Arnold Kling  

Dodd, Frank apply lipstick to Paulson's Pig

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I found this story too depressing to finish. It says that we have a bipartisan agreement on a bailout, and I read only as far as the proud quotes from Chris Dodd and Barney Frank.

The unemployment rate is 6.1 percent, about average for the last 30 years. What adversity there is in the real economy is due more to oil prices than to credit market developments. Acting historic emergency legislation now is like doing a heart transplant on a patient with a head cold or calling out the National Guard to stop a food fight in the school cafeteria.

The Case Against the Bailout seems compelling, or at least worth discussing. The case for it is a vague threat issued by the nation's leaders that awful things are in store if this is not done. Awful things are in store, all right. Because of what is about to be done.

For me, this is like watching an announcement that in order to restore order Washington is being taken over by a military coup. I find it that chilling.


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COMMENTS (20 to date)
David Thomson writes:

Arnold Kling is also partly responsible for this mess. Cultural left-wingers like himself never deliberately lied on behalf the Democrats. No, he is guilty of the sin of omission. This present crisis is mostly the fault of the Democratic Party and its politically correct policies forcing lending institutions to provide mortgages to minorities with poor credit histories. Please note, however, that this harsh fact is conveniently ignored by perhaps the majority of economists who embrace secularist values.

David Thomson writes:

There is a tacit understanding among secularist minded economists: thou shall not do anything that might help anti-abortion and anti-gay marriage politicians win elections. One is not expected to outright. No, they are simply supposed leave a few key details out.

ed writes:

It is silly to believe that "politically correct policies" were the only, or even the primary cause of this mess. See this Matt Feeney blog post:

http://theamericanscene.com/2008/09/25/help-with-a-basic-question

Were the people who packaged and bought and sold mortgage backed securities ignorant of the on-the-ground conditions in actual housing markets? Didn’t they know about community organizers and low interest rates and Fannie and Freddie’s political mandates? Did they really dispose of hundreds of billions of dollars worth of investment instruments while ignorant of the basic political and regulatory conditions surrounding the underlying assets? If not, then mightn’t risk-awareness in financial institutions be a better explanation? If so, isn’t that an even better explanation?
Jose writes:

David Thomson: That was funny! I have three words for you: The Ownership Society

John Fast writes:

I'm confused -- who is this "David Thompson" and how can he be so mistaken about simple facts, let alone his values?

He ought to meet "chrisixxiveritas@aol.com" who posts to the RLCVA Yahoo! group and is his mirror image on the opposite side. For example, he blames the current "crisis" on Milton Friedman -- which is as ridiculous, and as wrong on the facts, as blaming it on you.

aaron writes:

Does it atleast include an interest rate cap for existing mortgages?

John Fast writes:

I'm making it loud and clear to all my elected officials (and everyone else within earshot or blog range) that I'm voting *against* anyone who votes for the Bailout.

For those former McCain supporters who can't stomach voting for Obama, and former Obama supporters who can't stomach voting for McCain, I strongly suggest voting for Barr or some other alternative-party candidate.

scott clark writes:

Don't worry, Arnold. You might get the military coup soon enough so you can test to see if the effects are, in fact, equally chilling.

http://www.armytimes.com/news/2008/09/army_homeland_090708w/

David writes:

For discussion: What's the over/under on Cong. Frank's share of the vote in his district this fall? In what direction has the current situation pushed the line?

Devin writes:

David Thomson - how do you equate "cultural leftism" as a premise to claim libertarian/secular economists support "lending institutions to provide mortgages to minorities with poor credit histories"? I think you need to go back to school and figure out the difference between principles of modern liberals and libertarians.

Steve Crane writes:

It is kinda silly to blame this crisis on lending to lower income households when the majority of housing defaults first came from flippers (who often had two mortgages to their names) and then no-doc borrowers in California, Nevada, Florida, and Arizona where average defaulting loan sizes were in the hundreds of thousands of dollars.

The crisis was caused by stupid lending to borrowers of low character and unknown capacity to repay, with loans secured by artificially inflated collateral. Nobody forced these lenders to make these loans. Nobody forced investors to buy their crappy paper.

Most of the complete institutional idiots have already been driven out of business. We are now left with the merely not-so-smart guys who didn't tighten traditional lending standards after observing what impact the complete idiots' behavior would have on overall default rates and collateral values.

The smart guys are the ones who went short, and of course, now are being blamed for the problems of the not-so-smart guys.

David Thomson writes:

"David Thomson - how do you equate "cultural leftism" as a premise to claim libertarian/secular economists"

These libertarian economists often value their pro-abortion views more than their economic libertarianism. They are first, last, and foremost cultural liberals! This current crisis is the fault of the Democrats. It is untruthful to claim otherwise.

David Thomson writes:

"David Thomson: That was funny! I have three words for you: The Ownership Society"

The so-called ownership society is affordable only to those with established credit histories. They have to be willing and able to pay the costs. The Democrats, however, forced lending institutions to provide “home ownership” to people of color who were poor credit risks. This politically correct nonsense started the ball game rolling. The rest is history.

Dan Weber writes:

We have two parties in this country: the party of stupid and the party of evil.

Every once in a while they get together and do something monstrous, that is both stupid and evil.

This is called bipartisanship.

David Thomson writes:

"We have two parties in this country: the party of stupid and the party of evil."

How are we to understand the above comment? Does it perhaps mean that Democrats are often stupid---but that the majority of Republicans are evil becasue of their opposition to abortion?

This article written around nine years ago might be of interest:

http://query.nytimes.com/gst/fullpage.html?res=9C0DE7DB153EF933A0575AC0A96F958260&sec=&spon=&pagewanted=1

Brad Hutchings writes:

I think what David Thomson is saying is that if we didn't abort those babies, they would be renting or buying unoccupied homes. But tell us David, do you think their credit scores would help the situation or further exacerbate it?

David Thomson writes:

"I think what David Thomson is saying is that if we didn't abort those babies..."

My central point is very simple. Pro-abortion economic thinkers lie to themselves and ignore the misbehavior of Democratic Party politicians to "protect the right to choose." They subconsciously subscribe to the doctrine: thou should do nothing to help disgusting Republicans win elections.

Brad Hutchings writes:

I'll give you credit David, you've come up with a novel troll. But I think you'll find that small-l libertarians with an economics bent despise intolerance far more than they despise Democrats. And they're not strong on partisan loyalty. Oh, and most importantly, if you look at the list of commenters here, I don't think any of us has had an abortion. Fail.

Adam Ruth writes:

How long will it be before the populace recognises that elected officials don't actually represent them in any way, shape, or form and that democracy is in fact a sham?

John Fast writes:

David Thompson: How sure are you that you are right? Let's look at libertarian economists. I'm happy to pay, say, $50 or $100 for each one who makes a statement that is pro-Democrat, or pro-abortion, if you will pay that amount for each statement which is anti-Democrat or pro-Republican.
Fair enough? We can start with this blog, since you already claimed Arnold Kling as a good example. :-D

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