2009.11.01
Field: Bizarre coalitions of public/private/religious members
In service of God and money
Liza Field
Field is a teacher and conservationist in Wytheville.
"With false words they shall make merchandise of you." -- 2 Peter 2:3
A colleague recently asked me if, as "a Christian conservative," I thought Bob McDonnell's connection to Ralph Reed constituted a "conflict of interest."
"Well, I'm conservative and Christian," I said. "But probably not Reed's version of Christian conservative. I want us to protect God's creation. So now I'm an Earth-worshiping left-wing wacko."
"Oh come on," protested the Republican colleague, who knew my values, if not the current label for them.
"I'm all for Jesus and the free market," I admitted. "But maybe not everything should be market commodities. Like Jesus. And public office. And life. And what sustains it. Sell out these, and it's a conflict."
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After reading your story it brought me back to when we stopped a golf course from being built in a city park. What was very different about this was the conservatives open support that really saved the day and stopped the golf course from being built. Who would think? I think that is what we need to do as Americans look at each other and see what we do have in common.
Comment by Bill Hudson — November 1, 2009 @ 2:42 pm
Bizarre haphazard; what is the point of this?
Comment by Patt — November 1, 2009 @ 5:39 pm
That, when two people might seem very different have more in common then you might think, that might be the point.
Comment by Bill Hudson — November 1, 2009 @ 5:57 pm
Frankly, capitalism is the most Christian of all economic systems, because it leads to the most freedom. Communist or socialist systems are horribly anti-Christian because they shackle people.
Comment by Suzie — November 1, 2009 @ 10:26 pm
Suzie, I weep with Jesus as you compare capitalism to Christ, have you not read his word? Jesus and capitalisim are total opposites. How can you blaspheme His name?
Comment by Richard — November 1, 2009 @ 11:01 pm
Richard #5,
Do you really think Jesus favored systems where people are repressed and their effort and creativity are discouraged, even punished? No. Jesus wants us to be our freest best selves. It is up to us to temper that freedom and be generous to the poor. Generosity, of course, can only come from individuals.
Comment by Suzie — November 1, 2009 @ 11:39 pm
Capitilism is built on greed, that is the economic premise for its functioning. I believe,Suzie, Jesus was most concerned with Greed and made a point of throwing the money changers out.
Comment by Richard — November 2, 2009 @ 7:08 am
As for Hoover having the right idea about the depression, now you are rewriting history. Hoover and his party did everything backwards. This has been proven time and time again with recessions since. We now know how to fix recessions and Obama is doing just that. As for this crisis starting with the mortgage companies, you need to look deeper, go back to the Hedge Funds pushing to buy the mortgages and the banks packaging them for sale. Go back to the Hedge Funds stoppong the buying of the mortgaages and turning to oil futures. They made the bubble in both that started this crisis.
Comment by Richard — November 2, 2009 @ 7:12 am
Capitalism recoginizes the individual. That is better than socialism or communism.
Comment by Patt — November 2, 2009 @ 7:33 am
Richard,
OK, so government takeover is the formula that takes us out of recession. I don't remember Reagan using that forumla in the 80s or the GOP Congress using that formula to ignite the massive growth of the 1990s. If that were true, Western Europe wouldn't have been in a decades-long recession.
I hate to tell you, but Fannie Mae was the one who started the bundling of mortgages. Then their policy that encouraged and/or enforce bad loans was the underpinning of bad derivatives that toppled the banking system.
Comment by Suzie — November 2, 2009 @ 8:11 am
Suzie, Ronald reagan spend and borrowed hsi way to growth. Largest dificit spending ever at the time. Took off all regulation and spent Gov't money like sand. GW Bush tried the same policy, It went too far, plus GW spent overseas, not in the US. Then he took all regulation off Wall Street and business. Read what Bernie Madoff said in his interview. What Fannie Mae did was exactly what Wall Street and the Bankers wanted. Package the loans and sell them. AIG made a fortune insuring the derivatives. But withhout any controls in our "free market" we quickly have found it not so free.
You consistently fail to go deep enough into the cause of the recession and just concentrate on one area of the problem. not the root cause.
Comment by Richard — November 2, 2009 @ 8:35 am
# 9 Capitalism recognises the Capialist, not the individual. It recognises those with money (capital) that take risks and attempt to manipulate the economics for their benefit. It runs amok when it deginerates others (slaves, labor, laws, government) beyond an acceptible level. When the greed exceeds its limits, it implodes, (bubble bursts, like now). As a self employed man, I am a capitalist. I do manipulate labor, laws, resources, Gov't to my benefit whenever possible but within the confines of being a good law abiding citizen. I fully recognise though that there is a wide path of grey area in being a law abiding citizen and when that path leads to hurting others, I believe it should stop. It often does not.
Comment by Richard — November 2, 2009 @ 8:55 am
11
Richard,
Reagan was a big spender? Really? What big programs did he oversee. I believe you mean the Democratic Congress under Reagan were big spenders.
Again, the root cause of the current economic crisis can be summed up in three words: Bad mortgage loans. Without government intervention, those bad loans wouldn't have happened, and there wouldn't have been a crisis.
Comment by Suzie — November 2, 2009 @ 9:02 am
Suzie try his Star Wars program, his military spending, his Savings and loan spending. His administration set the guidelines that GW tried to follow. He also was the one who raised taxes on the Middle Class while lowering on the wealthy, another GW follow through. Read your history on Reagonomics, borrowing and spending were his economic theiry, not the democrats. He cut every social program out there, did away with public housing through the tax law changes etc. You can not blame the Democrats on his spending nor on GWs.
Again, you are flat wrong on the mortgage crisis, it is but a small part of this recession and it came as a result of the crash in real estate, not the cause of it.
Comment by Richard — November 2, 2009 @ 9:16 am
Richard, you speak of manipulating labor, laws, gov’t, etc. while at the same time mocking the “free market”. You’re right, it’s not free and it never has been. The fact that you have something to manipulate proves it isn’t free. Yes, the companies that get ahead are manipulative. But, if we truly had a free market there would be nothing to manipulate. That’s the root of the problem.
The day you see no more lobbyists will either be the greatest day (free market) or the worst day (socialism).
Note: apologies for any grammatical errors
Comment by terry — November 2, 2009 @ 9:22 am
Suzie, Reagan's legacy that the Republicans are so proud of is he spent the Soviet Union into bankruptcy, please remember.
Comment by Richard — November 2, 2009 @ 9:28 am
Suzie, one last comment before I go to my capitalist office. In your complaints against Fannie Mae and the bad loans, you fail to say who lobbied to get the laws and fannie mae regulations the way there were. The banking lobby is one of if not the biggest lobby in DC. They got GW Bush elected, they got the bankruptcy laws changed, and they controlled the mortgage regulations. Did they own Dodd and Frank?, no doubt and they are both hanging by a thread as they try to lead for changes. They also own Delaware, forcing me to write a Presidential candidate that I would not vote for him for President if he voted for the bankruptcy act. Fortunately, he has many other good qualities about him and I do understand that his state is owned by the banks. And then there are the Republican Congressmen who voted for the regulations. You can find only one or two on youtube that spoke up against it, the rest were in the bankers' pocket.
Comment by Richard — November 2, 2009 @ 10:27 am
@Capitilism is built on greed
capitalism is built on FREEDOM ! not all that own businesses are greedy.
Comment by pammala — November 2, 2009 @ 5:57 pm
@17 republicans told everyone that fannie mae was in trouble years ago, before bush, no one paid attention
Comment by pammala — November 2, 2009 @ 5:58 pm
Richard,
It was Carter who started the CRA, and Clinton who broadened its powers to get bad loans made. Sorry to burst your bubble (again).
Comment by Suzie — November 2, 2009 @ 8:17 pm
19 and 20 Only a couple Reoublicans complained about fannie mae and they did so knowing that nothing would change. The Banks owned the republicans and many of the democrats. Fannie mae has helped many deserving people get mortgages. The banks manipulated it by selling the mortgages to the hedge funds and using the derivative market to run up the real estate bubble. You keep acting like the mortgages that have gone bad were only made to poor people with bad credit. Many many if not most of the bad mortgages came from middle class white collor workers in their Mcmansions whose mtgs became bad as the values of their homes drropped and the bank auditors marked them as bad because they no longer met the equity guidelines. Not even because there were late payments. Why did this happen, because the hedge funds dropped the real estate market and went into oil speculation. The banks then had too many loans on their books they could not sell, therefore they could no longer make new loans, Contractors got stuck with houses built they could not sell because the banks could not make loans. The contractors lowered their prices trying to bail out which brought all prices down. Those with variable rate mortgages that required an certain equity position were caught as the value of their homes dropped. Auditors labeled the loans bad because they did not meet the loan agreements, banks called the loans, home owners could not sell, and banks foreclosed us right into a major recession. Had the bankers and hedge funds had any controls the market would not have overheated in the first place nor could the hedge funds have created and then dropped the RE market. Had the bankers not lobbied for the freedom to sell the mortgages and the derivatives, again the market would not have overheated. Had the republicans not taken all the controls off the hedge funds, off wall street, the derivative market could not have overheated. Had the SEC done its job, the market would not have overheated. 8 years of GW policies and excessive bank lobbying allowed this to happen!
Comment by Richard — November 2, 2009 @ 10:16 pm
@20....Suzie....
There is now nor never was any regulation on the books that required a financial institution to make a bad loan. The only reason those loans were made was because of pure greed.
Call it unbridled capitalism at its worst.
Comment by Will — November 2, 2009 @ 10:26 pm
Capitalism is a lot like a pure bred race horse. It's nothing until it's tamed and trained. Left to it's own devices, a pure bred race horse will do nothing but run in every direction.
Capitalism will do the same thing.
Comment by Will — November 2, 2009 @ 10:27 pm
Suzie, once again, the CRA was not the problem. A few higher risk mortgages did not cause this recession. See above. If was the derivative market and the packaging of the mortgages that drove the bubble that led to the collapse. As long as the hedge funds had no other form of collateralized high rate security, the collateralized mortgages were the hottest thing going. 5 -9% return on a mortgage with real estate as collateral packages with insurance guarantees by AIG. Sure beat US Treasuries, corporate bonds, and the fumbling equites market. Banks could package these and throw them out the door and the hedges would buy them. Then all of a sudden oil futures became the way to make more money. The hedge funds jumped on these and ran the price of crude out of sight. They dropped the real estate mortgage market like a rock. Boom, energy prices soared, real estate prices dropped, banks had no money to loan, and businees could not pay the price of energy. Hugh recession. The hedge funds then dropped oil futures and went to cash. boom, oil prices tumbleb, stock market crashes, pension funds lose 40% of their value. Economy is on the verge of collapse. GW finally wakes up, calls for TARP to try to bail out the banks who are now broke.
Comment by Richard — November 2, 2009 @ 10:27 pm
#18 pammala, if you read my diatribeabove, you will see that capitalism is indeed buolt on greed. Yes it needs freedom to allow the greed to prosper, but greed is its driving force. Freedom is but the lack of controls to keep it in check. Adam Smith warned that the greed would lend itself to recession after recession. Your see, you free marketers are correct in that the market will correct itself. It does indeed. It may take a lifetime or it may only take a few years, but the greed finally becomes so rampant that it burns itself out and we go into a recession or possible a depression. The problem is that the cycle may take lifetimes in which many people starve and are without work while the correction takes place. It means that the wealth of a Nation collapses and the Nation falters while the cycle corrects. In our case, it means the USA can become another fallen empire (like the British or the Romans) while the cycle corrects. ALl it take sis some reasonable regulation of the greed to keep it in check and a control of the money supply. Thank the Lord we now have a democrat in office that understand this.
Comment by Richard — November 2, 2009 @ 10:37 pm
Will There is now nor never was any regulation on the books that required a financial institution to make a bad loan. The only reason those loans were made was because of pure greed.
There was also nothing in ACORN's books about helping a pimp and hooker set up shop with the government's help. Do you honestly think government agencies are going to codify its shenanigans?
Comment by Suzie — November 2, 2009 @ 10:40 pm
23 Will I really like that quote. how perfect. and much shorter than my long windedness.
Comment by Richard — November 2, 2009 @ 10:41 pm
Richard, If you're a bank, and the government is agreeing to underwrite all mortgages your bank makes, will you have any financial incentive to impose rigorous standards like you would if the government weren't involved? Or will you go out and sell all the mortgages you can?
Without gov't invention, there is no recession/depression.
Comment by Suzie — November 2, 2009 @ 10:45 pm
#24, Richard, The CRA, Fannie Mae and Freddie Mac are easy targets for the right.
Many of those on the Right fail to understand Freddie and Fannie did not make loans, they only guaranteed loans by purchasing aforesaid loans second hand.
Wikipedia has fascinating articles and time lines on The history of the CRA, and the falling of the economy that easily debunk much of the right wings claims.
http://en.wikipedia.org/wiki/Community_Reinvestment_Act
It is interesting to note that much of the modifications to both of these financial tools were introduced by Republican dominated Congresses.
Funny how Obama, and Clinton are to "blame" for everything that occured, or is occurring during their Presidencies, Yet Bush and Reagan were "waylaid" by congress, events, ect...and have no blame.
Note the pattern below:
2008 recession : GW Bush (R)
2001-2003 recession : GW Bush (R)
1990-1991: recession HW Bush (R)
1980-1982: recession Carter (D)
1973-1975: recession Ford (R)
1957-1958: recession Eisenhower(R)
And look who was President leading into the big one of "29:
Coolidge had been reelected in 1924,followed in 1928 by Herbert Hoover’s landslide victory.
Both Presidents Calvin Coolidge and Herbert Hoover were fiscally conservative Republicans who adamantly opposed direct government assistance or intervention to alleviate private misfortunes. Coolidge, who rejected aid to distressed Texas farmers as well as the victims of flooding from the Mississippi River, even mistrusted private charities. Laissez faire was the modus operandi in business and finance while self-reliance represented the cornerstone of the American Dream.
Read more: http://modern-us-history.suite101.com/article.cfm/coming_of_the_great_depression_in_1929#ixzz0VlTGfHWY
Comment by joe Mostowey — November 2, 2009 @ 10:49 pm
The FHA back mortgages were minimal in this recession. The banks were selling conventional mortgages and 100% of equity lines of credit back by AIG, not the government. That is why AIG got into trouble. Fannie Mae packaged and sold these mortgages. FHA guaranteed loans had much higher standards to be met. The Gov't intervention was the banks lobbying for the freedom to sell these derivatives. They got what they wanted made a fortune and lost a fortune. We got the pleasure of bailing them out because we have to have banks and credit to function.
Comment by Richard — November 2, 2009 @ 10:56 pm
Suzie wrote "Richard, If you're a bank, and the government is agreeing to underwrite all mortgages your bank makes, will you have any financial incentive to impose rigorous standards like you would if the government weren't involved? Or will you go out and sell all the mortgages you can?"
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There is no law on the books that says Government will guarantee bad loans.
"In 2000, due to a re-assessment of the housing market by HUD, anti-predatory lending rules were put into place that disallowed risky, high-cost loans from being credited toward affordable housing goals. In 2004, these rules were dropped and high-risk loans were again counted toward affordable housing goals.[11]
The intent was that Fannie Mae's enforcement of the underwriting standards they maintained for standard conforming mortgages would also provide safe and stable means of lending to buyers who did not have prime credit. As Daniel Mudd, then President and CEO of Fannie Mae, testified in 2007, instead the agency's responsible underwriting requirements drove business into the arms of the private mortgage industry who marketed aggressive products without regard to future consequences: "We also set conservative underwriting standards for loans we finance to ensure the homebuyers can afford their loans over the long term. We sought to bring the standards we apply to the prime space to the subprime market with our industry partners primarily to expand our services to underserved families.
"Unfortunately, Fannie Mae-quality, safe loans in the subprime market did not become the standard, and the lending market moved away from us. Borrowers were offered a range of loans that layered teaser rates, interest-only, negative amortization and payment options and low-documentation requirements on top of floating-rate loans. In early 2005 we began sounding our concerns about this "layered-risk" lending. For example, Tom Lund, the head of our single-family mortgage business, publicly stated, "One of the things we don't feel good about right now as we look into this marketplace is more homebuyers being put into programs that have more risk. Those products are for more sophisticated buyers. Does it make sense for borrowers to take on risk they may not be aware of? Are we setting them up for failure? As a result, we gave up significant market share to our competitors. "[12]"
-----In order for Fannie Mae to provide its guarantee to mortgage-backed securities it issues, it sets the guidelines for the loans that it will accept for purchase, called "conforming" loans. Mortgages that don't follow the guidelines are called "non-conforming"; typically the secondary market for non-conforming loans deals in mortgages larger (termed "jumbo") than the maximum mortgage that Fannie Mae and Freddie Mac will purchase. In early 2008, the decision was made to allow TBA eligible MBS to include up to 10% "jumbo" mortgages.
http://en.wikipedia.org/wiki/Fannie_Mae
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In other words, Teaser rates, Adjustable interest rate mortgages and other "exotic" financial instruments guaranteed the collapse of the housing market. Further, due to the derivatives markets banks which no longer own mortgages have no incentive to modify them to prevent foreclosure -in fact, just the opposite - banks win because there are multiple fees and penalties associated with foreclosure that banks receive (guaranteed money)as well as more fees and closing costs when the home is resold.
Banks cannot lose money on these deals because they no longer are owners, but are instead a middleman, an agent who gets paid regardless of what happens.
Adding to the above misery for home owners, was the fuel prices which at their height drained more than an additional $8000,00 dollars a year from the average middle income wage earner with two cars. Many people opted to buy fuel, so as to be able to commute to work, and simply walked away from high mortgage homes into lower cost apartments.
Comment by joe Mostowey — November 2, 2009 @ 11:04 pm
Joe, it is amazing that it is so hard for some to see or to aleast read the history, the repeat of history, and the repeat again. But then it is the greed of a few that lead us down this road every few years. Thanks for the input.
Comment by Richard — November 2, 2009 @ 11:05 pm
Joe it is interesting that some continue to blame the CRA for making banks make loans in redlined areas when my experience over the past 5 years was the mortgage brokers were pushing 100% equity loans in this area of Roanoke with 10 to 14% origination fees by convincing unsuspecting homeowners that they would lower their payments and consolidate their debts by refinancing and spreading their debt over a longer term. They then added the origination fee on top of the mortgage and sank the homeowner deeper in debt. A great sale pitch that suckered the homeowner in time after time. The good banker helping out. Almost as good as the credit card company helping them with that zero percent interest card that goes to 29% after 6 months. Suzie, did you day you worked as a mortgage loan officer?
Comment by Richard — November 2, 2009 @ 11:13 pm
Richard #30
Do you really think FHA are the only loans the government insures? They insure ALL secondary-market first mortgages. ALL of them. That's millions of loans. The number of in-house mortgages not affected by the government is minimal.
Know what you're talking about before you enter this debate.
Comment by Suzie — November 2, 2009 @ 11:22 pm
Nice Richard. It's funny how the RTEB won't let conservatives cast personal insults, veiled or otherwise, at other posters, but liberals get to say whatever they wish. If you really believe this mess started five years ago, that explains alot about why you just don't get it. Some people think this mess started, STARTED, you know, as in began, initiated, originated with the CRA. Sure, some unscrupulous bankers have acted more like loan sharks than responsible financial officers, but, the problem goes back much farther than that. But again, if you really think this mess started within the last five or even ten years, well, I've got a sweetheart deal of a loan for you.
Comment by Another Chris — November 3, 2009 @ 6:21 am