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Politics : GOPwinger Lies/Distortions/Omissions/Perversions of Truth -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (146842)	11/11/2008 8:04:14 PM
From: geode00	Read Replies (1) \| Respond to of 173976

Fannie and Freddie have shareholders as does BS and Lehman and AIG. Government faces public pressures including voters. You have made no argument that distinguishes the GSEs from other actors in this fiasco. Business failures are a feature of the system but it is much too simplistic to say that the ability of businesses to go bankrupt is perfectly ok. That is like saying that we should not irrigate fields and instead let the crops die when there is no rain. Failures of this magnitude cause lots of problems in the economy and very real pain to people who had nothing to do with the businesses' decisions. One thing to consider is to make the system more robust so that one or a dozen failures do not crash the system. You are simply talking from a nonsensical ideology while ignoring the real world. "The government gives preferential treatment to investment in housing leading to an over investment in that area." What preferential treatment are you talking about? Interest in non mortgage credit used to be deductible but making it nondeductible hasn't slowed the rise in household indebtedness. What is preferentially treated are capital gains at 15%. "Also it pushed securitization, but rewarding it with lower capital requirements, and it used regulation, political pressure, and threat of lawsuit, to expand lending to less qualified applicants." You keep blaming the government for everything. Your ideology keeps trumping reality. nytimes.com "Many Republican lawmakers on the oversight committee tried to blame the mortgage meltdown on the unchecked growth of Fannie Mae and Freddie Mac, the giant government-sponsored mortgage-finance companies that were placed in a government conservatorship last month. Republicans have argued that Democratic lawmakers blocked measures to reform the companies. But Mr. Greenspan, who was first appointed by President Ronald Reagan, placed far more blame on the Wall Street companies that bundled subprime mortgages into pools and sold them as mortgage-backed securities. Global demand for the securities was so high, he said, that Wall Street companies pressured lenders to lower their standards and produce more “paper.” “The evidence strongly suggests that without the excess demand from securitizers, subprime mortgage originations (undeniably the original source of the crisis) would have been far smaller and defaults accordingly far lower,” he said."