Comments on: Where There Is No Vision http://blogs.swarthmore.edu/burke/2008/09/30/where-there-is-no-vision/ Culture, Politics, Academia and Other Shiny Objects Fri, 10 Feb 2012 13:26:04 +0000 hourly 1 http://wordpress.org/?v=3.1 By: Timothy Burke http://blogs.swarthmore.edu/burke/2008/09/30/where-there-is-no-vision/comment-page-1/#comment-5782 Timothy Burke Fri, 03 Oct 2008 01:13:52 +0000 http://weblogs.swarthmore.edu/burke/?p=652#comment-5782 I agree that the political class as a whole has a common hand in this, but honestly, I really feel the Administration and much of the Republican Party rank-and-file have some special culpability along several lines. I agree that the political class as a whole has a common hand in this, but honestly, I really feel the Administration and much of the Republican Party rank-and-file have some special culpability along several lines.

]]> By: nord http://blogs.swarthmore.edu/burke/2008/09/30/where-there-is-no-vision/comment-page-1/#comment-5781 nord Fri, 03 Oct 2008 01:09:27 +0000 http://weblogs.swarthmore.edu/burke/?p=652#comment-5781 Due to the fact that it is an election year, you won't hear the thoughtful quiet discussion of those issues. Too much is at stake (politically), and both sides feel that they can score easy/cheap political points on the issue. Personally I don't think the issue divides Rep/Demo too easily, but that is how the media, aided by politicians, has tended to view this. My 2 trillion: you have to correctly define the problem in order to evaluate changes. IMHO, that depends on who wins in November - they will write the narrative of what went wrong and therefore what the solution is. Is the problem that broker-dealers failed and because of counter-party risk, etc. the Fed, Treasury and gov't had to organize a bailout? Is the problem that over-eager lenders, aided by over-eager home appraisers, builders, lent money to over-eager buyers who wanted to "flip" a house for a quick buck? Republicans and democrats have a role in both of these problems. Regulatory arbitrage was a big part of the problem that neither party wants to discuss - broker-dealers getting an easy ride from the SEC or mortgage brokers/lenders totally avoiding the existing banking regulation system through securitization. Fannie and Freddie have a large role and paid a pretty penny for their years of lax regulation from OFHEO - they got away with a lot of stuff than Sarbanes Oxley would have prevented had fannie and freddie not be exempted by Congress. Tell me who wins in November and I'll tell both what the narrative will be and what the prescriptions will be ;-) Due to the fact that it is an election year, you won’t hear the thoughtful quiet discussion of those issues. Too much is at stake (politically), and both sides feel that they can score easy/cheap political points on the issue. Personally I don’t think the issue divides Rep/Demo too easily, but that is how the media, aided by politicians, has tended to view this.

My 2 trillion: you have to correctly define the problem in order to evaluate changes. IMHO, that depends on who wins in November – they will write the narrative of what went wrong and therefore what the solution is.

Is the problem that broker-dealers failed and because of counter-party risk, etc. the Fed, Treasury and gov’t had to organize a bailout?

Is the problem that over-eager lenders, aided by over-eager home appraisers, builders, lent money to over-eager buyers who wanted to “flip” a house for a quick buck?

Republicans and democrats have a role in both of these problems. Regulatory arbitrage was a big part of the problem that neither party wants to discuss – broker-dealers getting an easy ride from the SEC or mortgage brokers/lenders totally avoiding the existing banking regulation system through securitization. Fannie and Freddie have a large role and paid a pretty penny for their years of lax regulation from OFHEO – they got away with a lot of stuff than Sarbanes Oxley would have prevented had fannie and freddie not be exempted by Congress.

Tell me who wins in November and I’ll tell both what the narrative will be and what the prescriptions will be ;-)

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