Friday, September 26, 2008

Primo Explanation for Subprime Mess

Here's the best, most concise explanation I've found for how we got into this financial mess:

I think you can figure out what should be done to remedy it; unfortunately, a lot of politicians seem to think that driving a whole further down this dead-end road is the best course of action.


Lanny said...

Awesome video!

Only one source of blame was left uncredited:
those people whose desire to have bigger homes than they could afford over rode their common sense. The lust to have more, have better and the desire "to have it all now" is the seed that was planted in the fertile field of corporate greed and liberal politics.

The whole thing is a shame. I am so upset at these power brokers and money whores, I could get in a fist fight if the right opponent came along.

John McCain had it right when he saw this coming. If anyone ever had the right to say, "I told you so", it is McCain.

Pass it on!

JaniceG said...

My favorite explanation of subprime mortgages is this one, told with stick figures (although beware, it contains liberal use of the F word):

As for McCain having it right when he saw this coming, his years of urging more and more deregulation certainly did not help the current situation.

JaniceG said...

The maker of this video definitely picked and chose what he googled to find the truth.

John McCain had it right when he saw this coming. If anyone ever had the right to say, "I told you so", it is McCain.

Here's a clip of McCain saying he didn't see it coming:

Art said...

As a former Media teacher, would you advise your students to base their entire knowledge of a subject on a single "homemade" (or made to look homemade) video that had a clear and present bias? Would you give an "A" to a student on a report covering a subject of this complexity if their article citations merely said, "YouTube video of unknown origin"?

If you want to know whatever happened to this S-190 bill, check out the Library of Congress. It never made it out of committee. It was never voted on. So much for the evil Democrats striking it down.

Also, one of the presidential candidates' campaign manager received $15,000 a month from Freddie Mac until just last month. In the words of that video, "You'll never guess who!" How about John McCain's campaign manager, Rick Davis? (And that's from FOX News!) Also check into names like Charlie Black and Aquiles Suarez, other former Fannie/Freddie lobbyists now working with McCain.

McCain should heed the advice that used to hang on your bulletin board: "If you point a finger, three fingers point back at you."

cliff said...

Alas, Art, that bill never came out of committee because Democrats would not allow it to come out of committee. It fell to a Democratic filibuster.

And Davis is not currently an active employee of the company, but is an equity holder; as such, he has little influence on the company's payments or billings.

That sounds far more innocent that the enormous direct contributions that Obama received from Freddie Mac and Fannie Mae, doesn't it?

And Janice, your video link seems to be nonfunctional, but I think I know the clip it links to--and that's a clip that aired in an interview conducted more than a year after he delivered a Senate speech warning that the crisis was coming. So while I can't say what he was referrring to in the 2007 interview when he said he didn't anticipate it, he definitely did see a major problem forthcoming, since he addressed it more than a year earlier.

cliff said...

And in response to Lanny's comment: I totally agree that the largest burden of responsbility falls on the shoulders of those who purchased beyond their means and then sought to blame someone else. I've bought several homes: the Truth in Lending Law requires that the terms of those loans be spelled out very clearly, and every one of those buyers knew what level of debt they were getting into. They also knew that there was no certainty that housing would increase in value forever--in fact, there have been warnings for several years now that a housing correction was forthcoming--but they wanted more than they deserved or could afford.

And now there are some who think that we taxpayers should pay for those who refused to live responsibly to begin with.

Some people do not deserve to, nor can they afford to, be homeowners; that's why there are thousands upon thousands of rental properties in all price ranges. And no one should expect taxpayers to pay for their homes for them when they buy beyond their means.

cliff said...

Okay, Janice, I watched the video you referenced, and I agree with some of it:

The greed of lying and/or ignorant homeowners was at the base of all of this--greed that led them to buy homes they couldn't afford. It was made worse by greed on other levels--greed that led them to believe the fallacy of a permanent escalation in real estate values in spite of evidence ot the contrary.

But it's that lack of personal responsibility that's at the bottom of it all. And of course, those who are irresponsible always have enablers willing to make some money off the irresponsible actions of others...

Art said...

I realize we could go back and forth with posting links for an eternity, but look at either the Library of Congress link above or the bill's page on The bill was never "reported out of committee," which means it was never introduced for debate on the floor, let along a vote, therefore it couldn't fall to a filibuster. What bills are moved out of committee for a vote is determined by the committee chairman, who is always a member of the dominant party, which in 2005 was the Republicans (my info is from a blog on senate process on

Also note John McCain didn't sign on as a co-sponsor until 2006, when the last activity on the bill had occurred 16 months earlier.

A Bloomberg article on this same bill was sent to me (via Neal Boortz' page) that said this was voted down by Democrats. Now you've told me it was a filibuster. By two different Congress-tracking sites, including the LOC, I see nothing about a filibuster or a vote, just a good idea left in a file drawer.

Democrats = Not Guilty.

cliff said...

There was an 11-9 party line vote to move S.190 to the Senate floor ( ), but it conflicted with the House version of teh bill and was sent back to the Senate Banking Committee. Democratic senators said was subject to a filibuster threat unless it included the House requirements that more home loans be given away to those who had no means to repay it; it was one of several proposals to regulate Fannie Mae and Freddie Mac that had no chance of surviving the filibuster talk. At the time the regulation was passed, the Senate was 55 Republican, 44 Democrat, 1 independent--insufficient to defeat a filibuster. The Democrats had managed to add a low-income ownership requirement to the House version fo the bill (the same giveaway-to-the-unqualified mindset that created this crisis to start with), and Democratic leadership made it clear this would be filibustered if similar riders were not added to the Senate bill. Since that was the cause of the crisis to start with, there was no chance of movement so the bill died in committee.