Ron Paul On Face The Nation

[LongLiveYorke 38]

Agreed, he's off by a factor of 10 at least. I think it was all pretty obvious, but it's obviousness is damning for a lot of people. Some of the supposed reasons for entering the war on Iraq hadn't even been discovered. Abuses of the Patriot Act hadn't happened, but obviously would by the nature of power. I also think we're experiencing much higher rates of inflation than the CPI indicates.

I mean, I'm not saying that a lot of people in congress DIDN'T see some of the things he said. Because I'm sure many didn't because they're, to put it mildly, not so bright.But that doesn't make RP a prophet, and it's strange when some people try to dress him as one.

[hblask 1]

I mean, I'm not saying that a lot of people in congress DIDN'T see some of the things he said. Because I'm sure many didn't because they're, to put it mildly, not so bright.But that doesn't make RP a prophet, and it's strange when some people try to dress him as one.

Ron Paul was typical a lone voice or one of a handful voting against these harmful polices. Prophet, no, but certainly one of the few people in congress (or the White House) capable of logical thought and learning from history. As I said, everyone else in congress falls into one of two categories: they didn't see this coming, making them too stupid to serve, and they did see this coming and are knowingly voting for the destruction of this country.

[LongLiveYorke 38]

Ron Paul was typical a lone voice or one of a handful voting against these harmful polices. Prophet, no, but certainly one of the few people in congress (or the White House) capable of logical thought and learning from history. As I said, everyone else in congress falls into one of two categories: they didn't see this coming, making them too stupid to serve, and they did see this coming and are knowingly voting for the destruction of this country.

Except he completely failed to see the cause of the financial crisis. Saying, "there will be a crisis" isn't the same as saying that there will be a crisis and telling how it will come about in a way that can be prevented.Or am I missing the when he pushed to make credit default swaps illegal or voted for regulation limiting the leverage of banks, etc etc

[BaseJester 1]

Except he completely failed to see the cause of the financial crisis. Saying, "there will be a crisis" isn't the same as saying that there will be a crisis and telling how it will come about in a way that can be prevented.Or am I missing the when he pushed to make credit default swaps illegal or voted for regulation limiting the leverage of banks, etc etc

You're missing the root cause."The special privilages granted to Fannie Mae and Freddie Mac have distorted the housing market by allowing them to attact capital they could not attact under pure market conditions. Like all artifically created bubbles the boom in housing prices cannot last forever. When house prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of mortgage debt, will also have a loss. These losses will be greater had government policy not actively encouraged over-investment in housing"-Ron Paul 2003

[strategy 4]

My company has people devoted to analyzing the economy, and a large part of that is analyzing how policies affect business.We're up about 100% in the last 5 years.Yes, expectations matter to good companies.

clearly you and I disagree on how much impact the politicians can have on the economy in the short term. I feel like there should be something other than noise in market returns vs. ruling political party throughout US history if you were correct about this. I'm not accusing you of not doing your homework or anything, but you might wanna have that bias looked at.

[BigDMcGee 3,352]

I don't think he sets up a strawmen. It is generally understood among progressives(and by Greenwald) that many if not most intellectual progressives do not like Obama. The only question is whether Obama is the lesser of two evils. I would side with the "vote him out" option. Obama has been a complete disaster for liberals. If we continue to support him, then we lose any ability to ever influence policy since politicians with the Democrat label could do anything they want and get away with it. Now that the crazies have been eliminated, there is no reason at all to support Obama. Let Romney win and have the Republicans take some of the blame for the mess they have worked so hard to create.

Yeah, I don't really care about advanced strategy geared to get Democrats back in long term power, or assign blame to republicans. I think both parties are rotten and terrible. If Rommney gets a terrible Veep candidate that is pandering to the religious right, I'll vote for Obama again. if not, I'll likely stay home because I think my vote will literally not matter, that US policy will be basically exactly the same.

[FCP Bob 1,312]

You're missing the root cause."The special privilages granted to Fannie Mae and Freddie Mac have distorted the housing market by allowing them to attact capital they could not attact under pure market conditions. Like all artifically created bubbles the boom in housing prices cannot last forever. When house prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of mortgage debt, will also have a loss. These losses will be greater had government policy not actively encouraged over-investment in housing"-Ron Paul 2003

He was correct in seeing the housing bubble.He was incorrect in what the most important causes of the housing bubble were. Freddie and Fannie were a relatively small part of the reason that housing prices were overvalued. General government policy under both the Dems and Republicans was condusive to the housing bubble being created but mostly it was low interest rates, lack of regulation and too low capital requirements for banks and the fact that the mortgage origination process got totally removed from the risk of those loans.The housing bubble on it's own didn't create the finanicial crisis, in fact if the only problem was bad mortgages the financial industry could have worked that out in an orderly fashion. The nuclear bomb was the credit default swaps and the total lack of regulation of them.An analogy that I've used before is that the bad mortgages were the conventional trigger in a nuclear bomb with the CDS's as the thurmonuclear core.

[BaseJester 1]

He was correct in seeing the housing bubble.He was incorrect in what the most important causes of the housing bubble were. Freddie and Fannie were a relatively small part of the reason that housing prices were overvalued. General government policy under both the Dems and Republicans was condusive to the housing bubble being created but mostly it was low interest rates, lack of regulation and too low capital requirements for banks and the fact that the mortgage origination process got totally removed from the risk of those loans.

Why do you think that the businesses that bought this bad debt were willing to do so? They were financial fools? They believed that the government would ultimately back those loans? Something else?If regulation means keeping those banks from getting "too big to fail", I agree. If regulation means a government bureaucracy in charge of assessing investment risk, I'm skeptical.

[CaneBrain 95]

You're missing the root cause."The special privilages granted to Fannie Mae and Freddie Mac have distorted the housing market by allowing them to attact capital they could not attact under pure market conditions. Like all artifically created bubbles the boom in housing prices cannot last forever. When house prices fall, homeowners will experience difficulty as their equity is wiped out. Furthermore, the holders of mortgage debt, will also have a loss. These losses will be greater had government policy not actively encouraged over-investment in housing"-Ron Paul 2003

This is the kind of BS that people have been spouting to try and deflect attention from the complete and total failure of the private banking sector leading up to 2008. The privileges granted to Fannie and Freddie were but a tiny part of a massive meltdown. Nothing involving Fannie or Freddie made private banks bundle together shitty loans then strong-arm the ratings agencies into giving them AAA ratings so they could insure those shitty loan bundles and deceive investors then wait until it was too late to admit there was a huge problem.What the government did with Fannie and Freddie was stupid. You can't just decide to have a home ownership society. What the private banking sector did was far worse.

[FCP Bob 1,312]

Why do you think that the businesses that bought this bad debt were willing to do so? They were financial fools? They believed that the government would ultimately back those loans? Something else?If regulation means keeping those banks from getting "to big to fail", I agree. If regulation means a government bureaucracy in charge of assessing investment risk, I'm skeptical.

That debt was bought because of a combination of miscalculation, incompetence and fraud.People thought that housing prices could only go up and they miscalculated. The banks that bundled the debt deceived people on the quality of the debt and at best the ratings agencies that rated that crap as AAA were incompetent. The amazing thing to me is how the ratings agencies haven't been sued into oblivion for their negligence.Most people think that Canada has the most stable and best regulated banking system in the World currently. Canadian banks are relatively large Internationally and very large in Canada and very profitable.Canadian banks haven't been allowed to merge in all cases when they want to so that they don't become even a larger share of the Canadian market.Canadian banks keep the mortgages that they write on their own books so the risk is with who is writing the loans. Also they weren't allowed to write no money down mortgages etc.Also in general Canadian banks have had high reserve ratio requirements so that they can't leverage as much. The more that a bank is allowed to leverage things the greater the chance of them getting involved in very risky operations and if those operations go wrong the risk of the bank being taken down is lessened.

[Balloon guy 158]

Yea we already knew that Canada is made up of wimps.

[akoff 0]

That debt was bought because of a combination of miscalculation, incompetence and fraud.People thought that housing prices could only go up and they miscalculated. The banks that bundled the debt deceived people on the quality of the debt and at best the ratings agencies that rated that crap as AAA were incompetent. The amazing thing to me is how the ratings agencies haven't been sued into oblivion for their negligence.Most people think that Canada has the most stable and best regulated banking system in the World currently. Canadian banks are relatively large Internationally and very large in Canada and very profitable.Canadian banks haven't been allowed to merge in all cases when they want to so that they don't become even a larger share of the Canadian market.Canadian banks keep the mortgages that they write on their own books so the risk is with who is writing the loans. Also they weren't allowed to write no money down mortgages etc.Also in general Canadian banks have had high reserve ratio requirements so that they can't leverage as much. The more that a bank is allowed to leverage things the greater the chance of them getting involved in very risky operations and if those operations go wrong the risk of the bank being taken down is lessened.

you hit the nail on the head, without frannie and freddy backing everything none of this would have happened. the loans wouldn't have existed because the banks would have never made the loans...because the government never should have gotten involved in the first place...glad we can all agree it was our governments fault!! most of the blame falls on Democrats as typical because it was their program but Republicans should have fought over it way harder then they did.

[CaneBrain 95]

you hit the nail on the head, without frannie and freddy backing everything none of this would have happened. the loans wouldn't have existed because the banks would have never made the loans...because the government never should have gotten involved in the first place...glad we can all agree it was our governments fault!! most of the blame falls on Democrats as typical because it was their program but Republicans should have fought over it way harder then they did.

This is the kind of BS that people have been spouting to try and deflect attention from the complete and total failure of the private banking sector leading up to 2008. The privileges granted to Fannie and Freddie were but a tiny part of a massive meltdown. Nothing involving Fannie or Freddie made private banks bundle together shitty loans then strong-arm the ratings agencies into giving them AAA ratings so they could insure those shitty loan bundles and deceive investors then wait until it was too late to admit there was a huge problem.What the government did with Fannie and Freddie was stupid. You can't just decide to have a home ownership society. What the private banking sector did was far worse.

'fannie and freddy backing everything', lol. #notintendedtobeafactualstatementihope

[Balloon guy 158]

'fannie and freddy backing everything', lol. #notintendedtobeafactualstatementihope

It still had the effect of being the snowball at the top of the hill.Freddie may not have allowed Moody to rate a collection of bad loans as AAA so they could be sold to Iceland, but those loans would likely not have been there had the ball not gotten rolling by government involvement ie Barney Frank,

( starting at :43)

[mk 11]

you hit the nail on the head, without frannie and freddy backing everything none of this would have happened. the loans wouldn't have existed because the banks would have never made the loans...because the government never should have gotten involved in the first place...glad we can all agree it was our governments fault!! most of the blame falls on Democrats as typical because it was their program but Republicans should have fought over it way harder then they did.

you might actually be brain dead, sorry

[CaneBrain 95]

It still had the effect of being the snowball at the top of the hill.Freddie may not have allowed Moody to rate a collection of bad loans as AAA so they could be sold to Iceland, but those loans would likely not have been there had the ball not gotten rolling by government involvement ie Barney Frank,

( starting at :43)

many were sold to large American investors (like pension funds).I find the idea that if one banking entity makes bad loans, every other bank has no choice but to make bad loans too......to be completely laughable on its face.

[Balloon guy 158]

many were sold to large American investors (like pension funds).I find the idea that if one banking entity makes bad loans, every other bank has no choice but to make bad loans too......to be completely laughable on its face.

It wasn't one bank though, it was a public policy that banks would be threatened for not having loans to poor people in poor neighborhoods at certain percentages.But I agree that its possible that this action alone could have resulted in nothing but a few bad loans, until idiots in the financial institutions decided to turn a splinter into cancer.

[CaneBrain 95]

It wasn't one bank though, it was a public policy that banks would be threatened for not having loans to poor people in poor neighborhoods at certain percentages.But I agree that its possible that this action alone could have resulted in nothing but a few bad loans, until idiots in the financial institutions decided to turn a splinter into cancer.

I think threatened is REALLY strong.Obviously, I agree with the 2nd sentence.

[FCP Bob 1,312]

http://www.businessinsider.com/ron-paul-letters-2012-1Letters from Ron Paul supports to Business Insider about their latest article on Ron Paul

[Balloon guy 158]

http://www.businessinsider.com/ron-paul-letters-2012-1Letters from Ron Paul supports to Business Insider about their latest article on Ron Paul

Didn't click link, don't like to read racist comments...

[hblask 1]

Except he completely failed to see the cause of the financial crisis. Saying, "there will be a crisis" isn't the same as saying that there will be a crisis and telling how it will come about in a way that can be prevented.Or am I missing the when he pushed to make credit default swaps illegal or voted for regulation limiting the leverage of banks, etc etc

The videos of him doing exactly that has been posted to various threads here many times. This last one didn't deal with the financial crisis, it was more about foreign policy, but he called the housing collapse very specifically for all the right reasons.

[hblask 1]

clearly you and I disagree on how much impact the politicians can have on the economy in the short term. I feel like there should be something other than noise in market returns vs. ruling political party throughout US history if you were correct about this. I'm not accusing you of not doing your homework or anything, but you might wanna have that bias looked at.

You seem to be assuming that political parties have a consistent ideology. If there is any consistency, it's that both want more power. There is a thing to check: level of *change* in intervention in the economy vs economic performance over the next, say, 48 months. What were the biggest expansions of govt control over the economy?Hoover/FDR yearsJohnson/Nixon yearsBush/Obama yearsHow was the economy after that?My theory (and it is only a theory) is that the actual level of intervention matters less than the direction and degree of change. Free markets can adapt over time to about anything, but sudden changes or periods of uncertainty screw up the economy for years until the markets absorb and adapt those changes.My goal is to someday run the data on this using the Index of Economic Freedom vs GDP Growth and a handful of other factors. Unfortunately, this would take more time than I have right now.

[hblask 1]

That debt was bought because of a combination of miscalculation, incompetence and fraud.

Primarily it was purchased because is was implicitly backed by the government. The reason they were allowed to keep doing it was incompetence and fraud. But the first domino is the important one, and that was Fannie and Freddie kicking off the feeding frenzy of sub-prime mortgages. Any one domino taken out in time could've stopped the reaction, but the root cause was the moral hazard of socialized risk, privatized gain.

[hblask 1]

People thought that housing prices could only go up and they miscalculated.

I'm going to claim guilty on this and explain why this is a partial mis-statement, but an important one because it goes to the root of the problem.During that time, I refinanced several properties up to 100% of value, very near the peak. To me, it wasn't that important to me if the property was going up or down, mainly because I figured the worst case downside would be 10-20%. So why did I do this? Because the money was so cheap. It was nearly free. If the stock market or any other investment were to perform at even half of what it historically had, I STILL could invest and easily come out ahead, even if the property values dropped. These are the loans that got re-sold and tanked the economy when they started failing.So what is the root of the problem:1. Cheap money -- it would've been a bad decision for me to pass up money that was that cheap. Why was it so cheap? A loose monetary policy by the fed.2. Ridiculous sub-prime loans given out to anyone who asked. Why did this happen? Fannie and Freddie and the implicit backing of the government. I actually had one property where I could not get a loan -- 3 commercial banks turned me down. But I ended up finding a place that could get me one through Freddie. That is a loan that would not have existed without government mismanagement, because first, the money would not have been so cheap, and second, the sensible banks wanted nothing to do with it.You guys act like it was some big conspiracy, but it wasn't. It was people like me making rational decisions based on an environment created by bad policy.

[FCP Bob 1,312]

Another issue to add to your list Henry is the fact that mortgage interest is tax deductible. Canada and the US have about the same levels of home ownership. The average home price in Canada is higher than the US but that's partly due to the average home in Canada being the largest in the World. Right now Canadian home prices might be in a mini bubble situation but Canadians have far more equity in their homes so can sustain price corrections without getting under water. The reason for that is mainly that we can't deduct our mortgage interest from out taxes so we don't refinance like crazy like Americans do.