Skip to comments.Senate Majority Leader on Economic Woes: 'No One Knows What to Do'
Posted on 09/17/2008 2:46:43 PM PDT by Mr. Brightside
Senate Majority Leader on Economic Woes: 'No One Knows What to Do'
September 17, 2008 2:03 PM
ABC News' Z. Byron Wolf reports from Capitol Hill: Don't look for any legislation in the near future to address the financial crisis.
Senate Majority Leader Harry Reid, asked today what new regulatory actions Congress can take, said, bluntly, "No one knows what to do."
(Excerpt) Read more at blogs.abcnews.com ...
Wait, what? Nobody knows what to do? I though Obama had all the answers?
I smell a new ad coming shortly from the Schmidt Storm.
Please, will the good people of the great state of Nevada spare us this millstone the next time around!
When have rats ever known what to do?
Too busy complaining and passing blame..
Legislation?!!!! That would nothing but pour gas on the fire! Keep Washington out of it.
Reinstitute Glass-Steagal for finance industry.
Adopt Bush’s 2003 proposed reform of Fannie Mae.
It’s not that difficult.
ARREST FRANKLIN RAINES!!! He SHOULD be in Prison! Next go for ALAN GREENSPAN!! Then look at Clinton for getting rid of that Glass/? Act with the stroke of a pen!
Legislation?!!!! That would do nothing but pour gas on the fire! Keep Washington out of it.
..don't get your knickers wet Dingy, somewhere, somehow, people like yourself will get to screw it up more
I cannot comprehend the sheer idiocy and hubris of thinking that legislation or regulations can “fix” an economy. Economies either fix themselves or they don’t. Part of the pain that we’re going through is what we must go through to correct the mistakes of the past.
When government gets involved in trying to “fix” something as broad, fluid, dynamic and organic as our economy, surely no good can come of it.
Meddling by the government in the form of bailouts will only prolong the situation by preventing the system from cleansing itself of bad debt, which is the ultimate source of these current problems.
In a world that is falling apart by the minute, I thank you for posting one of the funniest pics I have ever seen!
Pardon my ignorance, but I've heard that term, derivatives, several times today. What is a derivative?
I’d start by firing every damn federal bureaucrat not involved in national security. And if that doesn’t work, I’d start hanging congresscritters.
Ronald Reagan would know what to do.
Don’t get the government involved in trying to “fix” everything.
When the government bails out sick companies, it has to take money away from healty companies in the form of taxes, or it has to borrow money (which makes it harder/costlier for healthy companies to borrow money.)
Creating a bunch of new regulations just creates more red tape that makes it harder for healthy companies to do business.
The solution is the same as it was when Reagan took office in Jan. of 1981 and inherited Carter’s disaster of an economy. Cut taxes. Not just a little, but a lot. Cut them for business even more to help healty companies expand and help others start new businesses (and so we quit taxing businesses to the point the move overseas to avoid our 2nd highest in the world corporate tax rate.)
Reduce spending. Every dollar the government spends is a dollar a business (you know, those things that create jobs and drive the economy) can’t invest to create jobs.
Ronald Reagan would know what to do.
A derivative is a synthetic security that is constructed (derived) from other securities. For example, a simple derivative security is the IO (interest only) that is constructed out of a pool of mortgages. The holder of the mortgages sells the interest payments, as a stand-alone cash flow stream, to an investor as a new “derivative” security. The remaining piece, the principal payments, are separately packaged as a PO (principal only).
It gets much more complicated, with such things as CMO residuals that you probably don’t want to know about.
This needs to go into the next McCain AD-
“Senate Majority Leader Harry Reid, asked today what new regulatory actions Congress can take, said, bluntly, “No one knows what to do.”
I seriously doubt that. However, it IS true that NO DEMOCRAT knows what to do!
As an add on to my Reagan post:
Reagan took over a disaster in 1980. When he ran for reelection in 1984, he won 49 states.
The Republican party has been running from Reagan for too long. Why? They beleive the MSM/Democrats constant refrain that the American public hated Reagan.
You don’t win 49 states because the American people hated the job you were doing!!!!!!!!!!!!!!!!
Yet Bush-1 and Dole ran as “moderate” Republicans because they thought it would attract swing voters. Bush-2 gives lip service to Reagan, but doesn’t put his ideas into practice.
You don’t win 49 states without winning “moderate”/swing voters!!!! Wake up Republicans. The solutions to this is to go back to what worked to fix our last economic crisis. Reaganomics isn’t a dirty word, it is the what won 49 states in 1984!!!!
..basically it's a MSM keyword used to cloudy the issue and deflect responsibility
Here’s a site on derivatives.
A similar concept is “securitization”. Mortgages are issued by lenders, then “bundled” and sold to others as derivative securities, traded. All the risk is transferred from the “man on the spot,” the expert in real estate, say a local bank, to a financial trading market.
The lack of responsibility serves as an incentive to issue more and riskier loans, bundle them, then take the payday. I’ve seen it for years, freelance mortgage agents going to poor peoples homes, tricking them with overvaluations of properties making them feel they can play the game too, but they lose.
Then, perhaps the biggest problem, the government encourages foreign national banks and sovereign funds to buy derivatives, along with government debt. Reading between the lines, some months ago Bernanke made his big change at time Bush hinted at this foreign issue. I think they threatened not to buy any more funny-money American products, and important to Bush, not to buy our debt which finance his tax cuts without spending cuts.
The culture of derivatives and such was pushed hard by Greenspan.
The Democratic Party House Band: Chickens Without Heads.
Isn’t that where they keeping making movies with the same old plot over and over and over and over... like Jennifer Anniston films ?
They only know how to screw up the economy, not how to fix it.
Yep, Ron Paul predicted all of this would come to pass.
Sounds like we need a new senate majority weiner,,,,,,,,uh,,,,,leader.
Schmidt hasn't run sh*t lately. Soft ads. No specifics. Back to "new tone" on the opposition. VERY disappointing.
Its time to organize a “Million Man Taxpayer” march on D.C. and grab these bastards in Congress and hang em high. Literally.
How about no taxpayer dollars to bail out private companies.
How about revoking the charter of the Federal Reserve.
Time to march on CONgress so they get the message.
Some people are trying to organize just that. Join us.
5 Things The US Federal Government Can Do Right Now That Will Strongly Improve The Situation:
1. Congress can pass a balanced budget amendment to the US Constitution, which prohibits off-budget spending as well.
2. Congress can pass a line item veto for the POTUS that he may exercise “In Consultation With Congress”.
3. Authorize the US Mint to print secure, controlled, high denomination currency, backed by the US government, that will be used for institutional monetary transfer between authorized agents, such as the government, banks, and corporations, but not individuals.
Printed in quantities to match all outstanding virtual currency. That is, literally, a “paper-backed” currency instead of an almost entirely virtual one. This means paper money denominations of $100k through $10M to match the existing virtual US currency.
This is an “anti-leverage safety device”, preventing the creation of money through leverage that is not backed by paper currency. Once US currency is backed 100% by paper, the credit system may collapse without massive and destructive deflation.
In essence, this means complete control over leveraged financial transactions. The old rule that “you cannot get a loan, unless you don’t need it”, will again apply. If you do not have cash, you can’t buy it. This insulates the economy to some extent from a credit collapse.
4. Congress can authorize the printing of an enormous number of high security debit cards, to be issued to all credit card holders in the event of a credit collapse. Banks and other financial institutions will credit these debit cards with amounts based on individual holdings, and the credit card companies will process them as if they were credit cards. This will be to protect the public from the credit collapse, by giving them an alternative means to spend money.
Many people are reliant on credit, spending more than their income on a regular basis. While they can be ruined by a credit collapse, their card should be dual purpose, so that if authorized, it can be used for food or housing aid, so they do not become destitute.
5. The federal government can remember that protecting its citizenry from financial chaos is job #1. Insure that safety nets for food, housing and health care will be stable if there is a major economic crisis.
Reid and Pelosi sure DO NOT KNOW WHAT TO DO, but you bet they surely know who they are going to BLAME for the mess! These two “leaders” are truly the worst, the most corrupt, the most inept and blantant political hacks I have seen in my lifetime.
Great idea—expose them!
No national politician has been more out front than John McCain in warning of the enormous danger posed by government backing of home mortgages.
For a decade reformers have tried to persuade Congress that they were allowing a serious risk to the governments credit to develop in Fannie Mae and Freddie Mac, but few lawmakers would take action.
One of the reasons for this was the extraordinary power of Fannie and Freddie. They not only spent close to $150 million in lobbying over the last decade, but they also got their constituentsthe securities industry, the homebuilders and the realtorsall powerful industries that depend on Fannie and Freddies largesseto support their sole legislative objective: the defeat of any attempt to control their growth. Congress, as usual knuckled under to the special interest.
However, a very small number of lawmakers saw this problem for what it was, and were willing to stand up to the power of Fannie and Freddieand I am proud to say that John McCain was one of them. In 2005, he joined a small group of Republican Senators to cosponsor the Federal Housing Enterprise Regulatory Reform Act, the strongest legislation introduced up to that time to control Fannie and Freddie. In a statement, he noted that For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac and the sheer magnitude of these companies and the role they play in the housing market If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie and Freddie pose to the housing market, the overall financial system, and the economy as a whole.
These were prophetic words, given what we know now, but they did not spring from a sudden conversion in that year. Three years earlier, McCain had introduced legislationco-sponsored with the House Democratic leader Dick Gephardtto create a Corporate Subsidy Reform Commission. The purpose of this group was to eliminate what McCain called corporate welfare. In a statement at the time, he noted that There are more than 100 corporate subsidy programs in the federal budget today, requiring the federal government to spend approximately $65 billion a year...These programs provide special benefits or advantages to specific companies or industries at the expense of hard-working taxpayers. In years past, Congress has insisted that it would eliminate the existence of this corporate welfare, but virtually no such program has been eliminated This bill aims to remove the special treatment given to politically powerful industries
In other words, as far back as 2002, John McCain realized that underlying what would ultimately become the Fannie and Freddie crisis was the willingness of Congress to provide financial support to private corporations. And he was willing to take on powerful interests to stop this process. If his bill had resulted in action at that time, the unprecedented steps that the Secretary of the Treasury and Congress had to take in the last two weeks would not have been necessary.
By contrast, Barack Obama was accepting Fannie's political contributions - and inviting its former CEO to head his vice presidential selection contrast.
I might add...
* Neither Obama nor the congressional Dems know what to do about energy security, but Repubs had the answer for decades and the Dems blocked it.
* Neither Obama nor the congressional Dems ever knew how to rein in out of control spending, but McCain does.
* Neither Obama nor the congressional Dems ever knew what to do about Iraq, Iran & the war on terror, but McCain has known all along.
* Neither Obama nor the congressional Dems knew what to do with Russia, but McCain knew.
Hasn’t Reid talked to Obama?
“No one knows what to do.”
Never stopped him from proposing stupid legislation in the past.
And these kinds of people should be running our country? WTH!?
Wouldn't that help get the economy going?
Harry Reid tells the truth for the first time in his life.
“When government gets involved in trying to fix something as broad, fluid, dynamic and organic as our economy, surely no good can come of it.”
Just wait until you see how well “fixing” global warming works out.
Well, isn't that special. Harry, you stink.
“No one knows what to do.”
I do know one thing to do. Vote for conservatives in November.
We do have a big problem, and there is plenty of blame to go around. But I want free market solutions as much as possible to fix this.
Look what happened the last time socialists took over after a economic calamity (not saying this is a calamity right now). FDR most likely slowed our recovery by a number of years from the Depression, with his anti-business attitudes.
And he left us with a partially socialized economy with monsters like Social Security and farm subsidies.
Here’s what I would do:
1. Once they’ve returned to solvency, fully privatize Fannie and Freddie. Current status notwithstanding, Fannie and Freddie never had any real restraint since they always had the underlying belief that the government would bail them out. Being totally private with no underlying “guarantee” will go a long way. FHA can still exist but as a single entity and requiring a REAL down payment (no “down payment assistance” like they have now.)
2. Phase-in a privatization of Social Security. A tiered system where new workers (under age 25 or so) pay their 6%, matched 6% by an employer, fully into an individual account (like a 401k) that has a cash value. They can see it, see what it’s worth, etc - but can’t touch it at all, unlike a 401k. This will be placed in one of a choice of safe deposits, such as a CD, annuity, etc...(if they want higher-yield and higher risk stuff, they can still have a 401 or IRA under more or less the same rules as now) and pay them a lot more at retirement than SS would. When they die, whatever cash value is left, goes to their heirs. This is a way to guarantee that most people will have an inheritance for their heirs, yet, it’s their own money, not the government’s.
For those older than 25, it’s a split - at 30, 75% goes to the retirement fund, and 25% to existing retirees...at age 40, it’s 50/50...or whatever.
3. Spending cuts - cut the fat. This will A - help keep social security (in its current form) alive while current retirees and soon-to-be retirees still get benefits without breaking the bank.
4. Eliminate federal departments in any area where such an issue could be perfectly handled (Constitutionally and practically) by the States.
5. Drill for oil and also offer tax breaks for real, useful, economical alternative energy, but don’t “force” people to adopt them.
No problemo. It is too late to do anything to prevent the coming crisis. So our idiots in government are off the hook, though I am sure that they WILL do something, and I am sure that it will do more harm than good.
But the economic pain is already baked into the cake. There is nothing to do now but watch the devastation that always comes with a collapsing credit bubble and enjoy the ride to hell in a handbasket. Somebody has to pay for the sins of the fathers.