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Politics : The Obama - Clinton Disaster -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (62713)	12/24/2011 8:15:54 PM
From: DuckTapeSunroof	Respond to of 103300

The Housing Bubble and the Big Lie —By Kevin Drum Sat Dec. 24, 2011 10:37 AM PST motherjones.com As longtime readers with good memories will remember, Peter Wallison of AEI has spent several years pushing the preposterous idea that Fannie Mae and Freddie Mac were responsible for the subprime bubble. (See here and here for background.) After Wallison's latest jeremiad, Joe Nocera has finally decided he can't take it anymore: So this is how the Big Lie works. You begin with a hypothesis that has a certain surface plausibility. You find an ally whose background suggests that he’s an “expert”; out of thin air, he devises “data.” You write articles in sympathetic publications, repeating the data endlessly; in time, some of these publications make your cause their own. Like-minded congressmen pick up your mantra and invite you to testify at hearings. ....Thus has Peter Wallison, a resident scholar at the American Enterprise Institute, and a former member of the Financial Crisis Inquiry Commission, almost single-handedly created the myth that Fannie Mae and Freddie Mac caused the financial crisis....Allies? Start with Congressional Republicans, who have vowed to eliminate Fannie and Freddie — because, after all, they caused the crisis! Throw in The Wall Street Journal’s editorial page, which, on Wednesday, published one of Wallison’s many articles repeating the Big Lie. It was followed on Thursday by an editorial in The Journal making essentially the same point. Repetition is all-important to spreading a Big Lie. What's most remarkable about this is how brazen it is. As Nocera notes, Wallison's latest piece is about the charges the SEC brought last week against six former Fannie and Freddie executives. That's a plausible hook for Wallison's hobbyhorse, but even a casual reading of the case shows that the SEC isn't claiming that government mandates for affordable housing drove Fannie and Freddie headlong into the subprime market. Just the opposite: Starting around 2002, Wall Street banks started their subprime binge and Fannie and Freddie began to lose market share. A few years later, when Fannie and Freddie joined the subprime orgy, they were doing it to compete with their private sector rivals, not because Congress or anyone else was forcing them to. How brazen is this? Just look at the chart on the right. In 2002, Wall Street banks start the subprime bubble. That same year, Fannie and Freddie see their market share start to plummet. It's not until 2005, at the tail end of the bubble, that Fannie and Freddie get back into the game. This is butt simple stuff. All you have to do is look at one simple chart to see exactly what happened. And yet, conservatives don't care. As Paul Krugman says, this "isn’t just a case where different people look at the same facts but reach different conclusions. Instead, we’re looking at a situation in which one side of the debate just isn’t interested in the truth, in which alleged scholarship is actually just propaganda." Fannie and Freddie were bad actors in a lot of ways, and that makes them an easy target for conservatives who are desperate to absolve the private sector of any blame for the financial crisis. But when it comes to assigning blame for the housing bubble, the evidence against them is laughably thin. Like it or not, this was Wall Street's fault. Kevin DrumPolitical BloggerKevin Drum is a political blogger for Mother Jones. For more of his stories, click here.

To: DuckTapeSunroof who wrote (62713)	12/25/2011 8:03:20 PM
From: Hope Praytochange	Read Replies (2) \| Respond to of 103300

Corzine Another Victim of the Alpha-Male Curse: William D. Cohan By William D. Cohan Dec 18, 2011 7:00 PM ET 33 Comments Q Print Email About William D Cohan William D. Cohan is the author of the recently released "Money and Power: How Goldman Sachs Came to Rule the World" and the New York Times bestsellers "House of Cards" and "The Last Tycoons." More about William D Cohan For years, I have wondered why, for some people, enough is never enough. For example, what could have possibly motivated Jon Corzine -- a respected former senator, governor and Wall Street big shot with hundreds of millions in the bank -- to take the top job at MF Global Holdings Ltd (MF) in the first place? He was 63 years old, six months away from getting remarried. He was one of the few remaining high-profile Wall Street Democrats around, and an avid supporter of President Barack Obama. He was routinely mentioned as a possible successor to Treasury Secretary Timothy Geithner, if Obama were to win a second term. Why couldn’t Corzine just enjoy his fortune, perhaps set up an eponymous foundation to do good works, bide his time and then use his connections to become Treasury secretary? He already had a cushy perch at Princeton University, where he invited any number of finance types to teach his class while he basked in their reflective glory. Life was good. (Disclosure: I once taught the class, although the amount of glory reflected is debatable.) Instead, much to everyone’s surprise, in 2010 he decided to take on the thankless task of trying to revive MF Global, a second-rate futures dealer, at the request of his former Goldman Sachs Group Inc. (GS) colleague Christopher Flowers, whose private-equity firm had purchased a $150 million stake in MF Global in 2008. An Odd Request That Corzine would accede to Flowers’s request, even though Flowers had inadvertently helped to exacerbate the coup that toppled Corzine as co-chief executive officer at Goldman Sachs, was even odder. It’s hard not to think he was after some sort of personal and professional redemption at MF Global after his unceremonious departures from Goldman Sachs and the governor’s office. You didn’t have to see the miserable spectacle of Corzine testifying before various Congressional committees this month to assume he now regrets his decision, even though his personal investment in MF Global was minor, around $3 million. What he has in spades is enough lawsuits and headaches -- to say nothing of possible criminal charges -- to last him the rest of his life. Why didn’t he just go quietly into the good night? Last April, shortly before the verdict in the Raj Rajaratnam insider-trading trial, I spoke with a federal prosecutor, who compared white-collar criminals to drug lords he had prosecuted. “These guys had more money than God,” he said of the drug dealers. “They had so much money that they would have to bury millions of dollars in cash because there was no place else to put it. So their house, their yard, their huge farms would be full of these graves of money.” He continued: “For these guys it was always about who got the most amount of dope from Colombia to Mexico to the U.S. It was about saying -- when you’re there with all the other heads of the cartels -- ‘I’m the biggest guy. I got the biggest load.’” Along the same lines, perhaps alpha males such as Corzine are often unable to choose the path that others see more clearly. Why did Robert Rubin, another of Corzine’s former Goldman Sachs partners and a man with a once-peerless reputation, take a job at Citigroup in 1999, after he left his position at Treasury secretary? Rubin’s decision, which netted him an extra $115 million or so -- on top of his Goldman Sachs fortune -- ended up badly tarnishing his image when it was revealed that he had a heavy hand in ramping up the risk-taking at Citigroup, causing it to almost go bankrupt and then need a government bailout. Never Quit Trying Why didn’t Rubin choose a route similar to that of Henry Paulson, another former Goldman Sachs chief executive officer and Treasury secretary, who had the good sense to set up a China-focused think tank in Chicago rather than return to Wall Street? For that matter, why did the now 83-year-old Felix Rohatynfeel the need to return to Wall Street after his stint as President Bill Clinton’s ambassador to France? Rohatyn was already a legendary figure on Wall Street, but he couldn’t resist returning first as an advisor to Richard Fuld at now-defunct Lehman Brothers Holdings Inc. (oops!) and now as an advisor to Kenneth Jacobs at Lazard Ltd., the firm where Rohatyn established his reputation in the first place. What is so wrong with retiring gracefully with one’s reputation largely intact? Why do these men feel such a need to constantly seek power and the limelight that often accompanies it, even knowing how often the final act turns sour? Perhaps the best explanation is one attributed to Pete Peterson, the 85-year-old billionaire co-founder of the Blackstone Group: “I don’t like it when the phone stops ringing.”