I have a confession to make. I have been sucked in by the reality TV show engineered by Poison's front man, Bret Michaels. You may have heard of it "Rock of Love". Now, I watched it tonight, in spurts, because I could only take so much trash at one time, and I couldn't help but wonder....why?

Other reality TV shows like this one popped into my head, like "Real Chance at Love" and the Bachelor/Bachelorette series. Then there are those shows were the parents get to pick their grown child's "new" significant other as the parents and the "other" watch the dates as they happen.


Now, the ladies plastic little girls on the Rock of Love shindig are about as wild and weird and trashy as you can get. I would think that for a star to choose a mate, he or she would need to choose a solid, intelligent, responsible human being. After all, the business is not a constant party but a business, complete with responsibilities. The whole "let's get wasted and trash the hotel rooms every night and get coked up" ended sometimes recently with the advent of "Celebrity rehab". These former star partiers have real problems that I would suspect any current star would want to avoid, if they want continued success.

And yet, we are treated to, erm, "lovely" sex kittens with more plastic than a Barbie doll, and about the same intelligence too. Oh, and boy do they like to party. Somehow I don't think getting smashed all night and in the early Am is the way to ensure a successful band tour, you know, with deadlines and all that.

And why are the women subjecting themselves to the ultimate meat market scenario? Tramping themselves up, hoping and praying that these ...men... will choose to love them instead of the other 19 trampy girls on the show. They don't even know the guys they're competing for anyway! They know little about them...why are they humiliating themselves on national television for someone they might wind up hating anyway?

And why would the men want any kind of meaningful relationship with women who are willing to behave like that?

I seriously don't understand it. Maybe it's me, maybe I'm thick, but I don't get it. These girls will have access to the celebrities/men's funds and finances as an end result to some of these shows - do the men want to risk their life's work to a woman willing to dress like a hooker to compete with a gaggle of other equally hooker-ish women?

I guess a fool and his money are readily parted.

I know there's a fame aspect to it, I understand that. But honestly, it's more like "infamy" than fame. Yeah, so this one got naked and the other one threw up, and these two girls wanted to team up to show their sexual prowess by doing very intimate things on a public bar...they'll have great careers out that exposure.

In the porn industry.

Maybe someone could explain it to me?


The New Assualt on Patient's rights.

In yet another 11th hour decision from the Bush administration, we see a further assault on individual rights, this time, under the guise of "religious tolerance". The federal health care conscience protection statutes, or The Church Amendments (42 U.S.C. 300a-7) proposed earlier this summer, and finalized just now, on December 19th, 2008 ensures that health services do not support coercive or discriminatory policies or practices with regards to refusal of participation or assistance with morally objectionable health services or research not limited to abortion or sterilization based on the medical practitioner's religious beliefs.

In the document itself, the issues regrading the broad sweeping and vague terminology of "any medical services or research" were swept under the rug as being intentionally broad, and "self explanatory". The final draft excludes specific and inflammatory language included in the draft defining abortion as:

“Abortion” means any of the various procedures—including the prescription, dispensing, and administration of any drug or the performance of any procedure or any other action—that results in the termination of the life of a human being in utero between conception and natural birth, whether before or after implantation.

Sparking a wide controversy implying that hormonal contraceptives would be included in the category of abortifacients. The finalized document fails to include any definition of abortion, and is even broader in terminology, expanding the right of doctors, medical employees, and all "workforce" in the medical industry (including pharmacists) to deny standard medical procedures or prescriptions or "health services" on the basis of religious affiliation, or moral objection.

At what point in time did the right to practice a religion become the right to refuse to fulfill all or part of a job for which you were hired? When did the right to practice or believe in a religion become the right to force those beliefs and moral judgments onto others by way of denying services to patients, customers, and clients?

You have a right to personally practice your religion, not the right to practice your religious beliefs on others.

The main argument from supporters of such a proposal is that doctors have the right to work according to their conscience. Yes, they do, in fact they have every right to refuse to personally engage in actions they find morally reprehensible, or at the very least, against their religion. They do not have the right, however, to train for a job, apply for a job, and then refuse to do the job they intentionally acquired. For example:

A Mormon or Muslim has every right to refuse to drink or serve alcohol. In which case, applying for a job at the local Chillies or watering hole would seem like a bad idea.

A strict Christian has every right to avoid taking or prescribing birth control, in which case applying for a pharmacists or gynecological job where it is likely they will have to prescribe birth control would be a bad idea.

A Scientologist has every right to refuse to have or give psychological care, in which case, studying to be a psychologist would seem to be a poor career choice.

A Jehovah's Witness has every right to refuse to have or give blood transfusions, in which case applying to work in an ER where the likely hood of giving or assisting in blood transfusions would be a poor choice.

A modest Christian, Jew, or Muslim has every right to shun immodest dress and behavior, in which case they should not apply to work in a lingerie shop or strip club. Or even a local department store that sells "unmentionables".

Am I making myself clear yet?

This proposal has greater ramifications of the field, as noted in the LA Times:
"This kind of rule could wreak havoc in a hospital if any employee can declare they are not willing to do certain parts of their job," she said.

Refusal to act, to refer patients, and to administer time sensitive emergency care to patients in need is a detriment to patients and in contradiction to the Hippocratic Oath doctors are required to take. The article goes on to state instances where religious beliefs cause undue harm and discrimination:
ACOG cited four recent examples. In Texas, a pharmacist rejected a rape victim's prescription for emergency contraception. In Virginia, a 42-year-old mother of two became pregnant after being refused emergency contraception. In California, a physician refused to perform artificial insemination for a lesbian couple. (In August, the California Supreme Court ruled that this refusal amounted to illegal discrimination based on sexual orientation.) And in Nebraska, a 19-year-old with a life-threatening embolism was refused an early abortion at a religiously affiliated hospital.

Another argument stated for supporters is that patients can choose the doctors that best fit their beliefs. This is only partially true. First and foremost, many patients are restricted by their insurance providers (who, by the way are also listed as being able to refuse insurance coverage of any procedure they deem morally objectionable). Furthermore, there can be long waiting lists for doctors or facilities that are in high demand, and if clinics and offices decide to go the moral route, you can be certain that the waiting lists for clinics and offices that do offer all medical options will grow exponentially, leaving many patients out in the cold.

In hospitals, and often in doctors offices with more than one doctor you don't get to choose which doctor you see. They work on a rotation, and you have to see all of them at one point or another. What happens to the woman who goes into her normal gynecological office for her birth control renewal, only to face a doctor who refuses to renew her prescription based on religious belief? That doctor also has the right not to defer to another doctor at that time. The woman then has to make a special appointment, hoping she won't get another morally righteous doctor so she can get her birth control pills or IUD fitting? Who will pay for the unnecessary visit? What about rotating doctors in the ER? You come into the ER and you're bleeding out and get the only Jehovah's Witness in the place who refuses to give you a much needed blood transfusion. You die, neither the hospital nor the doctor are legally liable under this law.

How is this acceptable?

At what point did moral guidance and moral judgment become the duty of a physician?

Where are my rights as a patient to receive the medical care that is acceptable to me?

What if a doctor decides to ignore a DNR, because he or she believes it is a form of assisted suicide, and suicide is against his or her religion? This isn't acceptable. You can't go against patient's wishes in this manner.

All too often people forget that professionals such as doctors are servants. They are public servants. They are not Gods, they do not have the right to force the patient into medical care or health positions against their will. There are only a few reasons a doctor or medical professional can deny treatment, service, or prescriptions:

They are not legally licensed to prescribe, treat, or diagnose a particular medical problem.

They are obligated to not prescribe medications that counteract with other medications, or medications for patients who do not need them due to the harm it can cause. (Think, nitroglycerin pills for someone with a healthy heart).

They cannot give a false diagnosis to pacify a patient.

That's it. There is nothing about personal opinion or religious belief, the legal or medical need to deny a patient a service is not based on belief but licensing, and medical science.

I have noticed that many complain of religious protections in every employment area but the medical industry. I beg to differ. What field or profession allows employees to refuse to do their job because of religious belief? The restaurant industry? The movie industry? Sales? Production? Lending? Brokerage industries? Attorneys, mechanics, architects, plumbers, contractors, suppliers? Designers, artists, writers, singers, actors/actresses, athletes? No, they can't refuse to do their jobs.

This is not about protection of religious beliefs. This is about limiting, restricting, and possibly eliminating "objectionable" medical services. Objectionable to a select few people, that is. Just read a snippet from Secretary Mike Leavitt's blog:
Is the fear here that so many doctors will refuse that it will somehow make it difficult for a woman to get an abortion? That hasn’t happened, but what if it did? Wouldn’t that be an important and legitimate social statement?

No, Mr Leavitt, it would not be an important social statement. It would be a detrimental comment from the select few who become physicians, not the will of the people. It would be a harmful and forceful restriction of individual liberties based on the moral righteousness of a small percentage of the population who claim absolute moral authority.

LA Times
Proposals, draft
45 CFR Part 88
LA Times
Senate letter opposing the HHS proposal
LA Times
White House Considering Contraception Restrictions
HHS Moves to Define Contraception as Abortion
MoveOn.org Urges Opposition to HHS Regulations Redefining Contraception as Abortion
Final proposal
42 USC 300 - Sec. 300a-7
Hat tipThis Time This Space


The Right to Subjugate as You See Fit

Part of the feminist movement has brought to light a grave concern they have for women in marriages. This break-away group claims that fundamentalist Christian marriages subjugate and demean women, by claiming that men must be the head of household. They point out the more extreme version of this, like the Quiverfull groups who do not allow the wives to make any household decisions, decisions regarding their personal body during pregnancy or the ability to use birth control, or the right to work outside of the home as a continuation of woman abuses held over from older days.

The feminists claim that the only way to stop this type of subjugation of women is to curtail the right to marry for people in fundamentalist Christian religions to others in the same religion, fearing that not only will the women be brainwashed and abused, but that the children of these families will grow up thinking inequality and the demeaning of women where normal and acceptable behaviors.

When asked if they felt this was an attack on rights, they answered:

"They choose to belong to religions that preach this, they made that choice for themselves. And it's not like they can't get married, they just have to marry someone from outside the belief to prevent abusive behavior from becoming acceptable to society, and teaching children that this is OK. We have to protect the sanctity of womenhood."

Although the group and their cause is still rather small, they say they're gathering momentum and hope to put forth a proposition to ban fundamentalist marriages that demean women in the next four years.

In case you were wondering, I made this up. It's just one example I can think of off the top of my head that pertains to the precedent set, and the behaviors encouraged by the force of Prop 8 et al on citizens who are simply living their lives as they see fit.

I wonder how other groups would feel if all of a sudden their way of life was put under a microscope, deemed illegitimate and therefore lacking in equal rights?

**For the record, the Quiverfull sect of fundamental Christianity does, in fact, exist and espouse the virtues of family as I listed above.


The Spirit of Christmas

In the spirit of the holiday season, but keeping with my current blog obsession of economy, class struggles, and equality I'd like to post about something anecdotal, and a bit wandering.

Tonight I got to go to one of those "tours" you take through the 1800's, a Christmas themed historical story that you get to participate in. First, it's very neat, very fun, and I really get into it.

However, tonight's "theme" was Charles Dickens "A Christmas Carol". While we didn't go through the story, the theme used it to create a town that was in dire economic straights, and many townspeople were relying on charity to get by this holiday season. All but one townie, who was filthy rich and stingy - just like Ebenezer Scrooge. It was the character's introduction that struck me most (paraphrasing):

"Why should those who don't want to work hard reap the benefits of those who do? Charity? Donations? How lazy! What a joke!"

It was implied later on that he went through a literal version of the Dickens story, and became a "changed man" in the end.

But it struck me as odd at just how relevant it was to what I've been discussing now for weeks. Issues of poverty, social stigmas, capitalism and class struggles. The stereotype we hear often was perpetuated again right there, even if only an act, as a similar concept in that time period.

So I'll pose this question or two, and let you mull it over for a while.

Do low wage earners "work hard"? Think of the waitress on ha double shift, or the man who has to clean the coal cars in trains, or the man who picks up your garbage, or stands for hours putting tiny machine pieces together, or the backbreaking labor and sometimes dangerous labor of labor intensive jobs.

Now think about what a CEO does, or a manager. Gladhanding, computer work, board meetings, power lunches....sometimes the occasional tough decision. Do they "work hard"?

Does the statement that those at the top deserve, or are entitled to the massive compensation they get because they work hard ring false to you?

Lemme ask you this - if a massively wealthy person is entitled to gross over compensation for working hard, then why isn't the low wage employee entitled to the same gross over compensation for working hard, if not harder?

If it's only about "hard work" as many purport, then why isn't everyone entitled to the same wages?

Just thinking out loud here....


We agree, but only barely.

I am thoroughly enjoying this, so without further ado (And with limited quoting):

Let’s be clear that there are very few people left in this country that are proponents of a complete unregulated capitalist system.

I have heard this from you on several occasions, and I am relieved! In the Anarcho world, however, we tend to debate extremes, economically speaking, the extreme I abhor more than anything is Anarcho-capitalism. And there are more than a few who support it, unfortunately.

If they made large loans to small income families, they would eventually end up eating that loss and the company would fail. THAT serves as the warning to others. It isn’t until government steps in and says that these corrections occurring in a free market are “not acceptable” and start to meddle to control it, that the problems really begin.

That depends on what corrections you are speaking of. I agree with you that handouts to failing companies allows companies to continue poor business practices, and may even contribute to the "too big to fail" phenomenon, however the distinction between a regulation and program needs to be made. The handout, bailout, corporate welfare is not a regulation, it is a program that is offered, but not an obligation. There is no reason to believe that should Fannie and friends fail, another private industry willing to take it's place would not pop up. In fact, they already exist in the credit industry - also known as debt collection agencies that bundle debts turned risk and purchase them from lenders who gave high interest credit cards to 18 year olds, and people with notoriously bad credit. When the collection agency can't recover the debt, they sell it to another one ad naseum, essentially circulating the debt around until someone pays for it.

It should also be pointed out that "low income" doesn't equal "high risk". A family with a $30k income and stellar credit, and no debt asking for a $90k loan and has a 20% down payment is a much lower risk than a person with a $100k income, two Bankruptcies, and is currently defaulting on already existing debts.

A perfect example of this is the difference between the Big Three

We agree on this. (and most of what you mentioned previously)

Greed is no different than any other motivating emotion. It serves as a creating and driving force. It is only when greed is accompanied with rewarding bad or even illegal decisions and actions that it becomes a problem.

Be careful not to confuse greed with ambition. Ambition drives, greed is the obsession for something you've neither earned, nor deserve.

You seem to forget that these people, making bad decisions as to their own finances, taking loans they can’t afford.

In some cases, I'm sure this is true. In most cases, people only want what they can afford, and, rightfully want the best bang for their buck. However, social conditioning, as well as culturally acceptable needs play into the consumer's part in this mess more so than greed. Most low- middle income families I know would love nothing more than to get a decent house, for a reasonable price. The question, then, is who regulates the prices so that this is not feasible? (You answer that next)

You blame the corporate greed, but I put it to you that the real greed rests with the lenders who are taking these loans. If a company is greedy, and makes bad decisions because of it, they should not be rewarded with a bailout either. But without the greedy customer, this problem wouldn’t exist.

This is where we disagree - yes, I agree with the first part, but the last sentence makes little sense to me. Customers do not benefit from high interest loans, and expensive homes. "Greed" would imply that some exorbitant value has been dangled in front of them, a temptation to be snatched up. In the case of the borrower, the homes they desire come at a very high cost - where as the lenders and Realtors are the ones happily skipping to the bank with a big fat check. Agreeing to a high percentage loan for a home may be stupid, but not greedy.

Finally, you discuss how the market was doing well regulated, and how despite unregulated markets it crashed in the late 20’s. Aren’t you forgetting how it did before it crashed? If you care to examine how the US economy grew before the 20’s crash, you will see that it wasn’t exactly stagnant and dismal before that, in fact, 1870 to 1916 US production increased tenfold. That’s a slight 1000% dent in your “unregulated markets are bad” theory. The position of the US as the world leading industrial nation was created in this unregulated market.

I should have made that point more clear, but I ran out of words on my limit. (heh).

The market prior to government intervention did do well, in a bad way. The people who did well did very very well, and the people who did not slid into poverty. Upwards of 60% of the population was in poverty, to be specific. Furthermore, the economic boom pre-Depression actually helped fuel the Depression by inciting speculative lending, and purchasing on the margin.

Even without welfare programs like Fannie and Freddie, certain companies, also known as monopolies, became....."too big to fail"! Telecommunications, radio, and the auto industry, later to be followed by the banking industry and stock market. Without FDIC type insurance, when the banks closed their doors, everyone lost everything they had.

This is not a good economic policy, and this is where regulation really comes in handy.

We agree on a great deal of things - such as making better business choices. We disagree, I think, on regulations such as the CRA, and the definition of what Fannie and Freddie do. Again, they are not regulations, but voluntary programs. Meddlesome as they may seem, the inner workings of it helped to grease the wheels of this economy for a very long time, and, only with small booms and busts to speak of. And the companies who used them also thrived on it, voluntarily.

I'll wait for the second installment to see what else you have to say. I'm impressed so far - no aspirin needed....yet.

The Capitalist Chimes In

First, let’s start with the thanks. Anok has graciously opened her Blog to the Enemy. Whether she is crazy for doing it, or I am for taking the bait, remains to be seen… 

As Anok said, this isn’t about whether we are against the Bailout, we both are touchingly in agreement on that point. Maybe this simple fact should serve as a hint to Washington. If you know about Anok’s and my own normally diametrically opposed viewpoints this is a hint as subtle as a train wreck.
Anok, you raise many points here, in fact, too many to deal with in one reply, so I am going to break it down into a few answers. Effectively walking around the 800 limit 

I am going to begin by addressing your final point, that of unregulated capitalism.

Let’s be clear that there are very few people left in this country that are proponents of a complete unregulated capitalist system. I don’t know anyone that believes companies should be allowed to do anything without any consequences. For instance, you’d be hard pressed to find an American “Capitalist” that believes companies should be allowed to hire 5 year olds because their small hands and arms are just the right size to reach past that spinning saw-blade. There is undoubtedly some regulation that is necessary, warranted, and good for everyone involved. So we end up with not as much capitalism, as we do fiscally conservative ideas. To call a fiscally conservative a “capitalist” is about as accurate as calling Obama a communist. I will however loosely use the term Capitalism to denote the fiscal conservative stance since it is undoubtedly closer related to that than to the far left view of Socialism.

The problem here isn’t “Unregulated Capitalism”, the problem here is too much regulation, the efforts of Government to regulate capitalism or to be more precise to control one side of the equation only. Which is the potential negatives that come with having the benefits of capitalism.

This meddling is what has allowed companies to become “too big to fail” to begin with. (Which I’ll discuss in the next post.)

That being said, capitalism (as defined above) is essentially fair – Take a deep breath and two aspirins- I know that one made you see stars. But I promise I have a point here.

Real Conservative fiscal policy, would indeed allow for failure, which can be perceived as bad. But it would also remove any rights that these companies have to come crying when they end up making too many bad decisions. If they made large loans to small income families, they would eventually end up eating that loss and the company would fail. THAT serves as the warning to others. It isn’t until government steps in and says that these corrections occurring in a free market are “not acceptable” and start to meddle to control it, that the problems really begin.

Any side of this issue, be it left or right has to deal with the good and the bad of their own position, it’s when you try to implement the good of both sides that you end up with a clash where the bad reaches a synergy. Quite frankly, we can’t have the cake and eat it too.

Yes, there are negatives to both systems. Capitalisms problem is that it places a responsibility on the all parties not to make bad decisions. It operates on the basic assumption that a majority of decisions made will be good decisions. And it gives little or no pardon to those that makes bad ones. In the words of my old secretary,” Stupid hurts.”

A perfect example of this is the difference between the Big Three, and the foreign brands that have placed factories in for instance Tennessee. The big three have enjoyed government protectionism in order to stem their failing position on the international market. Now these Big 3 that have had that benefit, are the very ones that need more help. The foreign companies that had to fight their way into this market IN SPITE of big 3 having the backing of the US government aren’t sitting in Washington asking for 25 billion, they are functioning as they should.

You blame greed, and that is naturally a major player in this. But just to irk you a little I have to quote Gordon Gecko,” Greed is Good, Greed Works”.
Greed is no different than any other motivating emotion. It serves as a creating and driving force. It is only when greed is accompanied with rewarding bad or even illegal decisions and actions that it becomes a problem.

You seem to forget that these people, making bad decisions as to their own finances, taking loans they can’t afford. Are doing so because they are greedy to have things that their financial status can’t support. You blame the corporate greed, but I put it to you that the real greed rests with the lenders who are taking these loans. If a company is greedy, and makes bad decisions because of it, they should not be rewarded with a bailout either. But without the greedy customer, this problem wouldn’t exist.

The truly fiscally conservatives see no difference between a greedy person, and a greedy company. They both made their beds and now they have to sleep in them. Neither situation is the problem of someone else.

Finally, you discuss how the market was doing well regulated, and how despite unregulated markets it crashed in the late 20’s. Aren’t you forgetting how it did before it crashed? If you care to examine how the US economy grew before the 20’s crash, you will see that it wasn’t exactly stagnant and dismal before that, in fact, 1870 to 1916 US production increased tenfold. That’s a slight 1000% dent in your “unregulated markets are bad” theory. The position of the US as the world leading industrial nation was created in this unregulated market.

Now I’m past the 800.. so I’ll be back to post on the “too big to fail” argument next.


Bailouts, the Anarchist Perspective.

First and foremost, I should mention that right before sitting down to write this, I was pleasantly surprised with an Alternet article in my inbox titled: How kids Learn to Love Capitalism, and it essentially equated teaching capitalism to kids through vicious schoolyard games, like "kill the kid with the ball". It gave me a great big chuckle, you'll read it and understand why immediately. Second, this is my post in the dual blog post with my guest author Erik. To see what inspired the idea for this, go to Blogcatalog to see for yourself. The question at hand isn't whether or not either blogger here agrees with the bailout of companies like AIG, the "Big Three" or the credit and mortgage industry, but rather, why we don't because we have two very different reasons, and two very different opinions on the entire situation. I'll make this as simple as I can, keeping in mind this is a complicated subject. Now, on to my 800 word limited post. (The intro doesn't count! *cough*)

The problem at large is with the new economic catch phrase of the day, "too big to fail". This is the key aspect that sparked this very blog experiment. I do believe that these companies became too big to fail, but I believe they are too big to fail because the government failed to properly regulate them.

I can hear the screams now - we can't regulate progress! Success cannot be curtailed! I hear you, however if these companies were actually successful, they wouldn't be asking for a bailout, they wouldn't be failing, and they certainly wouldn't have gotten too big for their britches.

Some people blame government regulation for the economic meltdown. For example, Robert Blumen form the Mises Institute, years ago, accused Fannie and Freddie of distorting the market in a way that would cause an implosion, of sorts, or at the very least, a problem. Many people blame the Community Reinvestment Act for the huge subprime upset that has been blamed for the real estate crisis. But is this blame correct? Has the government intervention on these matters actually caused an economic implosion? What about companies like AIG? What government regulations caused their demise? Or the Big Three? The credit industry? Other than the welfare the companies willingly accepted, I don't see what government program spurred their decline. Furthermore, Fannie and Freddie went to private shareholder ownership back in '68.

Here's my theory:

Fannie and Freddie were implemented in 1938 as a quasi-private company, designed specifically to grease the wheels of capitalism. They buy bad debt, but they also lend and sell to others. They take money, and they move it around to make it all work. Some speculate that the having a semi-government run company buying up debts both good and bad is meddlesome, and interferes with the ebb and flow of free market capitalism. However, the majority of private lenders are under no obligation to sell their debts to Fannie or Freddie. In fact, the agencies were pressured by the primary lenders to ease their credit requirements for qualified lending, and, in 2004, anti-predatory lending regulations were dropped, allowing primary lenders to engage in high-risk lending practices. More to the point, Fannie and Freddie's requirements were simply too conservative, and so lenders looked elsewhere for their securities, and upped the high risk behaviors.

Some blame the CRA for this spike in high rick lending, but in fact only a sparse amount of lenders were bound to the CRA, the rest who engaged in high risk lending practices were private businesses with no obligation to do so.


In a word, Greed.

I'm going to use an anecdotal story to convey my point on this. Lending money is a risky business. The CRA low to moderate income debacle immediately creates blame for the government. However, low income doesn't necessarily equal "high risk". What low income means to banks, is "small loan, therefore, little financial reward". A lender can successfully lend money to a low to moderate income family for a home, provided that the applicant has a decent credit history, and, the homes are in affordable price ranges.

Ahh, there's the rub. Affordable homes. The real estate market, where I live, got greedy and opportunistic. The availability of wealthy people flowing into the town due to a (short lived) economic boom meant housing prices skyrocketed. The agents have to make money, right? The homeowners wanted to sell their homes for three times what they paid for it, right? The lenders wanted to make some serious money with large loans, right? That's exactly what they did, in the meantime they shot themselves and the rest of the community in the foot by putting homes in an economic bracket that was simply out of reach for the low to moderate income home buyers. Now they had to issue larger loans to people who couldn't really afford them.

Who's fault was that?

All of a sudden, there was a strain on the market, and credit started to freeze up. The securities from Fannie and Freddie were too strict, and so they deregulated them, opening credit up. In the meantime, however, the government issued a warning to Fannie and Freddie, that they had to maintain at least 30% capital to have enough of a cushion. Instead, Fannie and Freddie cooked their books, and continued buying loans beyond what their capital cushion allowed, causing their own financial meltdown.

To me, it's a bit like a child ignoring parental warnings, and asking for more and more liberties, then getting hurt. At what point was it the fault of the government for the predicament the lenders found themselves in? The regulations were in place long before this happened - and they worked just fine, to tell the truth. The so called market distortion by Fannie Mae et al seemed to sit rather well with the private industries who chose to do business with them. The CRA was being met just fine until the real estate and lenders decided they wanted to make more money.

If it was really the fault of government regulation, then why did the market do fine when they were regulated, and fall apart when deregulation occurred?

Granted there is the argument of bailouts rewarding bad companies. Rewarding companies who can't operate on their own is a bad idea, and why I disagree with the bailouts. This argument, however, can easily be put to task as the chicken or the egg. Which came first?

Well, de and unregulated markets did, actually. Pre-Depression the markets were hardly regulated at all, and they still collapsed forcing the government to step in.

I would love nothing more than for these companies to die a painful death on their own, with no welfare to save them. However, I would want that death to serve as a reminder of what needs to be done in the future to prevent Depressions from happening. The economic fallout for those of us who played no part in this mess is simply unacceptable, and I feel that regulation needs to be more strident.

For as much as I loathe the illegitimate authority of the government, I abhor the ludicrous disasters of unregulated capitalism even more. And so, while I just argued in favor of a government, it should be known it was actually an argument against unregulated capitalism.

Lending to the poor didn't cause crisis (Reuters)
Sandra F. Braunstein
Director, Division of Consumer and Community Affairs
Subprime mortgages
Before the Subcommittee on Financial Institutions and Consumer Credit, Committee on Financial Services, U.S. House of Representatives

Finance and Economics Discussion Series
Divisions of Research & Statistics and Monetary Affairs
Federal Reserve Board, Washington, D.C.

New York Times
Key facts about Fannies Mae, USA Today
Mortgage Giant Overstated the Size of Its Capital Base
Hey Big Brother, Can You Spare a Dime?
F.B.I. Looks Into 4 Firms At Center Of the Storm
Freddie Mac Ordered to Raise Capital Reserves
Fannie Mae Shares Plummet on Reports of New Violations
Fannie Mae, Wiki
Fannie Mae debt
Securities Exchange Act of 1934 - Section 13
No Action, Interpretive and/or Exemptive Letter: Fannie Mae

Finding Dulcea, business
2005 housing regulatory bill that was stalled on the floor, and never passed
Mortgage Crisis might have been worse without CRA
Subprime lending, Wiki
Subprime lending, investopedia


I'm Going to Have a Guest Author!

This week, I've decided to turn over a portion of my blog to Erik, a member of Blogcatalog for a point and counterpoint blog debate about the economy, the mortgage problems, and corporate welfare.

We'll each write a post (he limited me to 800 words!!) about our opinions on the subject matter, and then, I'm guessing chaos will commence.

A little background:

Erik and I both debate fervently on the political board on Blogcatalog, and generally have opposing views, and take turns bashing each other on the board. It's a good time had by all. In any case, we do have some great debates on there and decided this would be a fun experiment.

Now, here's my question to you guys and gals, would it be something you'd like to see an opposing viewpoint represented here on a regular basis? Maybe once a week or twice a month, or something to that effect? I was thinking it might be refreshing to read someone's words other than my own, and to hear an opinion that opposes my own.

Let me know what you think!