Friday, September 19, 2008

Pelosi Looks Sick (With Addendum)

The photo below the fold was splashed all over the front page of today's Washington Post and accompanied this article, entitled "Citing Grave Financial Threats, Officials Ready Massive Rescue: Lawmakers Work With Fed, Treasury To Try to Restore The Flow of Money."


The picture shows, from left to right, Treasury Secretary Henry Paulson, Nancy Pelosi, and Fed Chairman Ben Bernanke. The Speaker of the House certainly is wearing a dour expression. I suspect that part of the reason for that stare is the realization that votes are at stake. As I'm fond of saying, "Never trust any politician because all that a politician is truly worried about is getting votes."

Meanwhile, we have Vice-Presidential candidate Joe Biden spouting off about the patriotic nature of paying more taxes. That may not garner him many votes. We'll find out in on Election Day.

How did our financial infrastructure get into such a mess? Check out Mustang's latest essay, "It's the Spending, Stupid" for some cogent thoughts on the matter. I would add that Americans have, as a whole, taken enormous financial risks and, at the same time, ignored the possibility of a shrinking flow of money.

Our nation has been running on debt for decades. Citizens have also come to depend upon entitlement programs. Furthermore, in this election year, the state of our economy is a political football.

In my view, there is no quick fix for the state of our ailing economy. I know that I've tightened my belt until it's rubbing my backbone. Is our government doing the same?

Addendum received via email (Thanks, Robert!):
“[Barack] Obama... blamed the shocking new round of subprime-related bankruptcies on the free-market system, and specifically the ‘trickle-down’ economics of the Bush administration, which he tried to gig opponent John McCain for wanting to extend. But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street’s most revered institutions. Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties. The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but ‘predatory.’ Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the ‘90s by Clinton and his social engineers.” —Investor’s Business Daily

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posted by Always On Watch @ 9/19/2008 10:22:00 AM