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| 2009/1/9-14 [Reference/Tax, Politics/Domestic/President/Bush] UID:52352 Activity:kinda low |
1/9 Karl Rove's Factually Challenged Housing Revisionism
http://www.ritholtz.com/blog/2009/01/karl-roves-revisionism
\- why exactly would anybody except anything from KROVE
except an ideological ad? this is like "ford ad's
american car quality historical revisionism" or Preacher Bob
Jesusfreak's critiques of evolutionary theory.
[not that i am not saying people shouldnt engage with KROVE
or it's not interesting to read these links]. the dems
can definitely learn from people like grover nordquist
[interitance tax = "death tax" instead of "billionare tax"]
"billionaire tax" is far less _/
accurate than "death tax"
inheritance taxes affect people
with relatively small inheritances
\_ Technically, they're both misleading;
it's actually an "inheritance tax."
\_ Actually, as is usual for the MOTD
you don't know what the hell you
are talking about, but wouldn't
think of letting that stop you.
It is an ESTATE tax, which is
"technically" different from an
an inheritance tax. If it was an
inheritance tax besides being more
fair and reasonable, it would also
make the term "Death Tax" actually
incorrect, as opposed to now, where
it is (again "Technically") correct.
-phuqm (the death tax supporter)
-phuqm (death tax supporter)
\_ And as usual, you manage to be
informative AND an asshole.
\_ aww shucks. Now I'm going
to feel all warm and fuzzy
all day.
\_ Mission accomplished.
stuff like this "contains an egregious combination of false
statements, crucial omissions and misleading assertions."
should read "karl rove is a notorious liar" ... he isnt a fool
so he cant believe any of this ... as for journalists and
publication which present him ... we must ask about them
"are they fools, unprincipled ideologues, paid hacks, or is
something else going on". it feels good to come up with nice lines
like "you are entitled to your opinions but not your own facts"
but in cases like this a stark "kar rove is a liar" is more accurate
and makes the point better. To wit, "false coyness" in lines like
"Rove somehow fails to note the GOP controlled Congress from
1994-2006, including the first 6 years of the Bush Presidency."
if you havent analyzed the GSE article in the last Vanity Fair,
you may wish to take a look.
\- this is more like it:
http://delong.typepad.com/sdj/2009/01/stupidest-party-alivetm.html |
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| www.ritholtz.com/blog/2009/01/karl-roves-revisionism -> www.ritholtz.com/blog/2009/01/karl-roves-revisionism/ Get The Big Picture by Email Subscribe * Quote of the Day Seven habits that help produce the anything-but-efficient markets that rule the world 1 Think short term. Print this post By Barry Ritholtz - January 8th, 2009, 7:13AM As the saying goes, you are entitled to your own opinion, but not your own facts. The instant historical revisionism by Karl Rove in today's WSJ -- mythmaking writ large -- contains an egregious combination of false statements, crucial omissions and misleading assertions. A few thoughts are required to correct Rove's attempt to create a false and deceptive narrative. Consider these few corrections: 1 "Fannie Mae and Freddie Mac were among the principal culprits of the housing crisis" Wrong. Fannie and Freddie were cogs in the giant mortgage machine, but they had nothing to do with the abdication of lending standards from 2002-07. That was a function of the Lend-to-Securitize business model of the sub-prime mortgage originators. THAT was the primary cause of the housing boom and bust, along with Ultra-low rates and a lack of Fed regulation of these sub-prime lenders. This had been pointed out by many people, before Bush and afterwards, that Fannie was a problem. Chief amongst the Fannie critics was Fed Governor William Poole. He deserves credit for his many early warnings about Fannie Mae and the GSEs. Also ignored was Fed Governor Edward Gramlich, whose early warnings about subprime and predatory lending and were both timely and prescient. If the President wanted to rein in the GSEs, he needed only make it a major priority, and not a footnote in the 2001 budget. This has been widely reported in the media for sometime now. This bulk-up in risky paper made it possible for banks to lend imprudently on a massive scale. The GSEs were very late to the party, buying sub-prime at the top of the market. The peak of homes sales (units) were August 2005, and the peak in prices were in 2006, just a few months later. By the time the GSE's were buying sub-prime debt, it was all over but the crying. Bank regulators had proposed new guidelines for writing risky loans. had they been enacted, the worst of the housing and credit crisis might have been avoided. The Bush administration backed away from proposed crackdowns on the subprime, no-money down, interest-only mortgages that were critical contributors to the credit and housing crisis. Associated Press, pressure from banks (many of whom have since failed) was the reason: "Bowing to aggressive lobbying -- along with assurances from banks that the troubled mortgages were OK -- regulators delayed action for nearly one year. By the time new rules were released late in 2006, the toughest of the proposed provisions were gone and the meltdown was under way. These mortgages have been considered more safe and sound for portfolio lenders than many fixed-rate mortgages,' David Schneider, home loan president of Washington Mutual, told federal regulators in early 2006. Two years later, WaMu became the largest bank failure in US history." What was so damning was these proposals were all stripped from the final administrative rules by the Bush White House. Note -- these rules were proposed in 2005 -- the same year as FNM/FRE began buying subprime mortgages. If that was, as Rove asserts, the cause, than why wasn't this a primary cause as well? I am passionate about getting the factual cause of the current housing and credit crisis correct. If we don't understand how this all came about, we cannot possibly cure it. In attempting to save the President's legacy and clear his own name, Mr Rove does the nation a terrible disservice. I usually don't bother fisking WSJ Op-Ed pages, as their respect for such things as objective fact or "Truth" can be lacking But this one was so egregious, it demanded an answer. January 8th, 2009 at 8:35 am Barry appreciate the diligence here. Do you have any comments or controlled ability to check on whether or not troubled banks or their brokerage arms had commissioned opening of subsidiary corporations that were involved with originating loans during 2001-2006. January 8th, 2009 at 8:35 am No doubt he's a liar, but even if regulation were perfect on housing, the mess would have only been smaller. Moreover, with all that liquidity flooding through the system thanks to Sir Greenspan's massive liquidity injections, the system would have created some other Frankenstein segment of the economy, equally phony and dependent on ever easier money and credit, and thus doomed to collapse. Ripping real stores of wealth from the productive economy through inflation (of money and credit) and taxation is more akin to eating one's seedcorn vs. Just when we need all this phony economic activity to be cleansed, teh authorities are doing their utmost -- extraordinary means -- to keep the functionally dead patient on life support, all at expense of real producers whose dollars are actually backed by production and service vs. credit and money invented out of thin air BR: If regulations & enforcement were appropriate, trillions in loans to unqualified borrowers would not have been made . I heard a few minutes of Obama's CNBC interview last night. To me, it seems painfully obvious that Obama does not have the solution to the housing problem. This will only accerbate the problem (housing values are TOO high). will provide $10,000 & will assist in finding suitable, alternative housing? Further, for new mortgages, REO/short-sales should NOT be used as sales comps. The US govt will provide lenders with default insurance. January 8th, 2009 at 8:44 am losfunkytown, First of all, if you look at how government is financing the stimilus, it is not through higher taxation but mostly through debt. But the debt will be eagerly bought up by private citizens under no coercion from the government. Second of all, Mr Austrian I am still waiting for my hyper-inflation. How do you explain deflation right now despite all these bailouts, Mr Austrian? And how will you explain in 10 years, why our inflation rate will average about 1% annually. Third, this "phony economic activity" is being cleansed, the problem is its dragging the productive parts of the economy down with it. January 8th, 2009 at 9:30 am The fact that Rove wrote this is proof that they know where the majority of the problem lies. Spread enough bs and everyone forgets the truth and begins to believe the lie. January 8th, 2009 at 9:31 am Don't forget former Rep Mike Oxley (R - OH) on how much Bush helped with the 2005 fannie freddie reform bill: "All the handwringing and bedwetting is going on without remembering how the House stepped up on this," he says. January 8th, 2009 at 9:55 am Second of all, Mr Austrian I am still waiting for my hyper-inflation. How do you explain deflation right now despite all these bailouts, Mr Austrian? And how will you explain in 10 years, why our inflation rate will average about 1% annually. Also, as should be obvious, people feel better about buying US debt than they do about buying stocks right now. Considering how much in the red our government is in, that ought to tell people something about the stock market as well. January 8th, 2009 at 10:10 am What a terrible line of thinking. The housing mess was created by a number of factors, all of which were driven by intervention into the market. First, the CRA forced banks to reconsider who they would make loans to; it forced them to extend loans to people with bad credit histories. To offset some of the risks the banks sold loans to Freddie and Fannie, which were pressured by the government to help in its goal of increased home ownership rates, and by selling securities backed by risky loans. Because the accounting standards, which are overseen by the government, permitted all kinds of unreasonable assumptions and because government approved rating agencies said the loans were of higher quality than they actually were the market for these securities exploded. Well, we had the Fed inflating the money supply and supporting a carry trade that was pushing down yields to levels that were below the true level of inflation. As demand for these securities increased there wa... |
| delong.typepad.com/sdj/2009/01/stupidest-party-alivetm.html Paul Krugman Fears Deflation, and Wants a Bigger Stimulus January 10, 2009 Stupidest Party Alive^TM People who have endorsed the Republican House caucus's objections to the stimulus package: Donald Luskin, Chief Investment Officer, Trend Macrolytics LLC, Stupidest Man Alive Emeritus^TM: "Government spending does not create incentives for labor, innovation and investment. Instead of spending $1 trillion in Washington, let Washington forgive $1 trillion in tax revenues to create incentives for millions of individuals and firms to get the economy going again, one dollar at a time." That should tell you something about today's Republican Party. Other ethics-free Republican hacks, whose organizations share in their burning of their own credibility: Michael Cannon, Cato Institute: "The only way Congress can spend money is to extract it from the private sector - either by taxing it, borrowing it, or seignorage. The question then becomes: will Congress spend that money more wisely than the private sector would have spent it? Congress typically spends according to its political priorities, not economic priorities." Antony Davies, Associate Professor of Economics, Duquesne University: "It is time for voters to wake up to the fact that government cannot create jobs. It can only shift jobs from one part of the economy to the other. It is entrepreneurs who create jobs, and it is consumers who judge whether those jobs are the best jobs to be created. The government contributes best by establishing a rule of law and protection of property rights that allows entrepreneurs and consumers to act in their best interests." Joseph Zoric , Associate Professor of Economics, Franciscan University of Steubenville: "The stimulus plan will most probably turn quickly into pork spending. Marginal rate tax cuts would be a much more effective way to stimulate demand along with cuts in the capital gains and corporate tax rates. Evidence shows that marginal tax cut multipliers are much higher than spending multipliers. Edward Lopez, Associate Professor of Law and Economics, San Jose State University: "Fiscal stimulus may have symbolic value and certainly does provide an expedient for distributive politics, but there is NO evidence that it contributes to GDP or economic growth more broadly." Justin Ross, Assistant Professor of Economics, School of Public and Environmental Affairs, Indiana University: "Empirical evidence overwhelmingly rejects federal government deficit spending as the best method for stimulating the economy, and is generally unsupportive of it having any stimulus effect at all." Steven Horwitz, Charles A Dana Professor of Economics, St. Lawrence University: "The stimulus plans assume consumption is the source of economic growth. The stimulus' is a redistribution of spending, at best, and will do little to help. The next Administration should avoid large scale programs and experimentation and allow the marketplace to correct the errors made by the last 8 years of misguided intervention." Richard Wagner, Professor of Economics, George Mason University: "Any so-called stimulus program is a ruse. The government can increase its spending only by reducing private spending equivalently. Whether government finances its added spending by increasing taxes, by borrowing, or by inflating the currency, the added spending will be offset by reduced private spending. Furthermore, private spending is generally more efficient than the government spending that would replace it because people act more carefully when they spend their own money than when they spend other people's money." Stephen Entin, President & Executive Director, Institute for Research on the Economics of Taxation: "Want to grow the economy without inflation? Cut marginal tax rates, slash the corporate rate, expense investment in the first year (instead of depreciation), keep tax rates low on dividends and capital gains, and repeal the death tax. Have the Federal Reserve focus on price stability and a sound dollar, and on not generating a monetary roller coaster. Gary Wolfram, William Simon Professor of Economics, Hillsdale College: "Rather than old style Keynesianism we should reduce the corporate income tax substantially. The problem is not lack of demand, but rather a lack of investment. By reducing the corporate income tax, among the highest in the industrialized world, we will increase the incentive for companies to invest in new equipment, technology, research and development, and buildings. This will increase productivity in the long run, leading to higher GDP and higher wages." Lawrence Franko, Retired Professor, University of Massachusetts Boston, College of Management: "Government infrastructure spending stimulus' programs in Japan during the 1990s produced no stimulus, but rather a vast overhang of government debt. Bridges, tunnels, roads, and trains to nowhere stimulate nothing. It is productivity growth that counts, and that comes mainly from the private sector - which is why tax cuts have always been a surer way to economic recovery. Michael Sykuta, Associate Professor, University of Missouri - Columbia: "Government intervention and stimulus' in the housing market is largely responsible for the current economic crisis. History has shown that the Obama team's proposed stimulus' is not only going to have little to no effect in the short run, but will create a larger bureaucratic structure, lead to tremendous investments in unproductive political lobbying among stimulus project' wannabes, and dissuade/delay private investment, recovery and growth." benefit from taking money from current or future taxpayers to support a government spending spree. No doubt, certain interest groups will gain from feeding at the public sector trough. But losers surely will outnumber winners by a large margin. Our economy as a whole will benefit from Congress lowering taxes and letting Americans decide for themselves what is worth spending their hard-earned dollars on." of Economics, Towson University: "A government-spending stimulus' is a very bad idea. Because government can spend only what it has taxed or borrowed away from the public, it creates no new demand but merely redirects it. Recovery depends on profit and loss discipline and public confidence that the basic rules underlying free markets will be followed. If we are worried about too few jobs, it makes sense to subsidize private employment (for example, by temporarily lowering payroll taxes or creating a new tax subsidy for new hires)." Henry Thompson, Professor, Auburn University: "The current recession was caused by government fiddling with the mortgage market and the moral hazard created by the illusion of government monitoring of financial markets. Increased government involvement in the economy is not the solution." They will divert resources from the private sector to the government sector moving us further away from a free-enterprise economy. Stacie Beck, Professor, University of Delaware: "A spending stimulus will only delay the needed restructuring of the US economy to remain internationally competitive. Tax cuts will facilitate that restructuring far better than spending and job creation by the government." those comments rank high on the just-plain-false list, as well as the denial-of-empirically-observed-reality list. Can it be possible that those people really, truly believe them? Upton Sinclair's aphorism about belief and income doesn't seem to apply... January 10, 2009 at 01:02 PM I cannot believe Wolfram et al are still parrotting that line about the corporate income tax being the highest in the developed world. Looking at the effective rate or looking at corporate taxes as a share of GDP the US is right about on par with the developed world. January 10, 2009 at 01:05 PM Government infrastructure spending stimulus' programs in These two points are fairly reasonable though: Japan during the 1990s produced no stimulus, but rather a vast overhang of government debt. Bridges, tunnels, roads, and trains to nowhere stimulate nothing. It is productivity growth that counts, If we are worried about too few jobs, it makes sense to subsidize priva... |