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On October 20 2011 04:46 Biff The Understudy wrote:Show nested quote +On October 20 2011 02:29 aksfjh wrote:On October 20 2011 02:15 xDaunt wrote:Fairly prescient from Ron Paul: Ron Paul in the House Financial Services Committee, September 10, 2003
Mr. Chairman, thank you for holding this hearing on the Treasury Department's views regarding government sponsored enterprises (GSEs). I would also like to thank Secretaries Snow and Martinez for taking time out of their busy schedules to appear before the committee.
I hope this committee spends some time examining the special privileges provided to GSEs by the federal government. According to the Congressional Budget Office, the housing-related GSEs received $13.6 billion worth of indirect federal subsidies in fiscal year 2000 alone. Today, I will introduce the Free Housing Market Enhancement Act, which removes government subsidies from the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the National Home Loan Bank Board.
One of the major government privileges granted to GSEs is a line of credit with the United States Treasury. According to some estimates, the line of credit may be worth over $2 billion. This explicit promise by the Treasury to bail out GSEs in times of economic difficulty helps the GSEs attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a huge unconstitutional and immoral income transfer from working Americans to holders of GSE debt.
The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase GSE debt. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors.
The connection between the GSEs and the government helps isolate the GSE management from market discipline. This isolation from market discipline is the root cause of the recent reports of mismanagement occurring at Fannie and Freddie. After all, if Fannie and Freddie were not underwritten by the federal government, investors would demand Fannie and Freddie provide assurance that they follow accepted management and accounting practices.
Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.
Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary, but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.
No less an authority than Federal Reserve Chairman Alan Greenspan has expressed concern that government subsidies provided to GSEs make investors underestimate the risk of investing in Fannie Mae and Freddie Mac.
Mr. Chairman, I would like to once again thank the Financial Services Committee for holding this hearing. I would also like to thank Secretaries Snow and Martinez for their presence here today. I hope today's hearing sheds light on how special privileges granted to GSEs distort the housing market and endanger American taxpayers. Congress should act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors who were misled by foolish government interference in the market. I therefore hope this committee will soon stand up for American taxpayers and investors by acting on my Free Housing Market Enhancement Act. http://www.lewrockwell.com/paul/paul128.html Not every topic is a Ron Paul topic. Please stop treating it as such. Is internet the only place where this nonsense Ron Paul-mania happens? "The State is responsible for every evil in the world gneee". Level 0 of political thought.
Well, he did... apparently from the text, map out exactly what would happen. Go figure, someone seeing past the 4 (to 8) years pres. terms, and picturing what would happen.
Though this topic (like the post quoted 2ndly) is right, this isn't a Ron Paul topic.
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I don't understand this need to create a false dichotomy between the tea party and ows. When you say the tea party wants federal government out of business, that's half the story. When you say ows wants business out of federal government, that's half the story, too. The whole story is this: They are currently in a mutually beneficial relationship.
Capitalism has gotten a bit of a bad reputation from OWS, admittedly, but this is mostly because of a fundamental misunderstanding of what capitalism is, and what the current socioeconomic policy of the U.S. is. What we have is crony capitalism.
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On October 20 2011 04:46 Biff The Understudy wrote:Show nested quote +On October 20 2011 02:29 aksfjh wrote:On October 20 2011 02:15 xDaunt wrote:Fairly prescient from Ron Paul: Ron Paul in the House Financial Services Committee, September 10, 2003
Mr. Chairman, thank you for holding this hearing on the Treasury Department's views regarding government sponsored enterprises (GSEs). I would also like to thank Secretaries Snow and Martinez for taking time out of their busy schedules to appear before the committee.
I hope this committee spends some time examining the special privileges provided to GSEs by the federal government. According to the Congressional Budget Office, the housing-related GSEs received $13.6 billion worth of indirect federal subsidies in fiscal year 2000 alone. Today, I will introduce the Free Housing Market Enhancement Act, which removes government subsidies from the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the National Home Loan Bank Board.
One of the major government privileges granted to GSEs is a line of credit with the United States Treasury. According to some estimates, the line of credit may be worth over $2 billion. This explicit promise by the Treasury to bail out GSEs in times of economic difficulty helps the GSEs attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a huge unconstitutional and immoral income transfer from working Americans to holders of GSE debt.
The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase GSE debt. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors.
The connection between the GSEs and the government helps isolate the GSE management from market discipline. This isolation from market discipline is the root cause of the recent reports of mismanagement occurring at Fannie and Freddie. After all, if Fannie and Freddie were not underwritten by the federal government, investors would demand Fannie and Freddie provide assurance that they follow accepted management and accounting practices.
Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.
Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary, but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.
No less an authority than Federal Reserve Chairman Alan Greenspan has expressed concern that government subsidies provided to GSEs make investors underestimate the risk of investing in Fannie Mae and Freddie Mac.
Mr. Chairman, I would like to once again thank the Financial Services Committee for holding this hearing. I would also like to thank Secretaries Snow and Martinez for their presence here today. I hope today's hearing sheds light on how special privileges granted to GSEs distort the housing market and endanger American taxpayers. Congress should act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors who were misled by foolish government interference in the market. I therefore hope this committee will soon stand up for American taxpayers and investors by acting on my Free Housing Market Enhancement Act. http://www.lewrockwell.com/paul/paul128.html Not every topic is a Ron Paul topic. Please stop treating it as such. Is internet the only place where this nonsense Ron Paul-mania happens? "The State is responsible for every evil in the world gneee". Level 0 of political thought.
Those are your words not Paul's. This is a typical straw man attack that we hear very often against Paul in the media. I can use the same tactics to pigeonhole your arguments: "The state is the panacea for every problem in society."
If you want to pigeonhole Ron Paul you can say something more astute like: "Government intervention has been at the root of our economic problems."
And no the internet is not the only place where Ron Paul "mania" happens
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On October 20 2011 04:55 scaban84 wrote:Show nested quote +On October 20 2011 04:46 Biff The Understudy wrote:On October 20 2011 02:29 aksfjh wrote:On October 20 2011 02:15 xDaunt wrote:Fairly prescient from Ron Paul: Ron Paul in the House Financial Services Committee, September 10, 2003
Mr. Chairman, thank you for holding this hearing on the Treasury Department's views regarding government sponsored enterprises (GSEs). I would also like to thank Secretaries Snow and Martinez for taking time out of their busy schedules to appear before the committee.
I hope this committee spends some time examining the special privileges provided to GSEs by the federal government. According to the Congressional Budget Office, the housing-related GSEs received $13.6 billion worth of indirect federal subsidies in fiscal year 2000 alone. Today, I will introduce the Free Housing Market Enhancement Act, which removes government subsidies from the Federal National Mortgage Association (Fannie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), and the National Home Loan Bank Board.
One of the major government privileges granted to GSEs is a line of credit with the United States Treasury. According to some estimates, the line of credit may be worth over $2 billion. This explicit promise by the Treasury to bail out GSEs in times of economic difficulty helps the GSEs attract investors who are willing to settle for lower yields than they would demand in the absence of the subsidy. Thus, the line of credit distorts the allocation of capital. More importantly, the line of credit is a promise on behalf of the government to engage in a huge unconstitutional and immoral income transfer from working Americans to holders of GSE debt.
The Free Housing Market Enhancement Act also repeals the explicit grant of legal authority given to the Federal Reserve to purchase GSE debt. GSEs are the only institutions besides the United States Treasury granted explicit statutory authority to monetize their debt through the Federal Reserve. This provision gives the GSEs a source of liquidity unavailable to their competitors.
The connection between the GSEs and the government helps isolate the GSE management from market discipline. This isolation from market discipline is the root cause of the recent reports of mismanagement occurring at Fannie and Freddie. After all, if Fannie and Freddie were not underwritten by the federal government, investors would demand Fannie and Freddie provide assurance that they follow accepted management and accounting practices.
Ironically, by transferring the risk of a widespread mortgage default, the government increases the likelihood of a painful crash in the housing market. This is because the special privileges granted to Fannie and Freddie have distorted the housing market by allowing them to attract capital they could not attract under pure market conditions. As a result, capital is diverted from its most productive use into housing. This reduces the efficacy of the entire market and thus reduces the standard of living of all Americans.
Despite the long-term damage to the economy inflicted by the government's interference in the housing market, the government's policy of diverting capital to other uses creates a short-term boom in housing. Like all artificially-created bubbles, the boom in housing prices cannot last forever. When housing prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of the mortgage debt will also have a loss. These losses will be greater than they would have otherwise been had government policy not actively encouraged over-investment in housing.
Perhaps the Federal Reserve can stave off the day of reckoning by purchasing GSE debt and pumping liquidity into the housing market, but this cannot hold off the inevitable drop in the housing market forever. In fact, postponing the necessary, but painful market corrections will only deepen the inevitable fall. The more people invested in the market, the greater the effects across the economy when the bubble bursts.
No less an authority than Federal Reserve Chairman Alan Greenspan has expressed concern that government subsidies provided to GSEs make investors underestimate the risk of investing in Fannie Mae and Freddie Mac.
Mr. Chairman, I would like to once again thank the Financial Services Committee for holding this hearing. I would also like to thank Secretaries Snow and Martinez for their presence here today. I hope today's hearing sheds light on how special privileges granted to GSEs distort the housing market and endanger American taxpayers. Congress should act to remove taxpayer support from the housing GSEs before the bubble bursts and taxpayers are once again forced to bail out investors who were misled by foolish government interference in the market. I therefore hope this committee will soon stand up for American taxpayers and investors by acting on my Free Housing Market Enhancement Act. http://www.lewrockwell.com/paul/paul128.html Not every topic is a Ron Paul topic. Please stop treating it as such. Is internet the only place where this nonsense Ron Paul-mania happens? "The State is responsible for every evil in the world gneee". Level 0 of political thought. Those are your words not Paul's. This is a typical straw man attack that we hear very often against Paul in the media. I can use the same tactics to pigeonhole your arguments: "The state is the panacea for every problem in society." If you want to pigeonhole Ron Paul you can say something more astute like: "Government intervention has been at the root of our economic problems." And no the internet is not the only place where Ron Paul "mania" happens
Well said scaban.
In case you haven't realized yet, Biff is no stranger to straw man arguments. In fact, that's his bread and butter on TL.
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There is a glaring problem with the relationship between government and corporations in the modern economy, and it's been a growing issue of concern both for the left and right for some time now. This dichotomy between the left's and the right's answers to the problem is as old as the problem itself, and its manifestation in OWS vs the Tea Party shouldn't surprise anyone.
Some people believe that corruption necessitates regulations, others believe that regulations cause corruption, by giving the government the power which others want to corrupt. Often, the argument on my side goes, the market regulations aren't only a precedent for corruption but are themselves the corruption, for example when the government creates artificial monopolies in order to more easily regulate a given industry. Or when to keep the market safe from faulty products, new standards and licences are introduced which make it harder to start up a new business and thus give already established companies a competitive edge.
So long as the masses at OWS believe that more regulations are needed, that more government involvement will solve our problems, while the Tea Party believes the opposite, even though they both acknowledge the same growing problem in our society they are movements representing particular solutions to it above all, and their disagreement is fundamental.
+ Show Spoiler +That said, the Tea Party does represent all the usual problems with modern conservative political parties, that being their stance on just about every moral issue. Typically, the right wants the government out of the economy but thinks that your sex-life and other things are every bit the governernment's purpose, while the left think that morals are an individual matter while your money is everybody's business.
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They're only similar in that they're both very angry radical offshoots of their respective political groups (ows - liberalism and TP - libertarian/conservative). There's a whole bunch of different and crazy smaller ideas within each group, but those are the main concepts.
those are two pretty damn far apart ideologies. The Tea Party hates the government, and wants it be as small as possible (no Obamacare, free market, etc). OWS is regulate and tax the shit out the rich to provide for all of those below even moreso than is currently already going on.
The only area that those two groups cross up at all is that they did not like the bailouts, but for different reasons (TP is pretty much everyone sink or swim, consequences be damned, whereas OWS is support the lower class, fuck the rich). That is pretty much it—hardly common ground to be standing on.
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Regarding bailouts - I have the suspicion that OWS wouldn't be all that opposed to the bailout of General Motors which helped save a lot of good blue collar jobs with decent pay and benefits. The Tea Party hated the GM bailout even more than the bank bailouts.
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On October 20 2011 05:51 BlackJack wrote:
Regarding bailouts - I have the suspicion that OWS wouldn't be all that opposed to the bailout of General Motors which helped save a lot of good blue collar jobs with decent pay and benefits. The Tea Party hated the GM bailout even more than the bank bailouts.
The mere mention of the GM bailout actually makes my hair stand on end. I hate that bailout with every fiber of my being, and I'm pretty sympathetic to OWS.
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The bailouts make no logical sense, we will give you money... but you get to stay and not appoint new CEO's...
Ok... Who decides to feed the idiots more cash to blow?
ONTOPIC:
OWS, how's the protesting going? Don't hear to much about it in Canada.
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On October 20 2011 05:51 BlackJack wrote:
Regarding bailouts - I have the suspicion that OWS wouldn't be all that opposed to the bailout of General Motors which helped save a lot of good blue collar jobs with decent pay and benefits. The Tea Party hated the GM bailout even more than the bank bailouts.
Yeah I should have said financial bailouts. The TP definitely hated that shit, but I agree, based on the union support for OWS, they would have definitely been in support of that.
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EPT
