on Bush, you should read this NYT article from 2003:

http://www.nytimes.com/2003/09/11/business/new-agency-proposed-to-oversee-freddie-mac-and-fannie-mae.html?scp=1&sq=&pagewanted=2

The Bush administration had decided that the existing regulatory structure that covered Fannie Mae and Freddie Mac had failed, resulting in overly risky portfolios being accumulated by those agencies. Bush proposed a much stricter regulatory structure that was subsequently defeated by the Democrats. To quote from the NYT article:

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."

Anonymous said...

Which king is to blame for the crop failure?

Middletown Girl said...

Clinton era: dot.com idiocy.
Bush era: housing idiocy.
Obama era: stimulus idiocy.

American people: always voting for new forms of idiocy.

Middletown Girl said...

Clinton was a Bubba, Bush was a Bubba. Americans are Bubbas. Bubbas love bubbles as they promise get-rich-quick fantasies.

Middletown Girl said...

I know we like to bash 'compassionate conservatism' but could Bush have won in 2000 running on a hardline conservative line? Similarly, could Clinton have been re-elected in 2004 if he didn't pose as a New Kind of Democrat? Most Americans are centrists. Center-right, center-left. So, everything gets watered down. How many votes did Buchanan get, btw? How far did Ron Paul get in the 2008 primaries? Of course, Obama is, at heart, on the far left, but his image and style has been centrist--with the help of liberal media.

So, we have to blame the people and not just politicians. American people want everything: lower taxes yet more freebies from government. America as a badass superpower around the world yet no US casualties in wars.

Middletown Girl said...

The housing bubble would have happened--even on a larger scale--had Gore been president from 2000 to 2008. Bush was following a liberal policy made palatable to business-oriented conservatives by allowing Wall Street and banks run the show--and raking in gazillions in profit while the going was good.

And conservatives--not just Bush but most of them--came to embrace a ridiculously materialistic notion of capitalistic ethos. They thought that people will become more responsible and enterprising IF they own private property. So, expanding ownership of homes would make poor people more conservative, more grateful, more invested in the community and nation. One problem: the real key to capitalist values is the striving and struggling to own property than simply owning property. The pride of ownership comes from the hard work, the struggle, the dedication. Capitalist ethos should be 'spiritual' than materialistic.
A man who loses all his wealth can still have capitalist ethos if he maintains his work ethic and strives to rebuild his life. A man who wins the lottery and lazes around a swimming pool has no capitalist ethos though he may own a huge mansion and fancy cars. A poor man with capitalist ethos can be rich one day. A rich person with inherited wealth but without capitalist ethos will likely head for the bottom in due time.

An athlete prizes his or her medal because he or she worked for it. If medals are handed out to all athletes, there is no pride in achievement, no incentive to train harder to win more medals.

So, the conservative idea behind 'the ownership society' got it backwards. It put the cart in front of the donkey. Poor people who got to 'own' homes felt no pride of ownership, sense of obligation or responsibility. They hadn't worked for their homes. They were essentially given free homes in which to live as de facto renters as long as the housing prices were on the up and up. When the market went south, they just walked away without shame, guilt, or any sense of obligation.

Anonymous said...

But isn't it common knowledge that congress refused to heed warnings about this problem? I guess 'Bush' refers to any governmental inaction. In that vein let's now refer to Barney 'Bush' Frank by his proper name.

Eileen said...

OT: Guardian's Evolutionary Agony Aunt

HBD going mainstream?

Anonymous said...

......awaiting your "Avatar" review.

Leave that to Leonard Maltin. Where's the review of "A Serious Man"?

tommy said...

It looks as if the first significant rise in the line for first-time homebuyers occurred shortly after Bush assumed office.

Things really accelerated around the middle of 2002.

Any guesses as to what happened around these times?

Steve Sailer said...

Yes, the October 15, 2002, White House Conference on Increasing Minority Homeownership in which Bush denounced as down payment requirements as the foremost cause of the racial gap in homeownership rates. That sends a signal to his underlings, federal regulators, and to interested parties, such as Countrywide, Ameriquest, New Century, and Quick Loan, what the boss is thinking.

tommy said...

That sends a signal to his underlings, federal regulators, and to interested parties, such as Countrywide, Ameriquest, New Century, and Quick Loan, what the boss is thinking.

It's hard to say from the graph if the trend line spikes up in October, though it is certainly possible. It may not matter: regulators and well-connected con artists like Mozilo (Countrywide) and Arnall (Ameriquest) may have been in the loop even before any such public announcement. The timing is about right.

Dr. Housing Bubble believes the first bump corresponds with Greenspan cutting interest rates in 2001, but it looks to me as if the line was already trending up by late 2000.

tommy said...

I have been asking about the 2000 trend increase and wasn't convinced that the interest rate cut in 2001 was the whole story. Maybe this story, mentioned by a commenter at Dr. Housing Bubble, from mid-2000 provides part of the answer:

The nation's largest supplier of money for mortgages and eight local lenders are joining together to help new immigrants buy homes in the nine Bay Area counties, the nation's most expensive property market.

San Francisco, Marin, San Mateo, Alameda, Contra Costa, Santa Clara, Solano, Sonoma and Napa counties form one of eight designated regions for the pilot program created by the Federal National Mortgage Association, the federally chartered company that supplies tens of billions of dollars annually for home mortgages.

The new program means that immigrants who are in the country legally and have applied for permanent resident status can get home loans with as little as a 3 percent down payment for single-family homes and condos and 5 percent for two-family homes.

The loans will be offered at market rates, said Fannie Mae's Bill Chandler. That represents a major break from the experience of many immigrant families that buy homes. They often fall victim to unscrupulous lenders who charge them exorbitant rates, include hidden fees or require big balloon payments.

``We want all residents, including new immigrants, to be homeowners,'' Rep. Nancy Pelosi said at a San Francisco City Hall news conference to announce the program. ``Housing in this area is so exorbitant. This is one way to address that.''

The new program offers immigrant families greater flexibility in qualifying for loans, which often elude them today. For instance, participating lenders have agreed to count cash rent payments from extended family members as income that could help an applicant qualify for a loan.


Because the best way to deal with exorbitant NoCal home prices is to increase demand!

tommy said...

From the previous story:

Local lenders in the program are CalFed/First Nationwide Mortgage, Fremont Bank, Chase Manhattan Mortgage, Citicorp, Countrywide Home Loans, First Republic Bank, GMAC Mortgage and North American Mortgage.

Question: How did Ameriquest and other lenders not involved in Fannie Mae's low down payment program in NoCal respond?

Whiskey said...

Steve, that's intellectually lazy. Clinton would certainly have done what Bush only half-heartedly fought, but was constrained by a Republican Congress.

The President does NOT set Fannie/Freddie policy, that is set by Congress and by laws passed by the Congress. Bush to his credit did warn about liar loans and loosening of credit, and proposed legislation, but to his discredit was backed off by Rangel, Pelosi, Dodd, and Conyers who called him "racist" for suggesting that. Clinton had proposed similar "anti-redlining" legislation but the Republican Congress blocked it.

Your attitude reminds me of those who blame Bush for deficits and then back Obama. Who took Bush's $300-$400 million deficits and took them to $1.2-17 TRILLION (the 17 trillion projected 2013, the 1.2 trillion for FY 2009).

Bush's problem was he was a weak political leader, who could do only one thing (respond to 9/11), and had a mostly Democratic Congress excepting 2004-2006. With the Dems/Media/Congress/Race-hustlers all against him, Bush predictably caved.

The lesson is that Republican control of CONGRESS (and particularly the House) is essential to block bad legislation.
------------------
This is why so much commentary here is immature. The choice is not between perfect and evil, but bad and even worse. Yeah Bush/McCain are/were bad, but Obama is even worse. There is NO possibility of a Dem Congress/Obama ever reversing things (in fact it's getting worse with no money down for minorities only) and permanent funding for ACORN means little chance of free-fair elections any generation soon.

Elections matter and the House is more important in killing this kind of stuff than the President.

Whiskey said...

Let me add that lots of other places are in WORSE shape without any home-loans to liar loan non-Whites.

For example, Greece is basically going bankrupt. Ireland is on frantic austerity mode, trying to avoid the same, and Spain and Portugal are following Greece (and Turkey) into default/bankruptcy. Germany has made it clear they won't bail out Greece (or the others). The UK's budget is a joke, taxes raised everywhere frantically as the UK's gilts are falling (too much spending). EVERYONE was over-leveraged in Europe, with cheap Fed/ECB money, betting on the come in "emerging markets" like Hungary and Vietnam, projecting growth that never happened.

The latest out of Copenhagen is a demand for a "Tobin Tax"* to take fractional amounts from every credit card purchase, deposit or withdrawal from a bank, stock transaction, bond sale or purchase, etc. to fund "anti-Global warming initiatives" or plug the holes in EU budgets.

*Nameed after the late US economist Jeffrey Tobin, and aimed at taking money from poor Westerners to rich Third Worlders to "save the planet" from Global Warming.

Pelosi and Reid have however endorsed a US VAT tax. Which is worse than the a fed sales tax because it goes every step of the supply chain for services AND goods, and requires mountains of paperwork and clerks to fill out and maintain.

The TARP program was $700 billion. Stimulus was $787 billion, most of it for government Health Education and Welfare jobs, nearly all of them female employees. Only $4 billion (0.5%) went to infrastructure projects. The rest to pork and block grants to pump up HEW State employment. There is another stimulus winding its way through Congress, and ObamaCare, and Cap and Trade, all of which HAVE TO BE PAID FOR. Which requires new taxes up the wazoo. The equivalent of window taxes, taxes on hats, taxes on closets, etc. that the English went through in the seventeenth and eighteenth centuries.

David Davenport said...

Some follow up to "Dept. of It Ain't Broken, So Let's Fix It

...

For example, the NY Times Magazine features this long article by Elizabeth Weil ...



Mom, the Eagle Has Landed!

My boys love astronomy. I couldn't care less.
By Emily Bazelon

Posted Friday, Dec. 11, 2009, at 7:11 AM ET

The other night, my boys curled up on the couch with my husband and went to the moon. They were enthralled by a grainy video of Neil Armstrong's 1969 shaky descent onto the pitted lunar sand. "Mom, the Eagle has landed!" they shouted in unison. "Come watch!" I was in the kitchen, reading Elizabeth Weil's New York Times Magazine story on the perils of trying to improve a companionate marriage. I was enthralled, too. "Listen to this," I said, reading aloud as I walked into the living room, "We lost steam 95 percent of the way through our D.I.Y. home remodeling and, as a result, have no master-bathroom door."

"SHHH!" my sons hissed. "Mom, be quiet!" scolded Simon, who is 6.
I sat down, put the magazine aside, and tried to care about the moon, the planets, the stars, the galaxy. I concentrated on the astronauts and Sputnik and the race with the Soviet Union from JFK to Nixon. But I was interrupted by a stingy voice in my head: Just think what we could do on this planet with all the time and energy we spend trying to reach other ones. I know, I know: It's anti-science, anti-American, anti-imagination.

...

Anonymous said...

I don't think that question can be answered by stating ones persons name. A lot of bad decisions by a lot of different people came together to create that perfect storm.

Anonymous said...

"Just think what we could do on this planet with all the time and energy we spend trying to reach other ones. I know, I know: It's anti-science, anti-American, anti-imagination."

As Camille Paglia said, if women were in charge we'd still be living in huts.

Anonymous said...

"So, everything gets watered down. How many votes did Buchanan get, btw? How far did Ron Paul get in the 2008 primaries?"

Fair questions, but they had their parties bucking them and the average American listens to parties when it comes time to vote.

Then, there's Ross Perot--the one outside- the- two- parties person who IMO really COULD have won the Presidency had he decided he actually wanted to win it and had he decided not to self-destruct. I am glad that he didn't, but he is as close to an example that it can be done as we have.

I won't say it can't happen.

Robert said...

Who's to blame for the fact that all Americans don't share a value system that would make fraudulent loans, welfare ripoffs and nanny-state guilt-tripping unthinkable? Without a shared national value system, Oswald Spengler would say, we're not a society at all, just a random collection of scared lost children trying to convince ourselves we're free.

Refer to Spengler's essay "Prussianism and Socialism"

stari_momak said...

"The Sports Guy" on ESPN? WTF?

Bill Nye, the Science Guy, operates on PBS which has all sorts of programs. Having a 'Science Guy" on ESPN is like having David McCullogh "the History Guy" on the History Channel, or Brian Lamb "the Politics Guy" on CSPAN.

Anonymous said...

Steve: Who was running Fannie Mae? Clinton people. Who tried to cut FM back? Bush. Who stopped him? Demo Congs.

Rule changes enacted in 2000 by Clinton set the stage.

Democrat control / obstruction of Congress off and on throughout the next 8 years kept the scam operating.

Anonymous said...

http://www.the-american-interest.com/

Lots of fantastic and insightful articles in the current issue of American Interest. The one on Milton Friedman is relevant to the financial meltdown.

Richard Hoste said...

Your attitude reminds me of those who blame Bush for deficits and then back Obama. Who took Bush's $300-$400 million deficits and took them to $1.2-17 TRILLION (the 17 trillion projected 2013, the 1.2 trillion for FY 2009).

I've gone from finding you cute and funny to really disliking you.

On January 5th, 2009, the deficit under Bush was $10.6.

The $300-$400 million was completely pulled out of your ass.

Middletown Girl said...

"Yes, the October 15, 2002, White House Conference on Increasing Minority Homeownership in which Bush denounced as down payment requirements as the foremost cause of the racial gap in homeownership rates. That sends a signal to his underlings, federal regulators, and to interested parties, such as Countrywide, Ameriquest, New Century, and Quick Loan, what the boss is thinking."

But his 'underlings' went along because Bush ordered just what they wanted. The massive government and its agencies can block, stifle, sabotage, and undermine presidential dictates and recommendations in myriad ways. Nixon faced this problem all the time. And consider how much trouble Bush and Gonzalez got into over torture memos? There were tons of leaks coming from within government. Especially in his second term, just about everyone in government was undermining the Bush agenda.

All of government went along with Bush on 'ownership society' because that was what the Wall Street overlords and progressive politicians--and bureaucrats--wanted. They were not skeptical underlings pressured to do something patently foolish. They were all true believers. Also, conservatives wanted to win kudos as CARING people. Conservatives had long worried about the compassion deficit.

And, we should really ask... was it really Bush who came up with the idea of 'ownership society' or was it fed to him by bigshots with close ties to bankers and bureaucrats? Bush was essentially a frontman for people and groups far more powerful than he.
Same was true of the Iraq War. Neocons and liberal Zionist Jews, through control of media and diplomacy, came up with that project. Because Bush was the FACE of the Iraq War and Ownership Society, some people may believe Bush was the brainchild and visionary behind both. He was just an idiot taking orders from the REAL elites of society.

And now we have Obama as the new face and frontman. Clinton is gone, Bush is gone, and in 7 yrs, Obama will be gone. But the POWER ELITE in the media, academia, finance, and hightech will remain... and find another frontman. We need a Theodore Roosevelt to bust the a-holes.

Middletown Girl said...

"As Camille Paglia said, if women were in charge we'd still be living in huts."

At least you don't need a loan from a bank to own a hut!

headache said...

Whiskey,
Your post about Greece is superficial. Everybody with some background knowledge knows that Greece has always been in this shape. Yet the country is nice to live in. That's coz Greeks developed a family-centric system to cope with Ottoman suppression and don’t give a shit about public affairs. The families do well and the government is f..d. Eurocrats tried to solve this apparent problem by throwing money at it. Of course Greeks just laughed, soaked up the cash and left public life as f..d -up as ever.

The way Greece coped with its debt in the past was to devalue its currency. However, with the Euro, that's no longer possible. This is why Greece is in trouble now. Not coz of any housing bubble. And that’s why they are making it Germany’s problem.

But it seems the creators of the Euro knew this, as they hid it from us. Every Euro coin and note has a number on it, starting with a distinct letter associated with one of the central banks of a member state which issued the note/coin. For instance, every Euro note/coin starting with an X was issued by the Germany Central Bank (Bundesbank). Central banks issue in proportion to the to the financial clout which they have. Any excess Euros of a member state is then due to extra money from Brussels.

So even though the Euro is universal, in fact each Euro coin and note belongs to a particular national central bank and can be withdrawn and replaced with another currency immediately. It seems the Euro was not as irreversible as the Eurocrats wanted us to think.
Those in the know (e.g. Prof. Hankel) are already betting on the date where we see the return of a new Deutsche Mark.

klaos said...

c.) Alan Greenspan

The more interest the mortgage lender has to pay to borrow money, the less likely it will lend a few hundred thousand to someone who can't even come up with a down payment.

Truth said...

"Here we are with 10.2 percent unemployment, a 787 billion dollar Wall Street Bailout, record numbers of Americanos' on food stamps (one in eight Americans, one in four children), 15.7 unemployed Americans and 8 million Employed illegals, falling housing prices (a good thing IMO), record debt via T-bills held by China/Japan/Saudi/Russia, and record trade defecits, an occupation of Iraq and escalating occupation of Afghanistan that has cost around a trillion..."

And Tiger Woods screwing white women!

Big Bill said...

As much as George Bush thoroughly repulses me, heaping blame on him risks ignoring the present danger.

Doctor Housing Bubble also pointed out that the 40% of all current California mortgages are FHA mortgages, typically given with only 3.5% down.

If you add the $8000 rebate check (aka Obama "tax credit") for all first-time purchasers (read: those to profligate and irresponsible to get a loan even in 2005), a 20 year old wetback can still buy a $250k home for no money down.

I pray that Pelosi, Reid, and Frank don't expand the free federal house money program to $15k for everybody.

Anonymous said...

Things really accelerated around the middle of 2002.

Any guesses as to what happened around these times?




A stock market crash and the flight of money from corporate investment into real estate. One bubble deflated and caused another someplace else.

Anonymous said...

What are the units on the ordinate of the graph? Percentage?

Hayek said...

Both

Udolpho.com said...

It really took no time at all for boomers to steer things into the ditch once they were in complete control.

John Seiler said...

And let's not forget who was running Congress during those years (1995 to 2006): Republicans. They passed the laws, not the presidents.

(Except for brief Dem control of the Senate from mid-2001 to 2002.)

Anonymous said...

Is there a graph that would cover the country as a whole?

John Seiler said...

This is 1/3 of the reason we're in a Depression. And it is a Depression. The 10% unemployment figure the government cites is phony. ShadowStats.com puts the real number at 20% (using the pre-Clinton formulas).

The other 2 causes for the Depression are: Second, the Iraq War costing $5-7 trillion, according to Stiglitz; he includes interest payments on the debt to pay for the war and the cost of paying for severely injured troops the rest of their lives. And now Obama's escalation of the Afghan war will cost trillions.

Third, the debasement of the dollar, which has lost 3/4 of its value since 2001. That's the real reason commodity prices have risen. As soon as inventories clear out, everything else is going to rise in price, too.

Any one of the 3 above factors would produce a bad recession. All 3 together spell D-E-P-R-E-S-S-I-O-N.

Has anyone under 80 ever seen anything this bad? I remember the 1970s, and they weren't as bad (disco aside).

The housing boom/bust will rumble at least through the economy for another decade. The Iraq and Afghan wars are continuing. And Obama-Bernanke are continuing the inflationary follies of Bush-Greenspan-Bernanke.

On top of that, Bush's tax cuts mostly expire in 2010 -- becoming, in effect, the Bush tax increases. That'll be a fourth factor keeping the economy in a Depression.

You can blame Clinton for part of the housing debacle. But you can't blame him for the inflation and the trillion-dollar wars. So Bush and the Republican Congresses of those years bear almost all the blame for the Depression.

L said...

Blaming Clinton or Bush? You've got to be kidding. These sorts of things run way, way deeper than that!

Anonymous said...

Interesting article on Wall Street influence on government. I wonder how good Taibbi is as a reporter.

http://www.rollingstone.com/politics/story/31234647/obamas_big_sellout/4

Anonymous said...

On top of that, Bush's tax cuts mostly expire in 2010 -- becoming, in effect, the Bush tax increases.




Priceless!

So if the tax cuts expire, and the Democrats let them, it will be ALL BUSH's FAULT FOR RAISING TAXES!

You strike me as the sort of guy who gets rejected by a woman and screams "Curse you, Bush!".

Ronduck said...

John Seiler said...

Second, the Iraq War costing $5-7 trillion, according to Stiglitz;

We spend just as much on welfare, are you going to blame the welfare mommas for the Depression too?

Hell, if you count the hidden cost of affirmative action we spend more on supporting Blacks and Hispanics than we do financing the ENTIRE DoD, including the various wars around the world.

David said...

MT said

> They thought that people will become more responsible and enterprising IF they own private property. So, expanding ownership of homes would make poor people more conservative <

Absolutely. As you say, they had it exactly backward. Owning private property is more the RESULT of being responsible and enterprising than the CAUSE of being responsible and enterprising.

The Bushies' policy was the LBJ/Great Society redux: jes put 'em in houses and give 'em lawns and plenty to eat, 'n' they'll be good Amurricans.

I wrote about that attitude on my hobby blog. The attitude is a form of moron-think: since having a mansion means a man is rich, if we give everyone a mansion, then everyone will be rich! If we give everyone a college degree, everyone will be smart! If we print a trillion dollars, we'll be a trillion dollars richer! Unfortunately, most people are morons, so that's exactly how most people think.

Anonymous said...

Where did the graph go? I couldn't figure out what it really displayed but it was provocative!

WhiskeyFanBoi said...

What's not to love in a comment which starts:

Steve, that's intellectually lazy.

Then says:

[Bush] was a weak political leader . . . and had a mostly Democratic Congress excepting 2004-2006.


Neither the US House nor the US Senate had a Dem majority at any point from Jan 1995 to Dec 2006. See here. Bush was prez from 2001-7.

Whiskey continues to lecture:

This is why so much commentary here is immature.

Whiskey must be a put-on neocon. The characteristic neocon combination of moronic naivete, projection, and ad hominem is too exaggerated to be real, no?

Anonymous said...

The Bushies' policy was the LBJ/Great Society redux: jes put 'em in houses and give 'em lawns and plenty to eat, 'n' they'll be good Amurricans.




Actually it's a lot like the Thatcher policy from the eighties, which also sought to transform the lower classes into homeowners on the grounds that such people would feel more of a stake in society and become more conservative as a result. And be less of a public burden in the long run.

Middletown Girl said...

"Second, the Iraq War costing $5-7 trillion, according to Stiglitz";

"We spend just as much on welfare, are you going to blame the welfare mommas for the Depression too?"

-----------

Well, aren't you depressed about it?

rob said...

Thanks Hoste and WhiskeyFanBoi,

Wiskey usually goes to ground for a week or two after he gets caught lying. Perhaps he thinks that people forget he's psychotic and paranoid after a few (wonderful) days without him.

Anonymous said...

Actually it's a lot like the Thatcher policy from the eighties, which also sought to transform the lower classes into homeowners on the grounds that such people would feel more of a stake in society and become more conservative as a result. And be less of a public burden in the long run.

I wonder whether Baroness Thatcher is aware of the Chav phenomenon.

David said...

> And be less of a public burden in the long run. <

A Depression makes the lower classes less of a public burden in the long run, sure.

Ronduck said...

Middletown girl said...

Well, aren't you depressed about it?

I'm not depressed about the wars. I am depressed about the welfare-assisted breeding of our minority underclass. And this WA-breeding has led to the current Obama victory.

The other thing I am depressed about is that the Obama administration introduced rules of force like we had in Vietnam. The left wants this war to lead to massive social unrest so that they can advance their agenda the way they did in the 60's. Hence why our forces now have restrictions on when they can return fire, but we are increasing troop levels there.

Truth said...

"I'm not depressed about the wars. I am depressed about the welfare-assisted breeding of our minority underclass."

Many people who don't have to worry about driving over IEDs would agree with you...although I'm mot quite sure why.

Anonymous said...

Whiskey must be a put-on neocon

Well, he used to post here as Evil Neocon. Thats what we think anyway, has he ever confirmed that?

Anonymous said...

Ive commented here before that maybe Bush was emulating Thatcher as regards expanding home ownership.

In the UK it was done by making public housing available to buy, not by be debauching the mortgage process.

Eileen said...

Alan Greenspan offered up a solution to the current housing crisis [i.e. the glut of empty houses that is driving housing prices down thus exacerbating the securities crisis] during his testimony last April before the Senate Subcommittee on Immigration, Refugees, and Border Security:

"Our skill shortage, I trust, will ultimately be resolved through reform of our primary and secondary education systems. But, at best, that will take many years. An accelerated influx of highly skilled immigrants would bridge that gap and, moreover, carry with it two significant bonuses.

"First, skilled workers and their families form new households. They will, of necessity, move into vacant housing units, the current glut of which is depressing prices of American homes. And, of course, house price declines are a major factor in mortgage foreclosures and the plunge in value of the vast quantity of U.S. mortgage-backed securities that has contributed substantially to the disabling of our banking system. The second bonus would address the increasing concentration of income in this country. Greatly expanding our quotas for the highly skilled would lower wage premiums of skilled over lesser skilled. Skill shortages in America exist because we are shielding our skilled labor force from world competition. Quotas have been substituted for the wage pricing mechanism. In the process, we have created a priviliged elite whose incomes are being supported at noncompetitively high levels by immigration quotas on skilled professionals. Eliminating such restrictions would reduce at least some of our income inequality.

"If we are to continue to engage the world and enhance our standards of living, we will have to either markedly improve our elementary and secondary education or lower our barriers to skilled immigrants. In fact, progress on both fronts would confer important economic benefits.

"Immigration policy, of course, is influenced by far more than economics. Policy must confront the very difficult issue of the desire of a population to maintain the cultural roots that help tie a society together. Clearly a line must be drawn between, on the one hand, allowing the nation to be flooded with immigrants that could destabilize the necessary comity of a society and, on the other hand, allowing the nation to become static and bereft of competition, and as a consequence to lose its economic vitality. The United States has always been able eventually to absorb waves of immigration and maintain its fundamental character as a nation, particularly the individual rights and freedoms bestowed by our Founding Fathers. But it must be conceded that the transitions were always more difficult than hindsight might now make them appear."


~~~~~

American skilled workers = a d*mn privileged elite