Category Archives: Myths Exposed

A Rebuttal…

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Here is my rebuttal of this,

http://critical-thinker.net/?p=1025

First, I would not maintain that idealizing the past is solely a conservative issue. I think you can always find cases where any group idealizes the past. However, in my opinion, the fallacy in your counter argument is of cherry picking. Admittedly, I have not done any statistical analysis of how often conservatives appeal to an idealized past in their rhetoric compared to the other cases you cite. I submit these points to reinforce my point:

Point 1 – Conservative by definition implies a history to conserve. The definition of the word contains my main premise, that conservatives root their identity, heritage and notion of truth in the past. None of the other groups you mentioned call themselves by a name that essentially, in the definition of the very word, implies identification with the past. I find this to be along the lines of a tautology, it is necessarily true that conservatism implies a past to conserve and any group that calls themselves ‘conservative’ sets up an identity with the past…

Conservatism means to conserve the past.
Therefore, a conservative wants to conserve the past.

Point 2 – I think most folks would agree with my presumption that conservatives continually hearken back to a better time that proves their ideology much more than other group’s rhetoric (including the ones you mentioned). I do not think that the numbers are the same for the cases you cite – numbers and proportionality matter. Admittedly, I have not and do not plan to try to come up with stats on this so this depends on people’s own judgment that preferably do not have a vested interest in the outcome of their judgment.

Point 3 – I think this is your admonition that conservatives idealize the past…

“I think a more accurate definition of conservative is someone who wants to conserve tried-and-true traditional institutions and who supports only gradual change, believing that such things are the way they are for good reasons.”

The “tried and true” is exactly what my contention is – the ideal of the “tried and true” may not have really been ‘tried’ or ‘true’. It certainly is an interpretation that is contestable – it may have been ‘tried’ but maybe not the way people think it was tried and the outcome may not have been the ‘true’ that common, un-researched opinions may have assigned to it. Are you suggesting that everything or even most things people think are “tried” and “true” really are – are you? It is the job of propaganda to make/create the content of the ‘tried’ and ‘true’. The reality is not necessarily either and I find typically different.

Point 4 – The graph you cite in your previous post that came from here,
http://scottgrannis.blogspot.com/2011/12/federal-finances-update.html
along with this graph,
http://data.bls.gov/timeseries/lns14000000
and these from my post,
https://www.mixermuse.com/blog/2012/01/06/all-you-need-to-know-about-politics-1-6-12-2/

all demonstrate my point. When Bush took office January 20, 2001 the unemployment was 4.2%. When President Obama took office January 20, 2009 the unemployment rate was 7.8%. Four months later in May it was 9.4%. Your GDP graphs show the almost straight line up at the end of the Bush administration as well. These straight lines up started at the end of the Bush administration and peaked just after Obama took office. They have been coming down ever since. This is the point I am making and you made it for me as well. The economy is like a cruise ship. Don’t forget the recession started as a result of 8 years of a Republican president and 6 years of Republican House and Senate control. A president cannot change the economy the day he gets into office. However, there is substantial evidence that you made and I made and others that things are turning around since Obama got into office – the proof is in the pudding. All you have to do is look at the graphs and where they occur to make my point. If you look at all the data points and do not take one point like “19.7” you will see that the debt went up just as Bush was leaving and Obama was starting. Also, look at the rate of change of spending in the graph on my blog cited above. Here is a better graph from GAO data,
http://www.gao.gov/special.pubs/longterm/debt/

I am not sure where your numbers come from on your graph but they seem a little skewed from the GAO numbers.

Another thing you have not taken into account is discretionary and non-discretionary part of the budget. Discretionary spending is annual spending that the congress and the president have to deal with every year; non-discretionary is mandatory, multiyear spending that has already been committed to by previous administrations (i.e., like food stamps calculated to poverty levels). The non-discretionary portion of the 2011 budget is 59%; the discretionary is 34%.
http://nationalpriorities.org/resources/federal-budget-101/peoples-guide/

What Republicans call Obama-Care has not kicked in yet but the GAO wrote a report that I have read from start to finish that claims it will take 100 billion off the budget over 10 years as compared to doing nothing (can’t cherry pick GAO reports in my opinion – ask my wife – she retired from the GAO). However, the 1 trillion dollars over 10 years of Medicare Part D that was passed by a Republican president (Bush) and Republican dominated House and Senate has already started to hit non-discretionary spending. The non-discretionary part of the budget makes up the lion’s share of the increased debt spending that you see at the end of the Bush administration. Part is this has to do with the wars, the national disasters (FEMA) and more importantly the recession. As more people go into poverty entitlements that were all previously linked to poverty numbers kick in with much higher amounts of spending – nothing to do with President Obama.

As you can see from your graphs and the others ones I have cited, the graphs are taking a turn for the better since President Obama took office but it will take more time than a year to turn it around and a congress that cooperates with the president to get military and entitlement spending down.

Please attach further comments to the original post cited at the top – thanks.

More Interesting Information:

•Since 2001, the U.S. has spent $7.6 trillion in security-related efforts, including: Department of Defense base-line, nuclear weapons, Homeland Security and war.
•From 2000 to 2011, security-related discretionary spending increased 96% versus non-security discretionary spending which increased 39%.
•The 2011 cost of interest on the national debt which is related to military spending is $80 billion. This is equal to the 2012 budgets of Agriculture, Commerce, Interior, Labor and Transportation combined.
•2011 spending on the Iraq War ($47.4 billion) would pay for all the public disaster funding that FEMA disbursed from Fiscal Year 1999 through Fiscal Year 2010.
•2011 spending on the Afghan War ($122 billion) is greater than the 2012 deficits of 42 states and the District of Columbia combined.

http://www.commondreams.org/newswire/2011/09/08-3

http://costofwar.com/en/publications/2011/ten-years-after-911/

and,

http://costofwar.com/en/publications/2011/ten-years-after-911/ten-year-visualization/

PS

I have not researched this data yet but plan to see if this is accurate:
Medicare Part D will add 9.4 trillion over next 75 years to the debt.
http://www.cms.gov/ReportsTrustFunds/
http://krugman.blogs.nytimes.com/2009/12/29/part-d-revisited/
Joe Scarborough reports Medicare Part D will add 7 trillion over 10 years to the debt.
Credit Default Swaps were 50 to 70 trillion during the Bush years.
I will not state that this is good data until I see reputable data sources.

Rich Envy?

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In response to this post about the poor’s rich envy…

http://critical-thinker.net/?p=943

I think you may find the Economic Policy Institute has some interesting facts concerning the rich and poor.

http://www.epi.org/publication/11-telling-charts-about-2011-economy/

For example:

“In other words, the richest 5 percent of households obtained roughly 82 percent of all the nation’s gains in wealth between 1983 and 2009. The bottom 60 percent of households actually had less wealth in 2009 than in 1983, meaning they did not participate at all in the growth of wealth over this period.”
http://www.epi.org/publication/large-disparity-share-total-wealth-gain/

“In 1978, compensation of CEOs was 35 times greater than compensation of average workers. Since then, this ratio has skyrocketed, peaking at 299-to-1 in 2000. During the Great Recession, CEO pay fell relative to pay of typical workers because much of CEO compensation is directly linked to the stock market, which fell sharply in 2008 and 2009. However, the ratio bounced back during the recovery and stood at 243-to-1 in 2010. At this rate, it likely will not take long for the gap to reach its prior peak.”
http://www.epi.org/publication/ceo-ratio-average-worker/

However, the unemployment situation has improved since President Obama took office – checkout the graph.
http://www.epi.org/publication/job-seekers-ratio-remains-4-1-34th-straight/

I have also tracked this data at…
https://www.mixermuse.com/blog/2012/01/06/all-you-need-to-know-about-politics-1-6-12-2/

I think what is at issue here is not the ‘envy’ factor but the relative growing disparity between the rich and the poor and the erosion of the middle class. Put another way, how far would you let it go before you thought there may be an issue – 5% very wealthy and 95% very poor as many small countries have been historically and continue to be? Would you employ the same logic of envy and wealth creation if this were the case? In other words, have you set up an absolute ideology of your stated terms or are your concerns relative to the ‘current’ situation? If the current situations in these graphs is true or were true, is this acceptable to your current ideology? If not, what would be the trigger point where you might concede a break down in your ideology? Also, do you believe that the facts cited are wrong?

Is the relative growing disparity between the rich and the poor because the rich deserve it more or the poor deserve it less (let’s not get into blame about what party is responsible yet – just want to get an idea of your belief system)?

Interesting Note:
Here are America’s Highest Paid Chief Executives…
http://www.forbes.com/lists/2011/12/ceo-compensation-11_rank.html

The Great Recession: How the Free Market Got Rigged

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What happened after 30 trillion dollars of credit default swap derivatives flooded the worldwide market…

This is my understanding, based on the data cited here:
https://www.mixermuse.com/blog/2012/01/10/the-facts-how-the-republicans-created-our-current-economic-crisis/
http://mixermuse.com/blog/2010/10/14/how-george-bush-and-the-private-mortgage-market-created-the-perfect-storm/

In the latter part of the last decade, real estate pricing had been on the rise for decades and was due for a correction.

Credit default swaps (CDS) are private market derivatives that bundle up packages of mortgages. They were suppose to bundle higher risk mortgages with lower risk mortgages to level off the risk so that they could be sold for higher costs (less overall risk than the higher risk mortgages in the package). These packages are rated by rating agencies. In the Bush administration, regulation and rating agencies were closely aligned with the corporations and Wall Street. This has been thoroughly documented. Rating agencies and their agents were being wined and dined and were rewarding their comrades with lax regulatory enforcement and higher ratings on products like CDS.

CDS have very involved mathematical formulas that attempt to assess the risk of the package being sold. The ratings agencies are suppose to rate or endorse the validity of the risk assessment made by the company producing the derivative. The rating agencies were underfunded and did not really have the expertise to know how to accurately rate the CDS derivatives. Therefore, they were receiving ratings that were much higher than they should have been.

With the rapid increase of CDS, 900 billion to 30 trillion during the Bush years, more mortgages were needed to build the CDS packages. If you remember the last decade you will remember continual commercials on TV for ‘liar loans’. Private mortgages went up dramatically and were leaving the GSEs (Fannie and Freddie) in the dust. Everyone and their brother were jumping into the mortgage provider business. Housing pricing was going off the chart in an already inflated real estate market and house flipping was a favorite past time for many people. All this expansion was being funded by the need for CDS packages that were being sold like wildfire on the private market.

In the ‘free market’ the notion of value is really all about trust. When securities and derivatives are sold the buyer has to believe that the asking price is fair and worth doing the transaction. Even gold does not have an intrinsic value. It is also subject to trust as the recent rapid rise of asking price demonstrates. Capitalism which depends on the ‘free market’ depends on trust. Capitalism periodically has bubbles, runaway market segments where pricing goes up rapidly beyond any justifiable intrinsic value of the commodity being sold. When investors see other investors making money on inflated products they are inclined to jump in and trust that their investment will be rewarded with ever increasing pricing.

In a normal bubble cycle the market corrects itself, the latest investors to the ‘pyramid’ scheme lose and pricing goes down dramatically when the bubble bursts. This does not always happen. Occasionally the market develops ‘super bubbles’. This happened in the Great Depression. This also occurred in the CDS fiasco. In both cases lack of regulation and ratings agencies were key factors. For the CDS super bubble, instead of a ‘run on the banks’ there was a ‘run on the CDS’. The highly overinflated valuations of a super bubble carry with it the seeds of its own destruction. Trust gets strained and investors get more and more nervous as pricing goes up. This engenders more scrupulous requirements for risk assessment on the part of the investor. All the while, the requirement for more and more new mortgages to feed the beast is exasperating the oncoming doom. This is why the private mortgage market was leaving the GSEs in the dust.

Once the trust starts to break down, the market goes into panic sell mode. No investor wants to be left holding the bag. Housing valuations plummet. The housing market is left with very high inventories while pricing is out of whack for new home buyers. Mortgage holders are left holding all the risk consequences of highly inflated housing valuations and variable rate loans that make over-leveraged home owners absolutely incapable of making their payments or selling their house. So how is it that the homeowner takes the blame, all the risk and the consequences?

Anyone that blames the CDS super bubble of the last decade on the government has not understood the facts of what really happened. Wealthy Republicans control the purse strings of the Republican Party. They are the natural ones to benefit from the bubbles and super bubbles in the market. It is in their interest to find a straw man to blame when the bubble bursts and the individual mortgage holders are the last investors on the pyramid scheme. Housing valuations plummeted when the super bubble burst and the mortgage holders were left with the consequences. If Republicans allowed the idea that the ‘free market’ sometimes is rigged, people would demand oversight (regulation and independent ratings agencies) to level off the inequality of the market. Who do you think this would hurt? –wealthy Republicans of course. If the Republican electorate would maintain the same skepticism for the ‘free market’ they have for the government, market inequalities would be tilted more in their favor by electing politicians that exercise regulatory restraint on market excesses. Instead, the Republican electorate is made to believe that regulation kills the market and puts them out of jobs. Sure, a market can be regulated to death but that has never been the issue in this country. Our country has been highly tilted to the other side – no regulation and crony capitalism. How this problem has been made to be the Democrat’s fault is nuts. It is flagrant manipulation of the electorate by the Republican Party that creates this impression. If the electorate buys the Republican agenda and elects more Republican candidates, they will be throwing gasoline on the fire that will burn them alive. The next super bubble will make the Great Depression look like a time of affluence.

The Facts: Deregulation=Republicans=Economic Crisis

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Myths about the Mortgage Meltdown

Myth 1: Clinton caused the mortgage meltdown
Myth 2: Low income lending caused the mortgage meltdown
Myth 3: Bush did not contribute to the mortgage melt down
Myth 4: The private (free market) was not the cause of the mortgage meltdown

The increase of MBS (mortgage backed securities) purchased by the GSEs (Fannie and Freddie) from 2003 through 2006 under pressure from the Bush administration to meet their 56% affordable housing requirement started PRIVATE, market speculation – a 30 trillion dollar bubble worldwide on the PRIVATE, credit default swap derivatives markets – this was the cause of the housing bubble that burst into the subsequent economic crisis. Deregulation of the financial market allowed this bubble to occur. The private (free market) speculative derivative bubble caused the meltdown not the low income housing increase and subsequent loses. The low income housing loses in the Bush years resulted in tens of billions of dollars. The private market speculation for derivatives, 30 trillion dollars, is orders of magnitudes larger than the low income housing loses during the Bush years and is the only amount large enough to bring down the markets worldwide.

To understand how all this created the perfect storm see:
https://www.mixermuse.com/blog/2012/01/11/the-great-recession-how-the-free-market-got-rigged/

Even Alan Greenspan, a Republican, admitted in his interview with Brian Naylor:

BRIAN NAYLOR: The man once known as the maestro for his direction of the nation’s economy as Fed chairman sat for four long hours yesterday, watching lawmakers who once cheered his performances turn into harsh critics. Testifying before the House Oversight Committee, Greenspan didn’t down play the severity of the crisis in the nation’s markets.
Mr. ALAN GREENSPAN (Former Chairman, Federal Reserve): We are in the midst of a once-in-a-century credit tsunami. Central banks and governments are being required to take unprecedented measures.
NAYLOR: Under questioning from Democrats on the panel, Greenspan conceded he might have been, as he put it, partially wrong in not moving to regulate trading of some derivatives that are among the root causes of the credit crisis. He also admitted his free market ideology may be flawed. This exchange with committee chairman, Democrat Henry Waxman of California, verged on the metaphysical.
Representative HENRY WAXMAN (Committee Chairman, Democrat, 30th District of California): You found a flaw in the reality…
Mr. GREENSPAN: Flaw in the model that I perceived is a critical functioning structure that defines how the world works, so to speak.
Rep. WAXMAN: In other words, you found that your view of the world, your ideology was not right. It was not working.
Mr. GREENSPAN: How it – precisely. That’s precisely the reason I was shocked, because I’ve been going for 40 years or more with very considerable evidence that it was working exceptionally well.
http://www.npr.org/templates/story/story.php?storyId=96070766

In September 2002, Greenspan, Treasury Secretary Paul O’Neill, Securities and Exchange Commission chairman Harvey Pitt, and Commodity Futures Trading Commission chairman James Newsome wrote a letter to members of Congress to note their opposition to legislation that would regulate derivatives.

They wrote:

“We believe that the [over-the-counter] derivatives markets in question have been a major contributor to our economy’s ability to respond to the stresses and challenges of the last two years. This proposal would limit this contribution, thereby increasing the vulnerability of our economy to potential future stresses….
We do not believe a public policy case exists to justify this governmental intervention. The OTC (over the counter) markets trade a wide variety of instruments. Many of these are idiosyncratic in nature….
While the derivatives markets may seem far removed from the interests and concerns of consumers, the efficiency gains that these markets have fostered are enormously important to consumers and to our economy.
Greenspan and the others urged Congress “to be aware of the potential unintended consequences” of legislation to regulate derivatives.
They got it exactly wrong. Swaps and derivatives ended up undermining, not bolstering, the economy.
http://www.motherjones.com/politics/2008/10/alan-shrugged

Proof:

Certainly, a significant event that started the collapse happened during the last few years of the Clinton administration. The Gramm–Leach–Bliley Act of 1999, known as financial services deregulation,

“It repealed part of the Glass-Steagall Act of 1933, opening up the market among banking companies, securities companies and insurance companies. The Glass-Steagall Act prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company.”

http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

The bill was a compromise between the Clinton Administration and the House Republicans:

“The bill then moved to a joint conference committee to work out the differences between the Senate and House versions. Democrats agreed to support the bill after Republicans agreed to strengthen provisions of the anti-redlining Community Reinvestment Act and address certain privacy concerns; the conference committee then finished its work by the beginning of November. On November 4, the final bill resolving the differences was passed by the Senate 90-8, and by the House 362-57. This legislation was signed into law by Democratic President William Jefferson “Bill” Clinton on November 12, 1999.”
http://en.wikipedia.org/wiki/Gramm-Leach-Bliley_Act

“In 2003, the two [GSEs, Fannie and Freddie] bought $81 billion in subprime securities. In 2004, they purchased $175 billion — 44 percent of the market. In 2005, they bought $169 billion, or 33 percent. In 2006, they cut back to $90 billion, or 20 percent. Generally, Freddie purchased more than Fannie and relied more heavily on the securities to meet goals.
In 1997 the GSEs owned about 12% of the total market share of these securities. In 2001 the GSEs owned about 15% of the total market share of these securities. In 2008 this percentage had grown dramatically to 40%.
In intervening years it was much more. President Bush directed his HUD director to pressure the GSEs into buying massive amounts these MBS [Mortgage Backed Securities] on the open market. This created huge market for these securities and encouraged more and more risky private sector mortgages so they could be bought, bundled and sold on the open market largely to Fannie and Freddie.
But by 2004, when HUD next revised the goals, Freddie and Fannie’s purchases of subprime-backed securities had risen tenfold. Foreclosure rates also were rising.
That year, President Bush’s HUD ratcheted up the main affordable-housing goal over the next four years, from 50 percent to 56 percent. John C. Weicher, then an assistant HUD secretary, said the institutions lagged behind even the private market and “must do more.”
For Wall Street, high profits could be made from securities backed by subprime loans. Fannie and Freddie targeted the least-risky loans. Still, their purchases provided more cash for a larger subprime market.
“That was a huge, huge mistake,” said Patricia McCoy, who teaches securities law at the University of Connecticut. “That just pumped more capital into a very unregulated market that has turned out to be a disaster.””
“In 2003, the two bought $81 billion in subprime securities. In 2004, they purchased $175 billion — 44 percent of the market. In 2005, they bought $169 billion, or 33 percent. In 2006, they cut back to $90 billion, or 20 percent. Generally, Freddie purchased more than Fannie and relied more heavily on the securities to meet goals.
“The market knew we needed those loans,” said Sharon McHale, a spokeswoman for Freddie Mac. The higher goals “forced us to go into that market to serve the targeted populations that HUD wanted us to serve,” she said.”
But because Fannie and Freddie were buying mortgage-backed securities rather than the actual subprime loans, their involvement came too late to require stiffer standards from lenders.
Fannie and Freddie “made no progress in civilizing the market,” said Sandra Fostek, a senior regulator at HUD.
William C. Apgar Jr., who was an assistant HUD secretary under Clinton, said he regrets allowing the companies to count subprime securities as affordable.
“It was a mistake,” he said. “In hindsight, I would have done it differently.””
http://www.washingtonpost.com/wp-dyn/content/article/2008/06/09/AR2008060902626.html

Conclusion: Even though Fannie, Freddie and FHA had much less to do with new loans in the Bush administration they bought huge amounts of MBS in those years to meet President Bush’s 56% housing requirement.

Additionally, the President encouraged the GSEs to “focus” their “core housing mission” “with respect to low-income Americans and first-time homebuyers” in the following statement from the White House,

“The Administration strongly believes that the housing GSEs should be focused on their core housing mission, particularly with respect to low-income Americans and first-time homebuyers. Instead, provisions of H.R. 1461 that expand mortgage purchasing authority would lessen the housing GSEs’ commitment to low-income homebuyers.”
http://georgewbush-whitehouse.archives.gov/omb/legislative/sap/109-1/hr1461sap-h.pdf

Conclusion: President Bush had directed HUD to require the GSEs to meet the 56% low income housing requirement. This pressured the GSEs to buy massive MBS. This created a massive market for junk mortgages.

Credit Default Swaps are insurance policies on mortgages, sort of like the futures market for commodities for MBS. Credit Default Swaps are not regulated. The government did not own credit default swaps. This was purely a private market commodity.

Between 2000 and 2008, the market for such swaps ballooned from $900 billion to more than $30 trillion.
http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_default_swaps/index.html?inline=nyt-classifier

This is what brought AIG down.

Goldman Sachs played both sides MBS and Credit Default Swaps.

When the Fannie and Freddie bought huge amounts of MBS, pressured by the Bush administration, the market for credit default swaps went astronomical. This is ultimately what broke them and resulted in tax payers having to bail them out.
http://money.cnn.com/magazines/fortune/fortune_archive/2005/01/24/8234040/index.htm

If you do not believe me what about Greenspan, Treasury Secretary Paul O’Neill, Securities and Exchange Commission chairman Harvey Pitt, and Commodity Futures Trading Commission chairman James Newsome (quoted above)?

Here are the numbers that show:
1) the percent of subprime lending to total mortgage originations
2) the percent of Alt-A lending to total mortgage originations – An Alt-A mortgage, short for Alternative A-paper, is a type of U.S. mortgage that, for various reasons, is considered riskier than A-paper, or “prime”, and less risky than “subprime,” the riskiest category. Alt-A interest rates, which are determined by credit risk, therefore tend to be between those of prime and subprime home loans. Typically Alt-A mortgages are characterized by borrowers with less than full documentation, lower credit scores, higher loan-to-values, and more investment properties. A-minus is related to Alt-A, with some lenders categorizing them the same, but A-minus is traditionally defined as mortgage borrowers with a FICO score of below 680 while Alt-A is traditionally defined as loans lacking full documentation. Alt-A mortgages may have excellent credit but may not meet underwriting criteria for other reasons – http://en.wikipedia.org/wiki/Alt-A
3) GSE backed loans

http://www.mortgagebankers.org/files/News/InternalResource/57640_GAOReportInformationonRecentDefaultandForeclosureTrends.pdf

the percent of the total market of GSE and FHA, sub-prime loans (Col 1)
the default percentage of the total market (Col 2)
the amount in billions of the total market defaults (Col 3 )
Note: All currency amounts in billions
Year Col 1 Col 2 Col 3
1997 10% 0.9% $8
1999 13% 0.9% $12
2001 12% 0.7% $17
2003 11% 0.6% $21
2005 11% 1.5% $9
2007 13% 0.5% $28
Detail for Subprime Loans – see endnotes for sources (page 10 pdf)
http://www.aei.org/docLib/Pinto-High-LTV-Subprime-Alt-A.pdf
GSE Investment Portfolio and MBS ($ Billions, Left Axis)
GSE % of Total Outstanding Single Family Mortgages (Right Axis)
http://www.fcic.gov/hearings/pdfs/2010-0227-Jaffee.pdf
GAO report (page 18 for sub-prime data and page 21 for default rates data in pdf):
http://www.mortgagebankers.org/files/News/InternalResource/57640_GAOReportInformationonRecentDefaultandForeclosureTrends.pdf
http://www.aei.org/docLib/Pinto-High-LTV-Subprime-Alt-A.pdf (page 12 pdf)

This data clearly shows that:

The increase of low income, sub-prime loans and the low overall default rate of all loan originations (1.5% in 2005 was the highest tracked in this data, through 2007). This dispels that myth that the crisis was caused by loan defaults of low-income folks.

For more informations see – https://www.mixermuse.com/blog/2010/10/14/how-george-bush-and-the-private-mortgage-market-created-the-perfect-storm/

Something I blogged on the Huffington Post…

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“Class warfare has been going on for decades. Republicans are really good at propaganda. However, they have finally deconstructed themselves. They could only talk generally for so long about cutting the size of the Federal government before their rhetoric caught up to them. Now that their own people are demanding that they walk the talk, the folks that are in the “What’s the Matter with Kansas?” syndrome will find that their leaders have been picking their pocket to sell them their own watch. The Republicans must put up or shut up and this will be their demise. Yes, they would love the Democrats to do the fate fatale for them so they could sophistically blame that on the Democrats as well (as they try to blame their failed economics on the Democrats) but Obama has caught the fox in his own trap – His populism actually works and helps the middle class (Proof: https://www.mixermuse.com/blog/2012/01/06/all-you-need-to-know-about-politics-1-6-12-2/) while their populism, as is typical, does exactly what they condemn the Democrats for – split the American public (religious, crush the middle class, attack immigrants, destroy the government they say the love, change the constitution they say they want to uphold the ‘original’ intent of, etc.) . The ‘populism’ of Obama as understood by the right is finally the courage that brings into the daylight the right’s own secret class warfare against the non-elite. As is typical, the right does the damage and blames it on the Democrats (i.e., lose of AAA rating). As a an ardent socialist in the industrial revolution (corporatism on steroids), Orwell is falsely revered by the right for “Animal Farm” but Orwell would have been much more sympathetic to this, https://www.mixermuse.com/blog/2012/01/06/the-fox-and-the-hen-house/, than the unmitigated proponents of capitalism.”

After a little more thought…

There has been a ‘secret war’ going on for decades on the middle class that every economic study has shown for many years. The latest census data tells us 1 out of every 2 Americans is in poverty. Yet, we get the right’s self-righteous shrill proclamations about the newly formed class warfare project from President Obama. Republicans really merit study for the copulas conjunction of the subject, President Obama and the predicate, class warfare. Republicans have well understood “The Little Prince” and the war of all against all. The best war is the invisible war; the war that takes the moral high ground while simultaneously erasing the enemy all the while producing its dominance. In this case, policies that prefer the rich and impoverish everyone else, are ‘capitalism’, the aspiration that any old fool could be rich too and corporatism would be their self-crafted philosophy, the philosophy that reifies the exception and punishes the accidental. If the old fool was rich he would be a king and the bourgeois jester of the noble would speak with Republican lips. The drama of the fool is more powerful than his poverty. Now, these new leftists come along and tell the fool that he is dreaming; that the jester lies as sirens sing. How dare the leftist disturb the fools slumber, let him dream. The leftist is the true enemy. These nag flies get in the way of baseless dreams, the opium of truth. I must say that it is ingenious along the lines of Nietzsche’s idea of Christianity. The truly powerful is never seen. It never becomes obvious. It hides in un-thought hermeneutics. It is the only proper language. It is the language that establishes and maintains truth and excludes madness (“Madness and Civilization”). Without the proper, the fool will fail but the fool fails anyway. Here resides the aporia, the riddle. When the riddle, the conundrum, the paradox is solved it loses its passion. In this therefore, existence loses. The end of the proper announces the beginning of anarchy, the victory of chaos – but how could anarchy have a beginning – can a circle be a square? When riddles multiply, mystification abounds and canon subverts its undoing. The past is lifted into the future as revised, continually re-established in service to unseen manipulation. The horror is the actual life I live and the sacred is the one I aspire to. The taboo is my inability to buy bread and the totem is the feasts I will have when I am rich. To understand what it means to be human must think the desire for fantasy. The elite Republicans know this well and count their riches on it. Truth in a void that can only endlessly turn on itself, eat itself, to obtain its ends must hide the producer at all costs. Obama is the evil Marxist spokesman of class warfare not because he did it (class warfare) but because he said it. He spoke the profane, the improper and therefore must die in his sin…and we wonder why there was a need for postmodernism?

What is a “Postmodern Conservative”?

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There used to be a conservative website, some of its content is still around, called “The Postmodern Conservative”. I read a little content from this site as I am a little intrigued how one could maintain the conjecture of a ‘postmodern conservative’. On the surface, this is an oxymoron. Perhaps it is intended ironically. It is tantamount to thinking of Nietzsche’s nihilism and Christianity together in positive terms. Postmodern thinking seeks to overturn constructionism and its resulting epistemological result, structuralism. Postmoderism cannot be thought as a coherent, autonomous and positive philosophy. It is a symbiotic philosophy. It preys on structure and narrative. It is a methodology that deconstructs structure based on the specific structure’s own content, its counter narratives that contradict and undermine its canonical determinations. No philosophical system of thought is immune from the oxidizing effect of its most ardent iron. Deconstruction is the tool of the nihilist. In light of this, how would a ‘conservative’ postmodernists be thought except as ironically?

Their claim is further confused in their assertion that a ‘conservative’ postmodernist is more coherent that a ‘liberal’ postmodernist. This is like thinking that a Lucifer is more Christ-like than an Antichrist. What would one ‘conserve’ as a postmodernist? Why would the content of their conservation be immune from their own devices? How could a postmodern recommend ‘conservative’ content over ‘liberal’ content? Haven’t we established a canon, a ‘logocentrism’, by maintaining conservatism? If the thought is one of a sort of Darwinian mind-beating as opposed to the more conventional chest-beating in the belief that survival of the fittest is established, these folks should re-read Derrida’s essay on “Force and Signification” in “Writing and Difference”. Derrida writes, “To comprehend the structure of a becoming, the form of a force, is to lose meaning by gaining it.” 1) If the structure of ‘conservatism’ is meaningful and is to be recommended over ‘liberalism’ then, for deconstruction, its meaning is lost at the same time that it is achieved.

If, on the other hand, ‘conservatism’ here is meant to designate brute force, mystification of raw power, then power becomes that text that Derrida writes of when he states, “To say that force is the origin of the phenomenon is to say nothing” 2) He goes on to state that Hegel clearly demonstrates that force is a tautology. Force can only assert itself. Force and language amount to the same thing, the same identity. Nothing new or different is added in thinking either word. To rejoin this notion to conservatism is reminiscent of Ayn Rand and her elitist dogma; a tautology of power makes right, history IS the narrative of the conqueror. Without regard to any moral or ethical disjoins, this assertion merely redundantly marks itself. Its only claim is to force or the structuralism that it establishes. To deconstruct its specific narrative is the task of postmodernism. To deconstruct deconstructionism is to revert to constructionism and thus re-establish (or never have de-established) its myopic insistence, its force. In other words, it is to say nothing using a lot of words. While this trend has certainly not been alien to philosophy it seems to rise to the level of infinite nonsense in the thought of a “Postmodern Conservative”.

 
1) Writing and Difference, Force and Signification, page 26 (paperback)
2) Ibid, page 26 (bottom)

The Obvious: Why have Republicans suddenly found religion on the national debt?

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First, let’s start with the obvious:

From January 20, 2001 to January 20, 2009 the national debt increased from $5,727,776,738,304.64 to $10,626,877,048,913.08.  For those that still believe in arithmetic this is an 85% increase in the debt over the Bush administration’s term ((10,626,877,048,913.08 / 5,727,776,738,304.64) * 100) = 185% or an 85% increase).

From January 20, 2009 to today July 12, 2011 the national debt increased from $10,626,877,048,913.08 to $14,343,010,710,537.58.  This is a 35% increase in debt over President Obama’s term ((14,343,010,710,537.58 / 10,626,877,048,913.08) * 100) = 135% or a 35% increase).

Don’t take my word for it, check it out on the US Treasury Department site at: http://www.treasurydirect.gov/NP/BPDLogin?application=np

So, in light of the simple math, why would anyone suggest that President Obama is big government and the Republicans are not?  This is patently absurd.  President Bush and the 6 year majority of Republicans  in the House of Representatives and the Senate went from the 4 year surplus that President Clinton left to record deficits and an 85% increase in the national debt.

No amount of groveling can erase this FACT so “man up” Repubs.

Myth 1: Republicans do not favor BIG Government.

Myth 2: Republicans favor tax cuts to create jobs.

Myth 3: Deregulation increases jobs

The first part of Myth 2 is true.  Bush cut the marginal tax rates across the income spectrum.  For those making over 1 million dollars a year the income taxed over $373,650 went from a marginal tax rate of 39.6% to 35%.  The lowest income bracket marginal tax rate went from 15% to 10%.  What is not true in Myth 2 is that the Bush tax cuts increased jobs.  It increased unemployment dramatically 98% as this post documents:

http://mixermuse.com/blog/2011/07/08/the-obama-administration-raises-unemployment-25-really/

The national debt went up 85%.  We lost the four years of budget surplus that the Clinton administration gave us AND gained the stock market and mortgage market crashed as this post documents:

http://mixermuse.com/blog/2010/10/14/how-george-bush-and-the-private-mortgage-market-created-the-perfect-storm/

The deregulation of the financial industry, oil and gas and product safety (and almost every other government regulatory function) was a disaster.  The private sector, unregulated market for credit default swaps went from 900 billion to 30 trillion dollars under President Bush.  The financial collapse under President Bush was the result of a 30 trillion dollar unregulated market based on junk mortgages.

Now, after the first African-American president the Republicans deem as “socialist” has actually turned the Republican nightmare of the Bush years around, Republicans are popping out of the the wood work with newly found religion on the national debt.  Where were these disciples during the Bush years?  Could it be that spending was ok when a Republican was doing it, at least judging from the rhetorical decibel level of their party, and now that Democrats “have the checkbook” they are fuming with moral debt rage?  This is two-faced and hypocritical.  It is a laughable elitism that was deferred in part by Dick Armey’s creation of the TEA party.  It was smart to off-load the most intense Republican anger with the Bush administration with a thinly veiled, far right wing group that will still vastly vote Republican.  They can in effect be Republican in their voting habits but fantasize that they are neither Republican nor Democrat.

In any case, I am encouraged by the rising sentiment in the Republican ranks against absurd wars and wish they had joined us during the most costly wars started in the Bush administration.

Across the board, Republican ideology has failed to live up to its essential claims AND historically proven themselves to have opposite consequences.  Their counter claims about what Democrats do to the economy have also proven themselves to be fabrications and historically unfound…oh for the days of the budget surplus and the 4.7% unemployment rate of the Clinton administration. ..I would also take the 2% decrease of unemployment under President Obama to the 98% increase under President Bush.

The only way to understand how the Republicans have succeeded in their claims is to understand how “marketing” or better yet “propaganda” can be used effectively to control voters.  They are the masters of propaganda, revisionist history and sophistry.  Their ideology of “free market based” survival of the fittest gives them the latitude to employ these techniques freely.  Democrats are much less adept at these practices.  They have more resistance to lying and manipulation built into their ideology and are generally awful at it when they try.  If the Republicans succeed, the crony capitalism that results will be disastrous for the masses that gave them the votes to do it and the “middle class” will continue to disappear.

As for me, I still maintain that there are facts that are not private and some statements can be deemed more historically accurate than others.  I hope I am not in the minority.

The Obama Administration Raises Unemployment 25% – REALLY?

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When Bush Junior took office on January 20, 2001, the national unemployment rate was 4.7%.  When he left office on January 20, 2009 and President Obama took office the national unemployment rate was 9.3% ( http://www.bls.gov/cps/prev_yrs.htm ).  The current unemployment rate as of June 2001 is 9.2% ( http://www.bls.gov/news.release/empsit.nr0.htm ). Doing the math, the increase during the Bush administration was (9.3 / 4.7) * 100 = 198% or a 98% increase in unemployment.  For the Obama administration the math is (9.2 / 9.3) * 100 = 98% or a 2% decrease in unemployment.  The latest Karl Rove, Crossroads, national ad states that the national unemployment rate increased 25% during the Obama administration.  Since unemployment data by definition is published by the Bureau of Labor Statistics, no amount of “private facts” or bold face lies can explain away the real facts.  The Republican lie machine has no problem spending millions of dollars spewing forth unadulterated lies. 

Do these folks really think that sane voters would prefer a 98% unemployment rate increase to 2% percent decrease in unemployment?

Well, what about the long held theory that taxes cuts create jobs and help the economy.  We had 8 years to try this theory out.  Not only did it result in a 98% increase in unemployment but it also resulted in an economic crash and the greatest recession since the Great Depression.  Did it work?  Didn’t the Clinton administration end up with 4 years of a Federal surplus and a 4.7% unemployment rate?  Do voters really want to believe that if we try the Republican’s economic solution again it will work this time?  Are voters that stupid?

Well, what about health care and lassie faire?  We have tried decades of letting the market decide in the Republican promise that the market would solve the problem.  Did it work?  How much longer do we need to TRY the market based approach?  Ok, so let’s get rid of “Obama-care”…is the solution to go back to what we had before?  Was it so much better?  How many more decades do we need to try the market approach?  If we cut everyone off and get rid of the debt, are we willing to let men, women and children die in the streets from lack of health care while we satiate ourselves in our country clubs?  What is the solution?  Is there one?

The more interesting questions are:

1)      What kind of folks continue to spin out lies decade after decade to get and keep political power?

2)      Why does it seem to work?

When an ideology continually repeats lies to sustain and get power the word that describes it is “propaganda”.  The main purpose of propaganda is to manipulate.  There are two assumptions that propaganda proves out:

1)      Those that are have the money and power to create this marketing blitz are the elite “knowers”.  They are willing to do anything to obfuscate their true motives.  Their apparent contradictions are smoking mirrors cleverly designed to play on folk’s emotions and trick folks into supporting their true agenda – protecting the rich and powerful.  At the bottom of this machine is a pure Darwinian belief that power needs no justification, logic or truth.  Power is its own virtue.  Conquest proves who the blessed are and who the cursed are. 

2)      People are stupid.  They are “herdal” and cow-like.  They cannot remember the past and have no sense of logic and rationality.  They are zombies that can be manipulated and controlled by the elite.  They can be made to run straight off a cliff to their own demise and believe the whole time that it is in their best interest.

While the elite would never make such an explicit statement of their intentions, their actions leave no doubt as to what their game really is.  

I hope and want to believe they are wrong.  I want to believe in logic, rationality and history.  I would like to think that there is an intrinsic good in people that will overcome these schemes.  I can’t say that I do not have doubts and maybe the Darwinian instinct is correct.  However, if I were to believe this ideology I would find a certain meaninglessness and futility in existence.  Maybe we should “make friends with the enemy” as Apocalypse Now” maintains.  Maybe we should head straight of the cliffs and thank the wolves that made us believe we were doing it for our own good.  Well, as for me, I am willing to hope against hope, if that is what it takes, to adopt a more optimistic approach to human existence.  I suppose that this may be a kind of Kierkegaardian, existential staking out my “eternal happiness” on an absolute paradox…at least as thought from the dialectic of power.  These choices are left to us individually whether we explicitly know it or tacitly “do it”.  I find the belief that one is the “blessed” and “all-powerful” to be a comic tragedy of one’s own making in which the hero becomes the blind fool and forgets his end will be in the dust with his cows while the only thing that really mattered was humanity and concern, optimism and belief, the virtue of work – of harmony and balance with nature and logic, the scorned simplicity that faces us in the other.

Racism, Sexism, Homophobia and Republicans

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In G.W. Bush’s recent interviews for his book “Decision Points” he discusses how he was enraged at Kanye West’s comments that imply he was a racist due to the Katrina disaster and the apparent lack of concern for black, impoverished folks.  The new right has been accused of being racist and sexist but the cutting edge of that movement denies the charge.  The first point I would like to make is that racists and sexists most commonly find their ideological home in the Republican Party.  Recently, the tea party has skirted these accusations.  Ken Buck the tea party candidate for U.S. Senator was caught making a sexist comment about “not wearing high heels” on video.  Mark Kirk, the Republican U.S. Senate candidate in Illinois, was accused of voter intimidation of blacks in Chicago, http://mixermuse.com/blog/2010/10/25/republicans-intimidate-minorities/.  Tea party signs have made derogatory comments about blacks and gays.  The highly charged venom towards Nancy Pelosi goes way beyond the traditional forms of disagreements in politics and appears highly vindictive towards the most effective women Speaker of the House in U.S. history.  It seems to me to cross the line into sexism and rage fueled by a woman beating white men handily at their own game.  In spite of these suspicions, this kind of overt racism, sexism and gay homophobia seems to be relegated the periphery of the Republican Party and can easily be dismissed as extremist party faithfuls. 

The most potent form of racism, sexism and homophobia is what has now become institutional.  Republicans did not have anything against blacks but the Republican faithful in Louisiana, possibly the most Republican state in the United States, was all too happy to let the failing and ancient levees in New Orleans come to their inevitable demise.  Did it matter that those behind the levees were poor and black?  If they were rich and white would that have mattered?  If young, single women were rich, voted and were padding the pockets of Republicans would the Republicans allow the anti-abortion movement to dominate their ideology?  If gays were an important component in Republican successes would they oppose equality as vehemently?  When the institution permits these kinds of injustices the individual is no longer on the hook.  It is the system’s fault, no one is personally responsible.  Some even go so far as to blame it on the Democrats.  Folks do not need to be racist or sexist anymore they can just go along with the status quo to achieve the same social results.  They can even personally state they are abhorred by racism and sexism and still let their conservatism conserve the inequities.  This is a concrete example of how the ‘it’ of truth and the absolution of responsibility in the neutrality of the institution have preserved inequity while absolving the individual (See http://mixermuse.com/blog/2010/11/10/responsibility-and-the-goods/). 

While President Bush had his feelings hurt by Kanye West men, women and children were hurt in much more substantial ways that makes the feelings of Bush quite insignificant…and yet, Bush had his hurt feelings blasted all over the media while selling his memoir.  Here is a thought, why not donate the proceeds of the book to the survivors of Katrina?

Colorado State Budget FAQ

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Blogger – I really am not against helping the underserved. But the lines in this country as to who the truly underserved are have become increasingly murky as the poor have become big business. 30% of our state budget is huge, and will become much more under ObamaCare

This is Colorado State budget information for 2010-2011 and the previous year 2009-2010. 

In the previous year Medicaid was 22% of the budget.  For the current year it is 17.7% of the state budget.

Human Services are 9.2% of the budget.  This includes money for developmental disabilities or mental illness, juvenile delinquents, and children who are the victims of abuse and neglect.

Here are the state numbers, what would you cut and how much?  You have already said you would eliminate Social Security.  What about Medicaid, CHIP, Welfare?  What about the safety net program you mentioned.  What is that and how much percent wise are you willing to spend on this?

97% of the FY 2010-11 General Fund appropriation is devoted to just five areas of service:

  • 45.6%, K-12 Education is the largest component of the General Fund budget and was off limits when balancing in FY 2009-10 due to a required 5% General Fund increase.
  • 17.7%, Health Care Policy and Financing provides services that are mostly entitlement programs that have a counter-cyclical relationship with the economy. When the economy goes down, Medicaid enrollments go up.
  •  9.2%, Human Services are provided to the state’s most vulnerable and highest risk populations such as those with developmental disabilities or mental illness, juvenile delinquents, and children who are the victims of abuse and neglect.
  •  15.2%, Corrections, Public Safety and Judicial provides public safety services. Staffing levels that were reduced during the last recession have still not been restored. Judicial staffing was increased pursuant to HB 07-1054.
  •  9.3%, Higher Education is one of the last remaining areas of the budget where there continues to be budgetary flexibility and where federal stimulus funds have mitigated major reductions for our state’s colleges and universities.

 

http://www.colorado.gov/cs/Satellite?blobcol=urldata&blobheader=application%2Fpdf&blobkey=id&blobtable=MungoBlobs&blobwhere=1251665650766&ssbinary=true

Previous Year Budget

 

2010 State spending & deficit in billions[6]

Total spending Pension Health care Education Welfare Protection Transport Deficit Budget gap
$19.6 $3.2 $4.4 $4.8 $1.7 $1.7 $1.2 $17.9 $1.6


a $26 billion plan to give states money for Medicaid and education that the President signed into law on August 10, 2010

http://sunshinereview.org/index.php/Colorado_state_budget

Here are the Federal numbers for Health Care Reform.  I have not seen how Health Care Reform affects the sates with the 26 billion dollar kickback but I do know this…

Here are the CBOs Long Term Budget Outlook for 2009 and 2010.  This is pre-Health Care Reform and post-Health Care Reform.  These quotes are taken from the section dealing with health care costs.

Percent of GDP Chart Projected 2035
Pre-HCR, 2009 Projection Medicare Total Spending 8%
Pre-HCR, 2009 Projection Medicaid, CHIP 5%
Post-HCR, 2010 Projection Medicare Total Spending 6%
Post-HCR, 2010 Projection Medicaid, CHIP, Subsidies 4%


Total spending for Medicare is projected to increase to 8 percent of GDP by 2035 and to 15 percent by 2080. Total spending for Medicaid is projected to increase to 5 percent of GDP by 2035 and to 7 percent by 2080. (2009 page 35 in pdf)

Under the extended-baseline scenario, which reflects current law, federal spending for those (Medicare, Medicaid, the Children’s Health Insurance Program, and the insurance subsidies) programs would grow from 5.5 percent of GDP today to about 10 percent of GDP in 2035; about 6 percent of GDP would be devoted to Medicare, and about 4 percent would be spent on Medicaid, CHIP, and the exchange subsidies. (2010 page 41 in pdf)

The Long Term Budget Outlook 2009

http://www.cbo.gov/ftpdocs/102xx/doc10297/06-25-LTBO.pdf

The Long Term Budget Outlook 2010

http://www.cbo.gov/ftpdocs/115xx/doc11579/06-30-LTBO.pdf