Posted on 09/24/2008 7:14:26 PM PDT by Delacon
From the Corner:
Here's A Radical Thought [John Hood]
If you want to learn how to manage a winning baseball team, don't spend a lot of time talking to losing baseball managers. If you want to learn how to make it in the music industry, don't spend a lot of time talking to "artists" who've never had a gig or released an album. If you want to learn how to make a really good pasta from scratch, don't spend a lot of time talking to, well, me.
In the current financial debate, if you want to figure out how policymakers can do the most good with the least amount of harm to market incentives, the broader economy, and American freedom, don't spend a lot of time talking to Fannie/Freddie apologists and Wall Streeters. They have huge personal incentives to spin you, incentives that do not necessarily align with the interests of taxpayers. Instead, talk to leaders of banking and finance firms that continue to perform fairly well in a difficult environment.
John Allison is chairman of North Carolina's BB&T, one of the biggest and most successful banks in the U.S. (though Tar Heel State rivals Bank of America and Wachovia are larger still). He is also a passionate believer in freedom (full disclosure: he's a donor to my think tank and his company is a sponsor of my radio program). He dislikes the Paulson Plan, and thinks better alternatives exist.
BTTeffinT
BMFL.
Removing the restrictions in 1999 which allowed financial institutions to package the mortgages into these backed mortgage security investments was a much bigger problem. It created a hyper demand for bad mortgages with no rules. Mortgage companies would lie and these financial instituions did not care because they peddled them off to unknowing investors. Fannie and Freddie were bad.
This is one of the best thought out responses to the Paulson Plan that I have seen.
Sound common sense.
BUMP for tomorrow reading!
“It is completely unclear why the government needs to or should bailout insurance companies, investment banks, hedge funds and foreign companies.”
Because...just because. Because their minions are rife in the Treasury Dept., the Administration. Because they give millions in political contributions and promises of high paying sinecures after leaving office.
I like your point about the restrictions. But there are those that would say if you only deregulated more and allowed these people to invent more mysterious paper value we would all get rich Rich RICH! The same people who claimed we could “grow out of the deficit”.
Hope McCain is talking to this guy.
I am an American taxpayer who has been bled nearly dry. I paid for the S&L scandal, endured recovery from 9/11, pay for pork, taxed every way from Sunday including income tax, telecommunication tax, users fees (hidden tax), payroll tax, taxes to support those who don’t put out effort to support themselves, taxes that go to state-funded abortions, sales tax, federal excise tax, tax when I sell a house, tax when I buy a house....it does not stop. Now I’ve been asked to bail out the automotive industry to the tune of $25B and now Freddie/Fannie bailout. In this ONE CASE, I am asking for 2 things: 1) stop allowing Freddie/Fannie from making political contributions, and 2) PUNISH the wrongdoers! Start there, PLEASE! This turnip has had all the blood squeezed out of it and all I see are idiots lining their pockets truly at my expense. Let’s dress up like Indians and toss some tea into the harbor along with some Gorelicks, and Todds, and Obamas, and Johnsons, and Raines!!!!
Gee, ya think???
This is WONDERFUL stuff. Mega-bump called for!
They also have their official painting done by people with ties to the Ayn Rand art movement.
Good people. Too bad PNC has better checking for personal and business.
They also have their official painting done by people with ties to the Ayn Rand art movement.
Good people. Too bad PNC has better checking for personal and business.
While all financial intermediaries are being impacted by liquidity issues, this is primarily a bailout of poorly run financial institutions. It is extremely important that the bailout not damage well run companies.
I do believe the man has been reading my thoughts.
I was just a loan officer but I was taught that the reason for the very existence of Fanny and Freddie was that the government agreed to pay the cost of the risk of extending loans to people who didn’t have 20% to put down. The cost was pegged and the government felt that the cost to us the taxpayers was outweighed by the resultant boost to the economy and stability to society that home ownership would provide. Somewhere along the line the cost and the payoff diverged. Was this caused by “removed restrictions” that you refer to?
From the start I have though Paulson was trying one of the biggest bank robberies in the history of the world, His statement that to control the salaries of over paid thieves is just beyond belief. Maybe if they hadn't stole the company blind it would be sound.
Never heard of them, but I now want to put all my money in their bank!!
I’m sure there is good stuff all over their Wikipedia page.
Matt
I’m sure there is good stuff all over their Wikipedia page.
Matt
I’m sure there is good stuff all over their Wikipedia page.
Matt
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