I'll admit that I don't fully understand all the proposals, but I did read that NYT piece. What is the difference between Conn's proposal and the new Treasury plan being discussed? Is it just that Conn would have made the language explicit and limited Paulson's discretionary power?

Conn, stop it before you go blind!

Quoting Joel_Cairo: Interesting diavlog as usual guys.

Conn, I wonder if you'd comment on the new McClatchy article making the rounds in the liberal blogosphere today: Private Sector Loans, not Fannie or Freddie, Triggered Crisis.

a late response to the fannie and freddie attack by repubs. but i thought "deregulation" was the main culprit, according to democrats who demagogued that issue ala NAFTA. you see obama accusing nowadays mccain of supporting "deregulation".

Bill and Conn in a nutshell: http://bloggingheads.tv/diavlogs/150...6:33&out=46:44

if only mccain was this articulate and coherent on the root cause of the financial crisis, he might still pull it off and win. http://bloggingheads.tv/diavlogs/150...1:27&out=35:05 but mccain only wants to talk about war and foreign policy and is uncomfortable discussing economic issues and domestic policy. (other than his pet issues--corrupt earmarks and wasteful spending--a result of him once being implicated in the keating 5.)

McClatchy's Washington bureau murks the water with Obama campaign talking points about Fannie Mae and Freddie Mac and the Community Reinvestment Act (CRA). The writers engage in journalistic prestidigitation -- look over here! no, over here! -- to try to distract from the point that it was the mismanagement and subsequent collapse of Fannie/Freddie that drove the current financial crisis. At one point, the writers claim that "rural whites" were the objects of favoritism from Fannie/Freddie! Look at this map of the areas with the highest rate of "upside down" homeowners (owing more than their homes are worth) and see if you think "rural whites" are playing any significant role in the current crisis. http://rsmccain.blogspot.com/2008/10...formation.html

voters, let's make a deal. those democrat (and republican) senators and congressmen who in 2003-2005 blocked reforms and regulation for fannie and freddie should lose their jobs. those who sounded the alarm and tried to prevent a 9/11 type financial catastrophe should keep their seats. unfortunately, the ones who ran interference for fannie and freddie will get away with it, and the republicans who were pushing for more oversight for fannie (that could have prevented this calamity) will get the axe.

Joel-
Very happy to respond to that McLatchy article. Here is the article's main argument:

More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.

Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.

Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.

The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.

First, the first two facts cited are completely irrelevant. As I explain in this post calling Krugnman out for the same sleight of hand, Fannie and Freddie don't issue any mortgages of any kind. So if they issued zero percent of all mortgages they also issued zero percent of subprime mortgages. The third line, "Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics" is a reference to the Community Reinvestment Act (CRA). And I actually agree. The CRA has little

Quoting johnmarzan: At one point, the writers claim that "rural whites" were the objects of favoritism from Fannie/Freddie! Look at this map of the areas with the highest rate of "upside down" homeowners (owing more than their homes are worth) and see if you think "rural whites" are playing any significant role in the current crisis.

The data you point at is indicative of the areas where real estate value has dropped more markedly. Additionally it shows the percentage of people for each area, that owe more than their homes are worth but doesn't tell you the absolute numbers or the aggregate dollar amount of debt. The numbers you would need to prove your point are very different. You need to have some absolute national numbers attached to demographic data and lending institutions. Short of that it seems to me it's speculation.

i love how conn managed just barely force himself to admit, in the face of his dogma, that dereg and lack of regulation was kinda sorta the problem. it's fun watching him squirm.
conn, i think you need to read the entire Times series on the issue especially the article where they play audio of the meeting in 2004 where they're talking about the big 5 investment banks deregulating (allowing more leverage) and laughing about it because they have no idea what will happen. the guy who write the software that measures their investments tells them it's a bad idea but they've got $$$ on the brain so they don't care.
the series:
http://topics.nytimes.com/top/news/b...ckoning&st=cse
the meeting:
http://www.nytimes.com/interactive/2...dia/index.html most importantly, forget about $1 trillion worth of subprime loans - they're nothing compared to the $62 trillion worth of insurance bets that COMPLETELY UNREGULATED private companies made in the last 10 years. Warren Buffett warned about them years ago. cons have anythong to say except right wing talking points we've been hearing for the last 30 years? probably not.