There was an article in the today’s Advertiser [Sept 23 ’08 p. 9] reporting on a “thought provoking” speaker at the Rotary Club last week, titled “Time for a wake up call, humans” . The speaker, W tells us, was Mike Nickerson [Green candidate 2006 Lanark Co Ont. and founding member of the Green Party 1983, There was no mention of this background in the Advertiser but we know how to google.]
We are told Nickerson has written 4 books. We are told he
urges people to think about changing the customs and institutions that aim to benefit from material expansion to ones capable of maintaining long-term well being while decreasing impacts on the planet and each other.
The report goes on with very familiar “we are overwhelming our planet” kind of talk which you may or may not agree with for a variety of reasons . We are used to this kind of talk in the press these days and just usually read on. BUT we had to pause when we read this! It certainly provoked our thought.
A wake-up call is necessary and Nickerson suggested that the sub-prime mortgage meltdown and resulting financial institutional collapse in the U.S. might just be that call. He pointed out that trouble started after 9/11 when a frightened nation hunkered down at home.
This from someone who spoke out against the Free Trade Agreement in 1988.
Plus he is wrong; The roots of the meltdown go back a lot further than that.
So President Bush told people to go out and shop. Interest rates plummeted and mortgages flowed, he said. The system balanced until oil prices spiked and interest rates rose.
Now we know it is popular to blame Bush for everything but does truth have any value? if you had a brain tumour would you ask the advice of your dentist, however good at dentistry? Is this an economist? Is this a person who is knowledgeable about investment instruments or mortgage policy in either in Canada or the US? Is this a person who knows the history of the roots of this meltdown which has been years in the making? Is it too much to ask of someone who wishes to overhaul our institutions that he understands how those institutions actually function whether for good or for ill? May we be allowed to point out a few facts?
Bush and Republicans tried years ago to reign in Freddie Mac and Fannie Mae – the mortgage monsters who were culprits in this slide, among others.[note the date -2003]
Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.
”The regulator has not only been outmanned, it has been outlobbied,” said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ”Being underfunded does not explain how a glowing report of Freddie’s operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.”
Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
Republicans failed in this attempt. They tried again – McCain said in 2005:
If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole.”
Do a little research and read about the CRA Act how it was supported and extended by Clinton. Note the 2000 date on this article.
Despite warnings from GOP members of Congress in 1992, Clinton pushed extensive changes to the rules requiring lenders to make questionable loans.
Read that again – REQUIRING LENDERS TO MAKE QUESTIONABLE LOANS.
Lenders who refused would find themselves castigated publicly as racists. As noted this week in an IBD editorial, no fewer than four federal bank regulators scrutinized financial firms’ books to make sure they were in compliance.
Failure to comply meant your bank might not be allowed to expand lending, add new branches or merge with other companies. Banks were given a so-called “CRA rating” that graded how diverse their lending portfolio was.
Fannie Mae and Freddie Mac grew, and grew and grew.
As they grew, Fannie and Freddie grew heavily involved in “community development,” giving money to local housing rights groups and “empowering” the groups, such as ACORN, for whom Barack Obama once worked in Chicago. [link]
Google ACORN and see what you learn there.
Since 1989, Fannie and Freddie have spent an estimated $140 million on lobbying Washington. They contributed millions to politicians, mostly Democrats, including Senator Chris Dodd (No. 1 recipient) and Barack Obama (No. 3 recipient, despite only three years in office).
The Clinton White House used Fannie and Freddie as a patronage job bank. Former executives and board members read like a who’s who of the Clinton-era Democratic Party, including Franklin Raines, Jamie Gorelick, Jim Johnson and current Rep. Rahm Emanuel.
We could go on and on but can we just ask our “journalists” not to embarrass us like this. We have to presume that W is just regurgitating what Nickerson said rather than her own opinions in this piece [although we would actually wish for more informed Opinion in this Opinion piece on the Opinion page of the Advertiser]
As for Nickerson ? His latest book is Life, Money and Illusion etc .. There is a lot of illusion in the money markets and you can lose your shirt if you don’t know your stuff. Nickerson is a wood worker [we would actually say a cabinet maker and it appears a good one] “Shoemaker stick to your last.”
[-would that be as sexist as stick to your knitting?]