How Democrats Pulled U.S. Economy Back From The Brink
When President Barack Obama took the oath of office about a year ago, he inherited the biggest economic mess since the 1930's: millions of Americans losing their homes to foreclosure and their jobs to a steadily deteriorating economy, huge budget deficits fueled by tax cuts for the wealthy and two wars his predecessor simply put on the national credit card, mushrooming national debt and some of the biggest barons on Wall Street in financial collapse.
A year later, we take stock. The President's State of the Union speech provided a good overview. A new document just released by the U.S. Senate's Democratic Policy Committee, which I chair, takes a similar look at the challenges we faced in 2009 and the work the President and Democrats in Congress accomplished to keep the economy from completely collapsing.
The Bush recession was wide and deep, as difficult as we've seen since Herbert Hoover's Great Depression. It took much of the past year to enact the economic rescue program and put it in place. We are now beginning to see some significant results.
I invite you to read the document in its entirety. Nobody claims the economy is totally back on its feet, but it is hard to deny, even as difficulties continue, that policies enacted over the past year pulled the U.S. economy back from the brink of disaster and helped to stabilize it. There is lots more detail in the just-released DPC document, but here is a sampling of some of the legislation Congress enacted over the past year that have worked, and that we must now build on to hasten and strengthen economic recovery.
- The American Reinvestment and Recovery Act: stabilized the economy and saved millions of jobs that otherwise would have been lost. It also provided tax relief for the middle class, and strengthened the safety net for Americans suffering the most.
- The Helping Families save Their Homes Act: strengthened the housing market and helped many families avoid losing their home to foreclosure.
- The Credit Card Accountability and Responsibility and Disclosure Act of 2009: gave consumers new protections from abusive credit card practices.
- Cash for Clunkers: strengthened the auto industry, increased the U.S. auto fleet's fuel efficiency.
- Small Business Innovation Research (SBIR) and Small Business Technology Transfer programs (SBTT: increased resources for small businesses and entrepreneurs to grow and expand their businesses.
- Tax cuts for middle Americans -- The Making Work Pay tax credit provided a tax cut for 95% of working families; Expansion of the Child Tax Credit and the Earned Income Tax Credit, and expansion of the First Time Homebuyer Tax credit as well new tax relief for small businesses also meant more disposable income for working families, which helped families make ends meet and helped stimulate the economy.
It's been a tough year, but the investments we made in the economy pulled it back from the brink of disaster. We're not out of the woods yet by a long shot, but there are signs the Bush Recession may now be ending. The final quarter of 2009 showed real economic growth, at the fastest pace in six years. Many economists are forecasting even more growth in the first quarter of 2010.
President Obama likes to say that the federal government and our economy are like an ocean liner, not a motor boat. It takes quite a while to turn them around. The DPC policy paper documents how we've been doing turning it around and the progress we're making.
Our next challenge: build on those fundamental improvements to create more jobs and sustained economic growth in 2010.
Fare thee well, o august organ,
the to and fro of learn'd debate.
"Time to move on", thought Byron Dorgan,
the K street sirens won't abate.
Could it be that this year's Daschle,
to "spend more time with family",
will soon find that all that cash'll
keep him right here in DC?
If you're so passionate Mr. Dorgan, stay in the fight!
January 28, 2010 5:19 PM | Reply | Permalink
I will miss you voice of reason. Thank you for your dedication Mr. Dorgan, I hope you’ll find another way to help the people.
January 28, 2010 5:50 PM | Reply | Permalink
Thanks for your patience and sorry for the inconvenience!
Best regards, Mary, CEO of youtube to mp3
December 17, 2010 2:52 AM | Reply | Permalink
What youre saying is completely true.i agree
children health
January 12, 2011 10:56 AM | Reply | Permalink
I do agree with all the ideas you have presented in your post. They’re very convincing and will definitely work. Still, the posts are very short for starters. Could you please extend them a bit from next time? Thanks for the post.by healthy families and child health plus
March 27, 2011 9:42 AM | Reply | Permalink
I just heard you on C-span after the Bernanke vote; you and Maria Cantwell were on fire!
I wish you were staying, too. Not many others are speaking the truth about the abuses Big Banks are heaping on the taxpayers, and I fear for our country if the Banks aren't sufficiently re-regulated.
January 28, 2010 5:55 PM | Reply | Permalink
Oh please, Sen Dorgan.. it's now plainly apparent that you've been bought. Please tell me how the democrats, who illegally pushed through NAFTA, and who have continued to sell out citizen workers in the US, who have been in cahoots with the bankers and Wall St., and the foreign elites, whose resident in thief last night claimed to smack down the Goldman Sachs, and the lobbyists, and who stated that he was going to place his "blue ribbon panel" to deal with all these corrupt shenagins, yet who didn't respect our intelligence enough to explain WHY his blue ribbon panel is comprised of, [drum roll, please...] the same crooks from Goldman Sachs who looted our economy (with the help of democrats in congress, the Clinton, Bush and now Obama administration, as well as Allan Greenspan, whose such an intellect, and stalwart, that he didn't see the housing bubble coming, when he helped facilitate it???? Plus, Greenspan's corrupt cohorts, Ben Bernanke and Timmy "taxes are for the little people" Geithner tried pulling the same excuse???
January 28, 2010 6:00 PM | Reply | Permalink
Please tell us how the economy's been pulled back from the brink, when we're bleeding more jobs each month, when our only export is jobs, jobs, and more jobs (is that what Obama is intending to double in five years, exporting jobs????)
We have tent cities in each of our fifty states, the same people who fattened themselves at our expense under Bush, are fattened under HObama, and btw, it was HObama who took foreign contributions during his campaign, and still refuses to make full disclosure. It was HObama who pushed for TARP and the stimulous, just as Bush did. It was HObama who has refused to be completely transparent about where the stimulous has gone, though he spends lots of money on himself, and refuses to be transparent about that as well. It was the dems who increased our debt to over 14 trillion to day, again, how has that pulled us back from the brink???
It's actually pushed us over. I pray, Sen Dorgan, that your citizen constituents give you the "welcome" home that you truly deserve.
January 28, 2010 6:04 PM | Reply | Permalink
You have pointed out so many of the problems, but pointing out problems is easy. Finding solutions that work is another matter.
I was listening to http://wamu.org/programs/dr/09/05/26.php very good conversation with Diane Rehm
Maybe you should buy Mr Dorgan’s New book
Reckless!: How Debt, Deregulation, and Dark Money Nearly Bankrupted America (And How We Can Fix It!)
Or this book "Take This Job and Ship It.
January 28, 2010 6:21 PM | Reply | Permalink
He never claimed to have the solutions. Did you see him run for office?
January 28, 2010 11:52 PM | Reply | Permalink
Dear Senator, we thank you for your effort in keeping the entire world from collapsing. There remains however, a lot of work to do. The most important challenge you face is the one where half of our elected officials, at any given time, are not working to find solutions to the needs of the nation. This is an impossible situation and ends in a half a job all the time. Not good enough. 50% is a failing grade by any measure. If the entire country worked to the standard you seem unable to correct, where would we be?
January 28, 2010 6:58 PM | Reply | Permalink
No doubt the economy was pulled back from the brink. The criticism isn't that what was done didn't help, it's that it wasn't all it should have been and the Wall Street bailouts restored the power of the people who caused the mess.
You can fix a broken car so it runs again but is still broken. That's what we did to the economy.
January 28, 2010 7:48 PM | Reply | Permalink
Dear Senator Byron Dorgan,
Good day. I have briefly read the Wikipedia Website and I have decided to repond to your TPM Cafe Post. Too briefly, please allow me to express just two views for your attention.
1) The refusal to acknowledge and/or allow cruel and unusual punishment as a crime or within an Appeal is a crime within the enactment or threat thereof the death penalty. It is also the highest precedent threat and not in compliance within any Democracy, Law and Religion. Also, please note that all your concerns which I have only partially and briefly read, apparently are all within 'In God We Trust' (which is written on every US Currency Dollar.
2) As you and many may well know and aside from the numerous fraud, wste and abuse in all US Government Spending, including health care, which may equal 50% that there is an Individual whom has dilligently and bravely with extraordinary due dilligence and many similar highly educated and also dedicated Volunteers hav successfully provided Medical Care for many decades to the most needy at approximately a very small fraction of the current Health Care Costs. Similar to a well organized local Free Health Care Clinic. If I remember correctly the name of the Organization is called Remote Area Medical.
Senator Dorgan, If you have similar concerns to properly and forthrightly, respect and regard our US Constitutional Democracy, Bill of Rights, Civil Rights and the endeavors of our US Declaration of Independence with Life, Liberty and the Pursuit of Happiness for all and with the best possible respect nd regard for God, Man and Country then please let me know if I may be of further assistance.
Please note that I have been accorded as a DOJ//INS Whistleblower for over 10 years and I have advocated for the immediate full floor vote for the full and complete and with the cultural change 'FEDERAL EMPLOYEE WHISTLEBLOWER PROTECTION ENHANCEMENT RESTORACTION ACT' for immediate passage and implementation. Also, I have also written President Obama, (to keep his written and verbal promise to Whistleblowers (and our US Constitution)) and US AG Holder, VA Chief Secretary Shensiki, Senators Kennedy, Grassely, Feinstein, Akaka and others and Congressional Persons Harmon and Waxman and others many times and without the expected and adequate replies, at best. Please contact me directly or Mr. Tom Devine at the Government Accountability and Mr. Stephen M. Kohn at the National Whistleblower Center if I and/or they may be of further assistance to these concerns.
Thank you for your time and consideration.
January 28, 2010 8:08 PM | Reply | Permalink
Drill Berry Drill..
January 28, 2010 8:33 PM | Reply | Permalink
It's very, very useful to keep the failures of the Bush administration in the public eye. The Republicans are trying to make them disappear and, if they succeed, it will be terrible for our country because they'll just try and repeat them.
Not that the Democrats are guilt free, or that their ideologies are so great either. But we're faced with a new and difficult situation and we're much more likely to find answers if no one can hide.
January 29, 2010 12:06 AM | Reply | Permalink
Thank you.
Proper and forthright 'Oversight and Accountability' is a must and mandated within our US Constitution, Bill of Rights Democracy.
Also, unanimously concurred by many formidable Blog Comment Replies on this TPM Website.
January 29, 2010 1:37 AM | Reply | Permalink
Senator Dorgan,
The "Bush" recession is an overused expression. Why not call it "Congress' recession" and then let's explain why Congress let the housing and credit bubble occur?
Also, budgets come from Congress. And what the Democrats inherited was the FY 2007 budget, the last of the Republican budgets. That deficit was one of the lowest deficits (based on dollar amount) in the last five years up to that point. After that Democrats in Congress took control of spending.
January 29, 2010 5:34 AM | Reply | Permalink
This is an example of the malign workings of the invisible hand. People are always trying to make money. Laws limit and channel their ability to do so.
As American jobs were taken by robots and foreigners the pressure to find other sources of income increased. A housing boom looked good to everyone...and we all know what happened.
Republicans recognize no limits to the pursuit of wealth and Democrats are only interested in redistribution. Real limits - to population size, to resources, to environmental destruction - are anathema to both groups. That has to change...and, unfortunately, I see no possibility of real change without violent and sudden population reduction.
January 29, 2010 1:29 PM | Reply | Permalink
In an effort to allow for many continuing, seemingly and readily available endeavor(s) towards an optomistic point of view is that the endeavors of peace for all may be successfully accomplished and achived and without the partial doomsday violent and sudden senario and as suggested in your somewhat suggested assessment.
My view is it horrific and not worthwhile and necessary for a precedent setting real change in the form a or any violent and sudden population reduction to achieve successful accomplishments towards (World) Peace and more reasonable Financial venues and applications.
They also are, tend and/or have become completely seperate issues. I presume in fact they will be discovered as completely seperate issues.
January 29, 2010 2:14 PM | Reply | Permalink
As people lost their jobs or had their wages stagnate they decided to go buy a house? Not sure I buy the argument that the housing and credit booms were due to jobs getting outsourced.
January 29, 2010 4:02 PM | Reply | Permalink
People used their houses as ATMs. Lending standards were relaxed so that those without money or jobs could buy houses. Complex financial instruments were invented, permitted, creatively used to securitize houses so more money could be channeled into the markets, to builders, architects, lenders, etc.
But it was all a bubble which depended upon a quick and endless rise in the price of houses. Obviously unsustainable and when it ceased all those who never could pay their mortgages, and never thought they would have to, defaulted and it all came apart.
Had other, better sources of income been available its doubtful that so many would have pursued this one, or that Congress would have permitted it.
Nor is this the first bubble brought one by these pressures. If one looked one could certainly trace such things back to Johnson's dishonest financing of the Viet Nam war. Maybe earlier.
January 29, 2010 4:16 PM | Reply | Permalink
“But it was all a bubble which depended upon a quick and endless rise in the price of houses.|
I respectfully disagree with your assessment.
Not all people bought houses on the expectation of a quick and endless rise.
During this time period, If you were going to ever buy a house, would have waited as the prices eventually might have stabilized. When would that have occurred?
Instead, what I see is a scapegoat process. Blame the homeowners, for the collapse.
This crisis was manufactured for one purpose only; to enslave the American middle class.
The banker/corporate class received the spoils of the class war, and the stupidly/ blind middle class underwrote the cost of the war. Fooled into believing it was the greedy homeowners who depended upon a quick and endless in the price of house.”
When the trouble started, what would have been wrong with stabilizing the housing market? No more increasing and no more devaluation.
I’ll tell you why. It didn’t serve the cause of the banker class who wanted to destroy mortgage assets.
The best Government money can buy, was complicit in the machinations of the Banking Cartels takeover of the economy of the United States.
http://tpmcafe.talkingpointsmemo.com/talk/blogs/c/m/cmaukonen/2010/01/the-state-of-the-unionteaches.php#comment-3769383
January 29, 2010 9:04 PM | Reply | Permalink
I briefy read the assessments on this thread and all appear generally to have valid concerns. I will bravely try to re-mention some concerns.
1) The Gramm-Leach-Bliley aka 1999 Financial Services Mordernization Act (which allowed for the repeal of Glass Stegal Act which was to protect Banks) and the Commodity Futures Act 2000 have been alleged as the direct cause of the Financial Collapse.
2) The US Congress and presumably along with the US Executive Office and US DOJ heard many years of Testimony yet refused to allow creditability to the 'Whistleblower' whom testified as reported and alleged today as exactly correct on approximately 2000 as to the Fraud.
3) A summation view is in part that the US Rating Agencies allowed the, reffered to as the Wall Street Investment Bank to take take these Home Mortages//Properties and as alleged fraudulently rate them and as alleged fraudulently allow these alleged corrupt securities to be used as Investment Vehicles.
4) To this date any attempt to reverse the repeal of Glass Stegal has not been allowed. Also, seemingly to allow for the necessary proper and forthright regulation has alleged to have bben denied and/or not allowed. (Incidently, Citigroup to this date has not been held accountable for Enron, with off shore Evergreen and another Citigroup//Enron entity).
5) To this date no one in our entire US Executive, Legislative and Judicial Branches of our US Government for the recent 10+ years has allowed for the more fully expected cultural 'Change We Can Believe In' and within the written promises and US Constitutional, Bill of Rights (Civil Rights) mandated and Votes to allow for the full floor vote for the 'FEDERAL EMPLOYEE WHISTLEBLOWER PROTECTION RESTORATION ENHANCEMENT ACT'.
There is more I could most likely recollect.
Thank you for allowing me to suggest an additional (impromptu frustrated) reply on these seemingly very important subject matters.
January 29, 2010 9:39 PM | Reply | Permalink
I had a little trouble understanding what you wrote. But I wanted to respond that the GLB Act is receiving far too much credit for its role in the credit bubble.
Yes it allowed Citibank to become a much larger full service bank and maybe it become "too big to fail".
But even if GLB had not been passed, we still would have had the Countrywide's and Lehman's of the world getting way to drunk on subprime mortgages and extending loans they never should have made.
Prior to the GLB Act, the commercial banks were already allowed to and already were significant players in traditional investment banking securities lines of business. Chase, Citibank, Bank of America, JPMorgan, etc. all had securities arms that were doing lots of debt/equity underwriting, M&A, derivatives, etc. For all intents and purposes Glass Steagall was already defunct prior to GLB being passed in 1999.
January 29, 2010 10:22 PM | Reply | Permalink
Thank you.
Absolutely. I certainly agree.
My disappointment appears to some and/or significant extent that all this is well known and instead of 'We the People' receiving the proper and forthright, US Constitutional, Bill of Rights mandates (especially from the Top down), 'We the People' seemingly appear to becomming extraordinarily and increasingly more victimized and/or hoodwinked and with much less than the US Constitutional, Bill of Rights mandates on behalf of 'We the People' and for the proper and forthright 'Oversight and Accountability'.
Again, Thank you and please note and as only a consumer and/or layman, (layperson) I am also aware and as I know many others are of the corruption, fraud and abuse within the Financial systems and for many deacdes.
January 30, 2010 8:53 AM | Reply | Permalink
John Paulson made a gigantic fortune by correctly noting that his peers were deceiving themselves about what was happening in the housing market. His peers; bankers, financiers, the corporate class.
Hard to argue with him....because he made a fortune while they lost their shirts.
I don't agree with Marxist analysis. In my view, the middle and lower classes are just dumber, weaker versions of the upper class. All have the same desires, the same emotional make-up. There were plenty of middle and lower class citizens who played the game and made fortunes, who weren't last fools ... or pawns who lost because they didn't play at all.
January 30, 2010 12:23 AM | Reply | Permalink
Yes people did use their houses as ATMs. But that was because lenders gave them big home equity lines at low rates.
But people without money or jobs were not going out and buying homes. Yes people were overextending themselves and taking on too much debt. But this was NOT driven by outsourcing of jobs overseas. Nobody who lost their job said "Hey - I should go buy a house - I just got fired because my job was outsourced to India". C'mon.
Rates were very low. The banks lending standards were very loose. They were able to securitize their mortgage exposure because Freddie Mac and Fannie Mae had a growing and insatiable appetite for subprime mortgages.
January 29, 2010 10:15 PM | Reply | Permalink
So you think low interest rates were the problem, for whom?
Our economy was growing, the people were employed, and tax revenues should have been up.
What's wrong with that?
Except the bankers weren't satisfied with low interest rates, so they got greedy. “Raise rates they cried. We want more interest “
The Fed hearing they're banker friends pleas, responded;. Besides; the Fed would surely benefit from a raise in rates also. How would a raise in interest rates affect the ten-year note the thirty year, I am sure these considerations were factored in?
Some say the Fed failed to act sooner, but sooner for whom?
Would it be more profitable for people who make/ made their income from higher interest rates? In order to accomplish that self serving goal they would need to manipulate the market to meet their goals; and mortgaged backed securities interfered with those goals. The working class be damned
As Eugene Debs pointed out “I am opposing a social order in which it is possible for one man who does absolutely nothing that is useful to amass a fortune of hundreds of millions of dollars, while millions of men and women who work all the days of their lives secure barely enough for a wretched existence”
This Social Order (Class) that keeps millions with barely enough for a wretched existence, LOVES higher interest rates.
Now that it appears, that the banking industry may have killed the goose that lays the Golden eggs, it is looking to do the biggest transfer of wealth since the Great Robber Baron days.
They’re looking to steal the peoples golden eggs; the homes the farm and any other asset the working class has.
Enslaving the people, to the Social Order they the banker class desires.
Instead of the Golden years for the baby boomers; it's all about golden parachutes for the crooks.
January 29, 2010 11:38 PM | Reply | Permalink
Low interest rates was one of the drivers in the housing bubble. People were able to pay higher prices because their financing costs were very low. (That's also what fueled the private equity LBO boom but that's a separate topic). The Fed cut rates dramatically after the dot-com bubble burst, 9/11 happened and the ensuing recession hit in 2002. Rates were left too low for too long and that created an asset bubble.
Much of the economic growth that you saw in 2004, 2005 and 2006 was due to significant home equity withdrawals. Strip that out and the economy wasn't really growing that much during this period.
And banks want the Fed to raise rates so they can make more interest? I've never heard that before. Their borrowing costs go up at the same time and higher rates make consumers and corporations less inclined to borrow.
January 30, 2010 11:33 AM | Reply | Permalink
You said, "People were able to pay higher prices because their financing costs were very low."
That statement is exactly what many said was the prescription for the crisis.
Why was it necessary to raise the interest rates on homes? Forcing many to abandon the homes because the house is now unaffordable. People had to leave they're homes, abandoning them, creating blight and all the other problems we see occurring. The market now flooded with homes, further devaluing the neighborhoods.
Tax revenue at the local level down.
You have bankers hoarding the money, and when they do a short sale, instead of working with the original owners , the banks can sell the homes to a new buyer at a distressed price, but the banker recovers more interest and quite possibly gets a tax break to boot.
The bankers borrow the money at 3/4 of 1% and charge the new homebuyers 5% or more.
The banks aren't interested in helping the people or the Nation
Lower interest rates made the house payment affordable, leaving more money in the hands of consumers.
We didn't need Government creating the jobs, we just needed to help the people keep they're homes affordable, and the People and not the government would have been the engine of Job growth.
Why couldn't the people have gone to the same window at the Fed? The Goldman's and other wholesalers could borrow money at 3/4 of 1% so they could make a profit.
There is more to this Fraud than a housing bubble?
GREED of the Upper Class, wanting higher interest rates, destroyed our economy.
Credit Card company’s latest shenanigans are further proof.
It's hard to sell Treasury bonds to pay for the War if the interest rates are to low.
Who wants to buy a bond and it barely pays.
It's hard to finance government projects with bonds if the bonds pay very little.
The Fed manipulated or mismanaged this crisis.
January 30, 2010 2:03 PM | Reply | Permalink
Rates move up and down. Sometimes naturally without any intervention from the Fed.
I'm not sure what you mean when you say that interest rates were raised on homes. If you mean that people's monthly payments started going up, yes that did happen. That's because people entered into teaser mortgages with low initial rates and they thought that by the time the rates would kick up, the house would be worth more so they'd be able to refinance with a bigger mortgage. House buyers got greedy.
January 30, 2010 4:00 PM | Reply | Permalink
We all know what happened. The question was how would our Government respond?
So because our government basically said “we must stay the course, because the people messed up”
The Nation must suffer?
Would that principle apply if Three mile Island had become a worst disaster, the government could say "oh well let it take it's natural course"
Our Government failed to respond properly.
The Nation had a death dealing ailment and the Government prescribed the wrong cure.
The crushing debt could be likened to the rubble in Haiti,
There were going to be victims, what was our government going to do?
We could sit around the table and talk about why the buildings collapsed. Maybe it was due to lack of regulations, or the foundation was built with inferior products, the contractors cut corners to make more profit?
In the mean time the victims are homeless, the victims don’t have the wherewithal to rebuild. So the people cry out where is our Government, the ones that have taken so much of our wages in taxes.
The very government that demanded obedience from it’s subjects demanding the tax be paid; instead of helping those who supported the government in it’s times of need, fighting in foreign lands to protect the corporate interests; our so called Peoples government sought to reimburse the insurance company first, for its losses.
January 30, 2010 8:15 PM | Reply | Permalink
Try to stay on topic because you're all over the place. I'm not saying that the government said "we must stay the course". And quite frankly the government did everything but just "stay the course". I would like to respond to your points but you have some many false accusations that it's hard to fully speak to each one.
January 31, 2010 12:21 AM | Reply | Permalink
Then speak to the ones you feel comfortable with.
In order to "connect the dots" I include what I consider to be AN ATTEMPT to bring to light the entire record of fraudulent tactics.
In this way the people can judge for themselves, that there were perpetrators and there are fall guys.
One isolated event such as homeowners owning homes they couldn’t afford, a truth, but fixing the blame solely on a homeowner as the fall guy disguises the conspiracy, committed by the Fed and the banker class who saw an advantage, took it and had a fall guy to take the heat.
Isn’t that how deception works best, or how a thief covers his trail?
January 31, 2010 6:29 AM | Reply | Permalink
I did not fix the blame solely on the homeowner. The discussion started because I disagreed with someone who said that the housing bubble was caused by jobs getting outsourced and people earning less so they decided to invest in real estate or borrow alot against their home. The banks are also to blame - many made very bad lending decisions and those that did are paying for it. Countrywide failed, so did IndyMac, Wachovia, American Home Mortgage, etc, etc. And the Fed is also to blame for its poor monetary policy.
We were debating the causes of the bubble and then you started carping about the poor response to the crisis. And then you talked about the greed of some class wanting higher interest rates. No bank wants the Fed to raise interest rates. If the Fed raised rates tomorrow the stock prices of the banks (and the rest of the market would tank). Rates are low right now and we're having a very easy time selling billions of Treasury bonds every week.
January 31, 2010 7:33 AM | Reply | Permalink
Middleclassbill, why must you become discourteous?
Rates are low and why is that?
Why would an investor before the financial crisis buy the ten year note when the return was so low?
"it does no good if those higher rates choke off growth in the real economy. that is an overlooked detail in the Bankers' grand plans for financially engineering a recovery.
http://jessescrossroadscafe.blogspot.com/2009/05/ten-year-note-yield.html
January 31, 2010 10:37 AM | Reply | Permalink
Rates are low because the Fed cut them to zero as a response to the financial crisis.
Before the financial crisis, there were plenty of investors buying 10-yr Treasuries. And there are also plenty of people buying 10-yr notes today.
I'm really confused why you think that I am fixing the blame solely on the homeowner. I am equally confused why you think banks want higher rates.
January 31, 2010 11:20 AM | Reply | Permalink
Reply below
January 31, 2010 12:41 PM | Reply | Permalink
Ummmmm...not really, it is apparently just an inventory blip.
You have accomplished a lot in your career senator, it is a bit of a shame that it is coming to an end, but the real shame is your going out as nothing more than a cheerleader for an administration more concerned with the health of Wall Street than it is with Main Street.
January 29, 2010 4:33 PM | Reply | Permalink
In answer to MiddleClassBill's upstream post
That's one way to view it but it leaves out the opportunistic and deviously designed panic
Wages failed to keep up. Now where are the wages?
Oh that's right the Government gave the money to the banks instead of stabilizing the housing industry.
Do you think there are winners under the present scenario we find ourselves in today. Is it beyond the realm of possibilites that the winners could have engineered the ability to proper under these types of conditions?
This government thought the bankers were the foundation.
They failed to heed Abraham Lincoln’s words of the true foundation of Americas prosperity.
“Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if Labor had not first existed. Labor is superior to capital, and deserves much the higher consideration.”
Labor was not given the higher consideration and in fact labor has been undermined for along time.
As people lost their homes, whole industries were wiped out. Then the problem continued to snowball. Auto workers(Labor)now affected because the proper course of action was not taken
The Government chose the wrong side to help first, in this crisis.
Notice how the bankers repaid the People's trust, the people said NO and they were right.
The best Government, money can buy sided with Capital over labor.
The banks would have gotten paid if our Government had helped the working class first. Maybe not as fast as the bankers would have liked, but the bankers got the lifeboats first as the financial ship was sinking, instead the 2nd and 3rd class passengers got screwed and the bankers survived and got rich.
You seem like a sharp person, can you tell me if Goldman or JP Morgan were entrusted to sell US treasuries or bonds, and if so would they have received a commission for doing so?
If you were a company whose income would be commensurate with the amount of product you moved. Would you have a conflict of interest, if to say you were Jamie Dimon and JPMorgan Chase, and realizing that if you could panic the market by deciding to dump your holdings in real estate? You could focus on selling Government securities instead? Create a panic like the banking tycoons did in order to start the Panic of 1907 and 1929.
People now panicked, clamoring for security and the government selling their paper backed up by the slave class. What a deal.
Undermining and throwing panic into the market, in order to make your product more appealing with the blessing of the Federal Reserve and the US Treasury, now why would they want to support housing, when it would be in their best interest to destroy Lehman and Bear Stearns who were backing mortgaged back securities in competition?
Then put on a show and bring the major banks before Congress, never intending for the whole truth to come out, in order to rewrite the history and propagate the lie that is was greedy homeowners who caused the problem
Like blaming the Christians for the burning of Rome while Nero played.
Nero had a grand design and he needed a scapegoat.
January 30, 2010 7:16 PM | Reply | Permalink
In order to keep the words compressed this is a reply to
MiddleClassBill who wrote at the very bottom, on am upstream post, and I took it as your idea of the final word or conclusion of the matter.
You wrote, "House buyers got greedy."
You also wrote upstream "Rates are low because the Fed cut them to zero as a response to the financial crisis."
If the Fed had acted sooner to prevent the housing crisis, by offering a mechanism for the homeowners to get funding at zero, we wouldn’t need a stimulus package costing taxpayers billions, and peoples live destroyed
As you clearly stated upstream " People were able to pay higher prices because their financing costs were very low. Are you suggesting if people could have afforded the higher prices of homes "because their financing costs were very low"
The Fed failed to protect the REAL ECONOMY. The Real Economy from the people’s standpoint was Real Estate, not bogus paper.
Bogus Paper with no real value except what the politicians could extract from the slave class. The very slave class it was destroying.
NOW Generations of Americans enslaved to pay back the debt.
Earlier someone brought up how people were refinancing their homes in order to pay off higher rates on credit card debt.
If you want to pin the blame on the cause of the disaster, I think you need to look no further than the banks credit card divisions.
Do you suppose Washington wanting to borrow money to run huge deficits would want to anger these greedy moneychangers? Do you think Washington really cared about the people; only caring that Government could finance Government projects and hated to have to compete for whatever money was available. Muscling the poor homeowners away.
The best Government money can buy survived, the poor working class slave screwed
Mr. Government man, can you find me a job for me? Seeing as how you destroyed the economic system we had, in order to replace it with one you wanted us to have.
January 31, 2010 12:38 PM | Reply | Permalink
Goldman and JPMorgan don't issue Treasuries. It was not in JPMorgan's best interest for Lehman or Bear to be destroyed. Mr. Dimon would prefer that this collapse had not occurred. And he would also prefer that the Fed not raise rates despite your theory that somebody got greedy.
The Fed has cut rates very low and many people who are underwater on their homes are getting the opportunity to refinance at a lower rate. But "funding at zero" is not realistic.
Yes the Fed could have acted sooner. They could have raised rates more aggressively in 2004, 2005 and 2006 as the housing bubble kept growing. They could have tried to stop the irrational exuberance that everyone had in the housing market.
This question you pose makes no sense to me - "Are you suggesting if people could have afforded the higher prices of homes "because their financing costs were very low"
I've said about all I have to say. Have a nice weekend.
January 31, 2010 1:16 PM | Reply | Permalink