A Mortgage Fable

The Wall Street Journal ^ | SEPTEMBER 22, 2008

[Eric Blair 2084]

Once upon a time, in the land that FDR built, there was the rule of "regulation" and all was right on Wall and Main Streets. Wise 27-year-old bank examiners looked down upon the banks and saw that they were sound. America's Hobbits lived happily in homes financed by 30-year-mortgages that never left their local banker's balance sheet, and nary a crisis did we have.

Then, lo, came the evil Reagan marching from Mordor with his horde of Orcs, short for "market fundamentalists." Reagan's apprentice, Gramm of Texas and later of McCain, unleashed the scourge of "deregulation," and thus were "greed," short-selling, securitization, McMansions, liar loans and other horrors loosed upon the world of men.

Now, however, comes Obama of Illinois, Schumer of New York and others in the fellowship of the Beltway to slay the Orcs and restore the rule of the regulator. So once more will the Hobbits be able to sleep peacefully in the shire.

With apologies to Tolkien, or at least Peter Jackson, something like this tale is now being sold to the American people to explain the financial panic of the past year. It is truly a fable from start to finish. Yet we are likely to hear some version of it often in the coming months as the barons of Congress try to absolve themselves of any responsibility for the housing and mortgage meltdowns.

[Aria]

Thank you for the explanation. I actually sort of understand it.

[LomanBill]

>>The problem is the derivatives market

Let the NyLon geniuses, who created that market, eat cake.

 

Americans can rebuild from the ashes without their help.   We begin as soon as all their 1s are turned into 0s.

 

The New York T-Bill party - In remembrance of the Boston Tea Party

 

>>and the federal reserve

 

Support HR-2755

[Eric Blair 2084]

I think you understand it perfectly. There are no good guys here per se....except for honest, law abiding tax paying citizens who played by the rules and bought a house they could afford like you and me.

There were plenty of greedy activities by investment banks who figured if Gubmint was going to give you a lemon (loans to people who have no ability to pay it back), you make lemonade... set up a street side lemonade stand to try to peddle the swill and get money. If nobody buys it, than the neighborhood pays.

My thesis is that Carter started the whole thing with the CRA (Community Redevelopment Act) back in the 70’s and than Clinton put it on steroids in 1995 by strengthening the law.

If banks didn’t make the loans, community organizers in ACORN would have been on them like Mike Tyson on a beauty pageant contestant. Forget about getting your merger approved if you were a bank who didn’t give in to the coercion.

[Ilya Mourometz]

Yeah; I’m in favor of returning to a gold standard, but that won’t do squat now. Allowing the entire derivatives market won’t just hurt the tassled-loafer crowd, it will bring the entire US economy to its knees and lead to a civil war. This isn’t a hard landing, it’s a fall into a bottomless pit that will take every man, woman and child in the US down with it.

If a wall is collapsing, you don’t sit there and let it fall on people walking by. You prop it up temporarily, fence it off, and either rebuild it the right way (if possible) or build permanent supports. Saying it’s ok to let the economy crash to prove a point (which I happen to agree with, btw) is not morally or ethically correct. Something must be done, and while it might not be Paulson’s plan, letting it all fall to pieces is the absolute worse thing—it will make 9/11 look like child’s play in terms of the damage it will do to the lives of average Americans.

[Eric Blair 2084]

I agree. Call your Congressman....9 times per day if necessary! He/she works for you, you don’t work for him/her.

Make sure to tell him/her that Gubmint compelling private lenders to loan money to people they would otherwise have no interest in doing business with is overstepping the proper role of Gubmint.

Tell the Congresscritter that you would be in favor of limiting CEO pay to minimum wage or a bag of magic beans if they would stop meddling in free enterprise and coercing lenders to make loans they don’t want to make.

[LomanBill]

[If a wall is collapsing, you don’t sit there and let it fall on people walking by.]

 

And if the wall was part of a prison, built for keeping slaves?    The difference between a castle and a prison is, after all, merely the direction the guns are pointing.

 

We can have a kinder, gentler, Civil War - or we can prop up the wall and indenture our children to the servitude of a system - a system that has taken on a form which has no other purpose than to make itself the object of collective worship and servitude.

 

Let the wall fall, and in its place, raise up a system of financial governance that is true to the intent of the writers of the American Declaration of Independence.   Let us construct a system of governance that has, as it's sole purpose - the securing of the inalienable rights of the governed.

 

 

 

"TO SECURE THESE RIGHTS, governments are instituted among men,  deriving their just powers from the consent of the governed" -  Still as self-evident today as it was in 1776?

[GoodDay]

Regarding McCain’s “weak response,” I’m not so sure that a confident-sounding statement such as “We must investigate!” would be that useful.

Even amongst economic experts, there is no consensus on what to do. Some say (correctly) that the Feds have no obligation to perform a bailout, and should therefore let the market correct itself. Others say (correctly) that the interconnectedness of all this toxic paper might have led to monetary deflation...with a corresponding contraction of payrolls, leading to unemployment and a full-scale depression.

I truly believe that there has been so much market distortion in the past few decades — indeed caused by government intervention, manipulation, and regulation — that there is no easy, no painless, way out.

Fundamental changes, such as (i) return to 100% gold standard, (ii) repeal of legal tender laws, (iii) forbidding fractional reserve banking, and (iv) dismantling the Federal Reserve, would go a long way toward preventing this from happening again (it would also go a long way toward radically curtailing government spending, radically reducing inflation, and stopping the “boom-bust” cycle). In addition, we could use a Constitutional amendment prohibiting government from interfering with the way in which a business conducts its affairs (such as offering loans, mortgages, etc.). The above is my “wish list.”

Something else that would be fantastic if mentioned loudly and clearly by Governor Palin: a renewed commitment by government to protect the citizen’s right to PROPERTY (including a renunciation of the government’s “right” of eminent domain). If Palin said something like that, it would be revolutionary.

I think most of us recognize this much: right now, she is the only viable hope for real, positive change in Washington; much more so than her honorable running mate.

[LomanBill]

 

 

 

 "I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. . . .   Corporations have been enthroned and an era of corruption in high places will follow, and the money power of the country will endeavor  to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed."

 

 -- President Abraham Lincoln, letter to Col. William F. Elkins,  Nov. 21, 1864 

 

 

The train now pulling into the station has been a long time coming...

[dalereed]

“Saying it’s ok to let the economy crash to prove a point (which I happen to agree with, btw) is not morally or ethically correct.”

I’m for having it crash and be waiting at the bottom to take advantage of the losers!

Since I scrapped church at the age of 8 for drag racing I don’t stop for a second before taking advntage of stupid people.

I don’t gamble in the stock market, don’t have retirement acounts or mutual funds, just cash waiting to take advantage of situations like this.

[LomanBill]

[Something else that would be fantastic if mentioned loudly and clearly by Governor Palin: a renewed commitment by government to protect the citizen’s right to PROPERTY]

 

Yes, but in conjunction with that must be a reevaluation of the idea of artificial "personhood" that is currently being endowed upon collective entities via corporate charter.

 

Collectivization of "private" property is leading to corporate, collectivist, communism.  It is enabling corporate collectives to implement socialist agendas that are antagonistic to the American idea of the individual - the individual who is endowed by their Creator with certain inalienable rights.

 

Certainly the right to pursue the truth, through discourse as well as by other means, is an integral part of the pursuit of happiness.

 

Capitalism must be subordinate to the individual pursuit of truth.  

 

Governance, in the form of Corporate Collectivism or otherwise,  should not be allowed to make itself into the object of  worship and servitude.  Governments - systems of governance - are merely tools; and as tools they should be used to secure the rights of the governed.  But objects of worship and servitude are exactly what governments become when the individual, out of whom the collective constructs itself, is deprived of the right of free speech - especially when that speech is critical of the collective itself.

 

That is precisely the reason for our 1st amendment separation between state and religion - WE were protected from being forced to WORSHIP the state.  But now the state has become the corporation.  Clever.

 

The 1st amendment right to free speech must be restored to ALL; whether in the physical collective workplace, or elsewhere.   To recognize the truth in this, we need only observe the silent obedience by which this socialist financial catastrophe was facilitated.

 

Truth and Honor must be restored to the workplace - and it begins, with the Individual. 

 

Let us speak freely again!

 

 

[Cedar]

Great explanation— finally, I understand the situation.

You should be a teacher.

[LomanBill]

[Since I scrapped church at the age of 8 for drag racing]

But didn't you just trade one system of worship for another?

 

I've had lots of religions.   Triathlon was one my favorites.  But...

 

1. Thou shall have no other gods before me.

 

I've found, through personal experience, that my Creator is sort of picky about that one.

 

[I don’t stop for a second before taking advntage of stupid people.]

 

Exactly the attitude that made predatory lender Ameriquest so, temporarily, wealthy.

 

 

Is going to church the only thing that makes one ethical?

[LomanBill]

ping

[LomanBill]

>>I’m in favor of returning to a gold standard

I’m not.

But I am in favor of returning control over monetary policy to the elected representatives of the Republic’s citizens - as per the intent of Article I, section 8, of the United States Constitution.

[GOPJ]

The do-gooder legislators meant well. Now, with the highest in the nation property taxes thanks to Socialist egalitarian policies have caused here, people are fleeing. They can’t afford the taxes.

Unintended consequences...

[GOPJ]

I think most of us recognize this much: right now, she is the only viable hope for real, positive change in Washington...

You're right. She's not an insider - and she's not afraid to go after the corrupt.

[Eric Blair 2084]

 

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Home --> Questionable Quotes --> Lincoln's Prophecy Lincoln's Prophecy Claim:   Abraham Lincoln issued a prophetic warning about the tyranny of capitalism. Status:   False. Example:   As a result of the war, corporations have been enthroned, and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working on the prejudices of the people until all wealth is aggregated in a few hands, and the republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before even in the midst of war. God grant that my suspicions may prove groundless. Origins:   The above quote, attributed to President Abraham Lincoln, has been periodically dusted off and presented to the public as a prophetic warning about the destruction of America through the usurpation of power and concentration of wealth by capitalist tyrants for over a century now, undergoing a renewed burst of popularity whenever wartime exigencies stir public debate over governmental policies. These words did not originate with Abraham Lincoln, however — they appear in none of his collected writings or speeches, and they did not surface until more than twenty years after his death (and were immediately denounced as a "bold, unflushing forgery" by John Nicolay, Lincoln's private secretary). This spurious Lincoln warning gained currency during the 1896 presidential election season (when economic policy, particularly the USA's adherence to the gold standard, was the major campaign issue), and ever since then it has been cited and quoted by innumerable journalists, clergymen, congressmen, and compilers of encyclopedias. Pedigree for this quote is often asserted by pointing to the 1950 Lincoln Encyclopedia, compiled by Archer H. Shaw, which "authenticates" the quote by citing a purported 1864 letter from Lincoln to one Col. William F. Elkins found in Emanuel Hertz's 1931 book, Abraham Lincoln: A New Portrait. However, this source is fraudulent: Hertz was taken in by a forgery, and Shaw, a sloppy compiler, added the bogus letter to his encyclopedia (along with several other pieces of Lincoln apocrypha) without verifying its authenticity. As historian Merrill Peterson noted in Lincoln in American Memory: A Lincoln Encyclopedia, the brainchild of an Ohio newspaperman, Archer H. Shaw, made its appearance in 1950. Here, conveniently arranged from A to Y — from "A.B.C. Schools, attended by Lincoln" to "Young Men, attitude toward" — were the great man's spoken and written words for ready reference. "Mr. Lincoln is the most quotable notable in history," David Mearns opined in the Introduction. He might have added "one of the most fraudulently quoted" as well. Regrettably, some of these errors crept into the Encyclopedia. Here, for instance, was the oft-heard warning against "corporations enthroned" by the war, the letter to Colonel Taylor on the origin of Greenbacks, and an alleged plea to an Illinois jury in 1839 in defense of fifteen women on trial for saloon smashing. Protecting the Lincoln canon from spurious intruders was an ongoing problem. Why have these "money powers" words been put in the mouth of Abraham Lincoln? In a general sense, the reason is because dead people — especially revered leaders — make great commentators on modern-day politics: They can't be questioned about the legitimacy of their comments, interrogated about what they meant, or asked to elaborate about the subject at hand; they can only be refuted through imprudent suggestions that Our Revered Leader was wrong! In a specific sense, this quote sounds plausible because Lincoln's tenure as president occurred during a great war that was indeed the focal point of industrial and economic change in America, and because Lincoln left behind some decidedly pro-labor statements. As Merrill Peterson detailed: It was easy to understand Lincoln's appeal to social radicals, said [socialist William J.] Ghent, for he held very advanced views of the rights of labor. As early as 1847 he had written, "To secure to each labourer the whole product of his labour, or as nearly as possible, is a most worthy object of any good government," which was remarkable for a prarie lawyer of that time. Speaking in New England in 1860, he praised the right to strike, as then being exercised by the shoemakers of Lynn. His clear assertion of the labor theory of value in the 1861 message — "Labor is prior to, and . . . superior to capital" — and his answers to the addresses of workingmen abroad and at home gave a color of Marxism to his thinking. He was, surely, the best friend labor ever had in the White House. Nonetheless, Peterson concluded, even Lincoln's wartime experience and pro-labor credentials don't justify the attribution of the "money power" warning to him: Nevertheless, he was no prophet. Imprisoned in the democratic-capitalist ideology of nineteenth-century America, he believed the free laborer toiled up from poverty to become a capitalist in his own right. Individual opportunity, not class struggle, was his message. Last updated:   26 September 2007 The URL for this page is http://www.snopes.com/quotes/lincoln.asp Urban Legends Reference Pages © 1995-2008 by snopes.com. This material may not be reproduced without permission. snopes and the snopes.com logo are registered service marks of snopes.com.     Sources:     Ghent, W.J.   "Lincoln and the Social Problem."     Collier's   v. 35; #23-24   (1905).     Peterson, Merrill D.   Lincoln in American Memory.     New York: Oxford University Press, 1994.   ISBN 0-19-509645-2   (pp. 160-161, 340).