"PERISCOPE - ПЕРИСКОП" via Mike Nova
Best of the Web Today: The Left's Nervous Breakdown
via WSJ.com: Opinion on 10/11/11
Obama has failed, and his supporters are turning to nihilism.
Peter Wallison: Wall Street's Gullible Occupiers
via WSJ.com: Opinion on 10/12/11
The protesters have been sold a bill of goods. Reckless government policies, not private greed, brought about the housing bubble and resulting financial crisis.
Rove: Democrats Court the Wall Street Protestors
via WSJ.com: Opinion on 10/13/11
The strategy risks alienating independents and blue-collar voters.
Thomas Fleming: Wall Street Protesters Channel Thomas Jefferson
via WSJ.com: Opinion on 10/13/11
The sage of Monticello thought highly of forgiving all debts. James Madison set him straight.
via WSJ.com: Opinion on 10/14/11
The protestors have a point, if not the right target.
Peter Wallison: Wall Street's Gullible Occupiers - WSJ.com
via online.wsj.com on 10/15/11
- OPINION
- OCTOBER 13, 2011, 7:31 P.M. ET
Wall Street's Gullible Occupiers
The protesters have been sold a bill of goods. Reckless government policies, not private greed, brought about the housing bubble and resulting financial crisis.
more in Opinion | Find New $LINKTEXTFIND$ »
By PETER J. WALLISON
There is no mystery where the Occupy Wall Street movement came from: It is an offspring of the same false narrative about the causes of the financial crisis that exculpated the government and brought us the Dodd-Frank Act. According to this story, the financial crisis and ensuing deep recession was caused by a reckless private sector driven by greed and insufficiently regulated. It is no wonder that people who hear this tale repeated endlessly in the media turn on Wall Street to express their frustration with the current conditions in the economy.
Their anger should be directed at those who developed and supported the federal government's housing policies that were responsible for the financial crisis.
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The Occupy Wall Street protesters in New York appear unfocused and disorganized. WSJ's Hilke Schellmann takes a peek into the inner workings of the organization and how it is trying to manage communal living in a public space.
Beginning in 1992, the government required Fannie Mae and Freddie Mac to direct a substantial portion of their mortgage financing to borrowers who were at or below the median income in their communities. The original legislative quota was 30%. But the Department of Housing and Urban Development was given authority to adjust it, and through the Bill Clinton and George W. Bush administrations HUD raised the quota to 50% by 2000 and 55% by 2007.
It is certainly possible to find prime borrowers among people with incomes below the median. But when more than half of the mortgages Fannie and Freddie were required to buy were required to have that characteristic, these two government-sponsored enterprises had to significantly reduce their underwriting standards.
Fannie and Freddie were not the only government-backed or government-controlled organizations that were enlisted in this process. The Federal Housing Administration was competing with Fannie and Freddie for the same mortgages. And thanks to rules adopted in 1995 under the Community Reinvestment Act, regulated banks as well as savings and loan associations had to make a certain number of loans to borrowers who were at or below 80% of the median income in the areas they served.
Research by Edward Pinto, a former chief credit officer of Fannie Mae (now a colleague of mine at the American Enterprise Institute) has shown that 27 million loans—half of all mortgages in the U.S.—were subprime or otherwise weak by 2008. That is, the loans were made to borrowers with blemished credit, or were loans with no or low down payments, no documentation, or required only interest payments.
Of these, over 70% were held or guaranteed by Fannie and Freddie or some other government agency or government-regulated institution. Thus it is clear where the demand for these deficient mortgages came from.
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Peter Wallison on how reckless government policies caused the financial crisis.
The huge government investment in subprime mortgages achieved its purpose. Home ownership in the U.S. increased to 69% from 65% (where it had been for 30 years). But it also led to the biggest housing bubble in American history. This bubble, which lasted from 1997 to 2007, also created a huge private market for mortgage-backed securities (MBS) based on pools of subprime loans.
As housing bubbles grow, rising prices suppress delinquencies and defaults. People who could not meet their mortgage obligations could refinance or sell, because their houses were now worth more.
Accordingly, by the mid-2000s, investors had begun to notice that securities based on subprime mortgages were producing the high yields, but not showing the large number of defaults, that are usually associated with subprime loans. This triggered strong investor demand for these securities, causing the growth of the first significant private market for MBS based on subprime and other risky mortgages.
Associated Press
Millionaire rap mogul Russell Simmons (center) joins the anti-Wall Street protests.
By 2008, Mr. Pinto has shown, this market consisted of about 7.8 million subprime loans, somewhat less than one-third of the 27 million that were then outstanding. The private financial sector must certainly share some blame for the financial crisis, but it cannot fairly be accused of causing that crisis when only a small minority of subprime and other risky mortgages outstanding in 2008 were the result of that private activity.
When the bubble deflated in 2007, an unprecedented number of weak mortgages went into default, driving down housing prices throughout the U.S. and throwing Fannie and Freddie into insolvency. Seeing these sudden losses, investors fled from the market for privately issued MBS, and mark-to-market accounting required banks and others to write down the value of their mortgage-backed assets to the distress levels in a market that now had few buyers. This raised questions about the solvency and liquidity of the largest financial institutions and began a period of great investor anxiety.
The government's rescue of Bear Stearns in March 2008 temporarily calmed the market. But it created significant moral hazard: Market participants were led to believe that the government would rescue all large financial institutions. When Lehman Brothers was allowed to fail in September, investors panicked. They withdrew their funds from the institutions that held large amounts of privately issued MBS, causing banks and others—such as investment banks, finance companies and insurers—to hoard cash against the risk of further withdrawals. Their refusal to lend to one another in these conditions froze credit markets, bringing on what we now call the financial crisis.
The narrative that came out of these events—largely propagated by government officials and accepted by a credulous media—was that the private sector's greed and risk-taking caused the financial crisis and the government's policies were not responsible. This narrative stimulated the punitive Dodd-Frank Act—fittingly named after Congress's two key supporters of the government's destructive housing policies. It also gave us the occupiers of Wall Street.
Mr. Wallison is a senior fellow at the American Enterprise Institute. He was a member Financial Crisis Inquiry Commission and dissented from the majority's report.
Rove: Democrats Court the Wall Street Protestors - WSJ.com
via online.wsj.com on 10/15/11
- OPINION
- OCTOBER 13, 2011, 12:17 P.M. ET
Democrats Court the Wall Street Protesters
The strategy risks alienating independents and blue-collar voters.
more in Opinion | Find New $LINKTEXTFIND$ »
By KARL ROVE
At his recent news conference, President Barack Obama praised Occupy Wall Street, saying, "It expresses the frustrations that the American people feel." Former House Speaker Nancy Pelosi praised the protesters, saying, "God bless them for their spontaneity." Vice President Joe Biden claimed the protesters had "a lot in common with the tea party." And the Democratic Congressional Campaign Committee is circulating a petition seeking 100,000 signers to declare, "I stand with the Occupy Wall Street protests."
The political calculation behind all this is obvious: Democrats hope Occupy Wall Street will boost their party's chances in next year's election as the tea party did for the GOP in 2010. But Democratic leaders are wrong in believing that Occupy Wall Street is the liberal alternative to the tea party.
AFP/Getty Images
The tea party is a middle-class movement of people who want limited government, less spending, less debt, low taxes, and the repeal of ObamaCare. Occupy Wall Street isn't a movement. It's a series of events populated by a weird cast of disaffected characters, ranging from anarchists and anti-Semites to socialists and LaRouchies. What they have in common is an amorphous anger aimed at banks, investors, rich people and bourgeois values.
The Occupy Wall Street protesters in New York appear unfocused and disorganized. WSJ's Hilke Schellmann takes a peek into the inner workings of the organization and how it is trying to manage communal living in a public space.
The tea party reveres the Constitution and wants to change laws to restore the country to prosperity. Occupy Wall Street started by occupying a New York City park and then blocked the Brooklyn Bridge, sparking the arrest of hundreds.
The tea party files for permits for its rallies and picks up its trash afterwards. Occupy Wall Street tolerates protesters who defecate on police cars, allows the open sale of drugs at protests, and features women walking around rallies topless.
The tea party has settled down to democracy's patient, responsible work, either by exerting influence on the Republican Party nomination process or educating Americans on the issues in order to hold politicians in both parties to account.
By comparison, Occupy Wall Street seems alienated by the American political system. It has no concrete agenda and no plan to become a political institution. Yet it needs both things to have an impact on politics or policy. Without them, Americans will be interested in Occupy Wall Street's weird and off-putting side show for only so long.
The fact that it lacks a clear program means that Occupy Wall Street is susceptible to being captured by even more extreme elements. It's no accident its rallies and marches around the country include signs extolling wacky causes and marginal, but highly organized, left-wing groups. Nothing draws ideologues who know what they want as fast as a malleable crowd that doesn't.
What Democrats eager to latch on to the Occupy Wall Street protests don't seem to fully grasp is that these events are in part an expression of deep dissatisfaction with Mr. Obama and other D.C. Democrats. Some young Occupy Wall Street participants are angry because their economic future seems so bleak. They want someone to hold responsible for the absence of jobs. Others see Mr. Obama as insufficiently liberal. And some are simply nutty: A third of the protesters polled by New York magazine say the United States is as bad as al Qaeda.
While Mr. Obama and other top Democrats may be momentarily excited by the notion of a long-term relationship, Occupy Wall Street may not want to even go out for a date. The refusal of protestors in Atlanta to allow Congressman and civil rights icon John Lewis to address their rally is just one sign this may not be a terribly Democratic-friendly crowd.
Rushing to identify with Occupy Wall Street could well threaten Mr. Obama's re-election by putting off the very swing voters whom the president needs. It could further diminish the president's support from center-left business leaders, already sick of Mr. Obama's class warfare and faux populism. Appearing to condone the crude personal behavior of Occupy Wall Street protestors can also further erode Mr. Obama's standing with culturally conservative blue-collar voters.
Before they go much further with this courtship, the president and other Democrats need to remember it's always dangerous to associate with people who are just plain kooky.
Mr. Rove, the former senior adviser and deputy chief of staff to President George W. Bush, is the author of "Courage and Consequence" (Threshold Editions, 2010).
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Thomas Fleming: Wall Street Protesters Channel Thomas Jefferson - WSJ.com
via online.wsj.com on 10/15/11
- OPINION
- OCTOBER 13, 2011, 7:25 P.M. ET
Wall Street Protesters Channel Thomas Jefferson
The sage of Monticello thought highly of forgiving all debts. James Madison set him straight.
more in Opinion | Find New $LINKTEXTFIND$ »
By THOMAS FLEMING
'We demand the forgiveness of all debts." After several days of listening to the Occupy Wall Street protesters, I had begun to lose all hope of grasping exactly what they wanted, beyond some sort of "change." I was almost relieved to hear this endorsement of a solution to a specific problem, especially pertinent to protesters in their age group who owe millions of dollars to the federal government for the money they borrowed to go to college.
Many of the protesters who demand relief from college loans, of course, want to divert attention from their personal benefit—so they've escalated it to an overall cancellation of every debt in the country, from home mortgages to the red ink on credit cards.
Did they know, on this point, they were echoing Thomas Jefferson? If so, these protesters and their sympathizers might want to think twice.
Associated Press
Do protesters know that they're echoing Thomas Jefferson?
Debt forgiveness was not original with Jefferson, who enunciated it in a letter to his favorite correspondent, James Madison, on Sept. 6, 1789, when the French Revolution was picking up steam in Paris. Since 1784, Jefferson had been America's ambassador to France. There he had an on-the-ground view of the emergence of the historic upheaval, which he totally endorsed. The forgiveness of all debts was one of the early demands of the rebels, who declared, as Jefferson wrote in his letter, that "The earth belongs to the living."
This struck Jefferson, who was already in considerable debt back in America, as a brilliant idea. (He would die owing the equivalent of a million modern dollars.) He rushed to communicate the idea to his favorite political disciple.
Madison already had pushed through the Virginia legislature a bill by Jefferson to end the Anglican (Episcopal) Church's status as the state's established religion. Perhaps Tom thought another year of dexterous politicking by the canny Madison could turn Monticello's ledgers from red to black.
Jefferson's letter was enthusiastic, even giddy. Not only should debts be forfeited by every generation, he wrote Madison, but all the acts of government, from a constitution to the most trivial laws. By his calculations, a generation completed its career every 19 years. Thereafter, a new debtless generation would take charge, ruled by a new majority, ready and eager to create its own laws.
In a masterpiece of understatement, James Morton Smith, the editor of "The Republic of Letters," a three-volume collection of their correspondence, says Madison's reply to Jefferson's proposal was "a severe test of their friendship." Point by point, the younger man demolished Jefferson's silliness with polite but irrefutable logic.
Every generation should write its own constitution? Having just emerged from a bruising, exhausting two-year struggle to write and ratify the American charter, Madison thought repeating this task would create "pernicious factions" that would repeatedly deadlock, leaving the nation with no government at all during such "interregnums."
The earth belongs to the living? This, Madison remarked, referred to the earth "in its natural state only." It omitted the crucial importance of the improvements made by the dead, from which the living benefit. The same was true for debts, many of which were contracted by governments and individuals to "benefit posterity as well as the living generation." There was, Madison thought, "a foundation in the nature of things" for the descent of obligations from one generation to another. "Mutual good is promoted by it."
Madison closed by diplomatically suggesting that the United States, just beginning its career under the new Constitution, was not ready for such "philosophical legislation." It would take a long time for the "sublime truths" of philosophy to become visible "to the naked eye of the ordinary politician." Although I am sure Madison did not intend it, those closing words come close to sarcasm.
Jefferson never mentioned the idea again to Madison or anyone else.
Mr. Fleming, a former president of the Society of American Historians, is the author, most recently, of "The Intimate Lives of the Founding Fathers" (Smithsonian, 2009).
Review & Outlook: What's Occupying Wall Street? - WSJ.com
via online.wsj.com on 10/15/11
- REVIEW & OUTLOOK
- OCTOBER 14, 2011
What's Occupying Wall Street?
The protestors have a point, if not the right target.
more in Opinion | Find New $LINKTEXTFIND$ »
In the matter of Occupy Wall Street, the allegedly anticapitalist movement that's been camped out in lower Manhattan for the past few weeks and has inspired copycat protests from Boston to Los Angeles, we have some sympathy. Really? Well, yeah.
OK, not for the half-naked demonstrators, the ranting anti-Semites, Kanye West or anyone else who has helped make Occupy Wall Street a target for easy ridicule. But to the extent that the mainly young demonstrators have a valid complaint, it's that they are trying to bust their way into an economy where there is one job for every five job-seekers, and where youth unemployment runs north of 18%. That is a cause for frustration, if not outrage.
The question is, outrage at whom? On Wednesday, Occupy Wall Street marched on J.P. Morgan Chase's headquarters, after having protested outside CEO Jamie Dimon's home the previous day. That's odd, seeing that J.P. Morgan didn't take on excessive mortgage risk and didn't need (although it was forced to take) TARP money. The demonstrators also picketed the home of hedge fund mogul John Paulson, who made much of his recent fortune betting against the housing bubble, not helping to inflate it.
As for Wall Street itself, on Tuesday New York state Comptroller Thomas DiNapoli issued a report predicting that the financial industry will likely lose 10,000 jobs by the end of next year. That's on top of the 4,100 jobs lost since April, and the 22,000 since the beginning of 2008. Overall New York-area employment in finance and insurance has declined by 8.9% since late 2006. Even Goldman Sachs is planning layoffs.
Peter Wallison on how reckless government policies caused the financial crisis.
The Occupy Wall Street protesters in New York appear unfocused and disorganized. WSJ's Hilke Schellmann takes a peek into the inner workings of the organization and how it is trying to manage communal living in a public space.
So much for the cliche of Wall Street versus Main Street, the greedy 1% versus the hard-done-by 99%. That may be the core conviction of Occupy Wall Street and its fellow-travelers, and it may be a slogan in nearly every Democratic campaign next year, including President Obama's. Whether or not that's smart Democratic politics, the voters will decide.
Associated Press
Occupy Wall Street protesters march around One Chase Manhattan Plaza on Wednesday in New York.
Still, if anyone in the Occupy Wall Street movement wants an intellectually honest explanation for why they can't find a job, they might start by considering what happens to an economy when the White House decides to make pinatas out of the financial-services industry (roughly 6%, or $828 billion, of U.S. GDP), the energy industry (about 7.5% of GDP, or $1 trillion), and millionaires and billionaires (who paid 20.4% of all federal income taxes in 2009). And don't forget the Administration's rhetorical volleys against individual companies like Anthem Blue Cross, AIG and Bank of America, or against Chrysler's bondholders, or various other alleged malefactors of wealth.
Now move from words to actions. Want a shovel-ready job? The Administration has spent three years sitting on the Keystone XL pipeline project that promises to create 13,000 union jobs and 118,000 "spin-off" jobs. A State Department environmental review says the project poses no threat to the environment, but the Administration's eco-friends are screaming lest it go ahead.
Dorothy Rabinowitz on the Occupy Wall Street protests.
Then there are the jobs the Administration and its allies in Congress are actively killing. In June, American Electric Power announced it would have to shutter five coal-fired power plants, at a cost of 600 jobs, in order to comply with new EPA rules. Those same rules may soon force the utility to shutter another 25 plants. Bank of America's decision last month to lay off 30,000 employees is a direct consequence of various Congressional edicts limiting how much the bank can charge merchants or how it can handle delinquent borrowers.
These visible crags of the Obama jobs iceberg are nothing next to the damage done below the waterline by the D.C. regulations factory, which last year added 81,405 pages of new rules to the Federal Register, bringing the total cost to the U.S. economy of regulatory compliance to an estimated $1.7 trillion a year.
Less easy to quantify, but no less harmful, are the long-term uncertainties employers face in trying to price in the costs of ObamaCare, Dodd-Frank, the potential expiration next year of the Bush tax cuts, the possible millionaire surcharge, the value of the dollar and so on. No wonder businesses are so reluctant to hire: When you don't know how steep the trail ahead of you is, it's usually better to travel light.
This probably won't do much to persuade the Occupiers of Wall Street that their cause would be better served in Washington, D.C., where a sister sit-in this week seems to have fizzled. Then again, most of America's jobless also won't recognize their values or interests in the warmed-over anticapitalism being served up in lower Manhattan. Three years into the current Administration, most Americans are getting wise to the source of their economic woes. It's a couple hundred miles south of Wall Street
Wall Street protests go global; riots in Rome
via News's Facebook Wall by News on 10/15/11
Wall Street protests go global; riots in Rome
Wall Street protests go global; riots in Rome
ROME (Reuters) - Thousands of demonstrators took to the streets across the globe Saturday to denounce bankers, politicians and businessmen for ruining the world's economies, with violence breaking out in Rome as angry protestors torched cars and smashed bank windows.
Occupy Wall Street: legal observers give protesters advice - video | World news | guardian.co.uk
via www.guardian.co.uk on 10/15/11
Members of the National Lawyers Guild give Occupy Wall Street protesters advice on dealing with the police during their march to Foley Square in New York
Occupy Wall Street tries to maintain message - video | World news | guardian.co.uk
via www.guardian.co.uk on 10/15/11
Demonstrators aim to reach those who 'freeload' at protests on day 24 of a grassroots movement that has spread through the country, now reaching 70 cities
Демократия под натиском капитала
via Русский Журнал on 10/14/11
Я считаю правильным, осуждая авторитарные меры, не упускать из виду глобальной перспективы. В некотором смысле то, на что сетуют россияне, обвиняя Путина в антидемократической политике, является частью всеобщей глобальной тенденции.
Политический смысл акции "Оккупируй Уолл-Стрит"
via Русский Журнал on 10/14/11
Если все эти протестные движения в разных странах мира – от Тель-Авива до Афин, Мэдисона, Мадрида, а теперь и Нью-Йорка – выражают неудовлетворение существующими структурами политического представительства, то что же они предлагают в качестве альтернативы? Что это за "реальная демократия", к которой они призывают?
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"PERISCOPE - ПЕРИСКОП" via Mike Nova
"PERISCOPE - ПЕРИСКОП" via Mike Novavia Александр Морозов on 10/14/11
http://www.russ.ru/pole/Demokratiya-pod-natiskom-kapitala
хорошее интерью с Йеном Шапиро о демократии.
(Правда, в нем напрашивается незаданный, к сожалению, вопрос: а как интерпретировать ситуацию, когда большинство энергично выступает за "несменяемость власти").
Новая прекрасная Америка и осада Уолл-стрит
via Русский Журнал on 10/15/11
Движение "Захватим Уолл-стрит" стало очередным поводом считать, что почтенная американская мечта теряет силу. В американском культурном пространстве появился образ класса не просто богачей, но “Superrich” – сверхбогатых, которые делают, что хотят, обладая особыми правами и не подпадая под юрисдикцию закона.
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