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Newsweek: Dangerous greed festival began in the Clinton 90s

Discussion in 'Political Zone' started by Angus, Sep 18, 2008.

  1. Angus

    Angus Active Member

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    Playing It Cool

    Amid the fiscal crisis, some Dems want Obama to crank up the heat
    Sep 18, 2008
    by Howard Fineman


    The complaint from the Democrats in the room was that Sen. Barack Obama wasn't acting enough like… well, they weren't quite sure: Robert Kennedy, maybe, or Hubert Humphrey, or Bill Clinton in the early 1990s. Obama had no fire, they said. He should be way ahead by now, they said. He needed a creative, sweeping new economic proposal, they said. Also, he needed to call them and ask them for their advice.

    This was the drift at a Washington social event I attended the other night, the kind that draws senators, ambassadors and assorted know-it-alls.

    Even as the global economy was crumbling—a huge political boost, at least at first glance, for the out-of-power Democrats—and even though Obama has climbed back into the lead in national polls, the mood among party faithful was sober to the point of gloomy.

    Typical of the sentiment was that expressed by Don Riegle, a respected former congressman from Michigan. A flinty native of Flint, where they used to make Buicks (the plant is long gone) Riegle is proudly old school, the kind of guy who regards an impassioned speech in a sweaty union hall as the epitome of being a Democrat.

    He got wound up even as we chatted. "You've got to be able to convince working people that you'll bust through walls for them!" Riegle told me. Wall busting determination, he said, is what Obama needed display if he hoped to defeat Sen. John McCain. "Obama has to show that he identifies with our people. He's got to become more emotional. He has to show them that he is willing to do anything to see that people can live a better life."

    Riegle's suggestion: Obama goes to Michigan and stands in an unemployment line with workers —the ones laid off in the auto industry, for example. "Just stand there and talk to them," he said.

    Others weren't clear what Obama should do, but they knew it was something. For John Breaux, the cagey Cajun from Louisiana who served 32 years in Congress and who is now a leading lobbyist in the capital, the chief concern was that Obama has not 20 points ahead, which he should be given the state of the economy.

    Some Dems complained that the Obama folks ask for money but don't call to schmooze. A well-to-do former Hillary supporter, but by no means a hardliner, was dismissive. "No one from the campaign calls me except to ask for money," she sniffed—on a not-for-attribution basis only. "The first time I heard from them they asked for $30,000! And I said, `which of my children do you want me to sell?'"

    But I'm wondering if there isn't method in Obama's coolness, even as he tries to amp it up a bit to suit his campaign trail critics. First, he knows who and what he is, and Hubert Humphrey, or Jesse Jackson, Jr., for that matter, isn't it. Obama is not a shouter by nature. Authenticity counts—and so does not evoking the style of, say, Jeremiah Wright. Obama is Harvard Law; it's plain fact. And he may have decided that the best quality to project at thus scary and tumultuous moment is not fire but ice, not roiling emption but studied calm.

    More important, and perhaps more to the point, he is a Hawaiian. He knows something about body surfing. He knows that the key is the wave—to spot it early, to swim out to it, to get on it and let it carry you. You don't fight it; you let its power take over.

    And so Obama must feel about the global economic mess. It is a far bigger and more dangerous wave than he could have anticipated when he launched his candidacy in Springfield in February 2007. Those seem, looking back, like such innocent times.

    The world seems to be standing on the brink of something and huge and ominous. If Obama is as smart and sober as he seems to be, he knows that the next president will face daunting challenges.


    There was some real fear in the room, and it had nothing to do with the Democratic Party.

    I heard it when I talked to Sen. Kent Conrad, Democrat of North Dakota. He is a low-key sort, reared in the soft-spoken ways of the Northern Plains, trained in the bleak science of accounting at Stanford University. Fiscal matters are his forte, though he never seems to get too worked up about them. His idea of high drama in the Senate is an easel with a really great bar chart.

    So I was taken aback the other night by how vehement and shaken Conrad seemed (I've known him for 20 years; I can detect such things).
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    As chairman of the Budget Committee (and ranking member on Finance as well), Conrad is plugged into the socket of the credit crisis. When I saw him he'd just been briefed—and shocked—by Fed Chairman Ben Bernanke and Treasury Secretary Hank Paulson.

    The two men had told him that, if the government had not taken over AIG Insurance, the entire economy of the U.S. and much of the rest of the world could have fallen into deep panic. Like an aggressive tumor, AIG's unsustainable insurance guarantees were spread like poisonous filigree not just in hedge funds, brokerage houses and banks, but also on the books of blue chip corporations atop the Fortune 500. "Some very big names were in danger," he said.

    "They had to do what they did," Conrad explained to me. "No choice." And as we have since learned, the takeover of AIG was not enough to calm the markets. Indeed, it seemed to have had the opposite effect.

    Where the Democrats blameless?

    Of course they weren't. Even Democrats in the room admitted it.

    The bipartisan consensus was that the festival of dangerous greed began in the Clinton 90s. Democrats, abandoning their union and working class skepticism of the markets, threw in with a new crowd of pro-business, pro-deregulation donors. Also, they countenanced an anything-goes mentality at what became the party's favorite new social-uplift tools, Fannie Mae and Freddie Mac. The two behemoths papered the planet with cheap (and, as we now see, shaky) home mortgages, with the whole process run (and protected) by a get-rich-quick cadre of political hacks.

    But the consensus in the room also was that the sordid history didn't contain enough anti-Democratic ammunition to do McCain and Gov. Sarah Palin that much good.

    In politics as in baseball, fans—voters—focus on what happens in the ninth inning, not the first. The Democrats whiffed on the credit crisis in the early years, but now they aren't at bat. It was President George W. Bush who nominated Paulson and Bernanke. If they strike out, it's the GOP that will lose the game.

    Or so Obama has calculated, as he coolly waits for the next big wave.

    http://www.newsweek.com/id/159497
  2. BrAinPaiNt

    BrAinPaiNt Brotherhood of the Beard Staff Member

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    Not to be a CrazyCowboy groupie or anything but...Interesting read...thanks for posting.
  3. MilesAustinforMVP

    MilesAustinforMVP Benched

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    So basically you are saying Democrats need to get back to their liberal principles... I couldn't agree more.
  4. Angus

    Angus Active Member

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    I'm not saying anything. Just reporting the facts, ma'am.

    :)
  5. iceberg

    iceberg detoxed Zone Supporter

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    it was interesting, but what i took note of is the "how do we minimize damange to our party on this" - from 1) the party that had a lot to do with it (conservatives are not known to make life easy for people so easy to get loans wouldn't likely be their first choice) and 2) while i say i care about the common mans life, i again, want to minimize party damage...

    liberals seem to want to give away things they don't have and to me, that got us in this situation to begin with. "you can't afford this loan so you qualify".

    as i understand it, it was the democratic side that pushed this through but i'm still researching/reading/taking note.
  6. BrAinPaiNt

    BrAinPaiNt Brotherhood of the Beard Staff Member

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    I got that and I also got that some basically want a speaker like some preacher giving a fire and brimstone type of speech with all kinds of emotion.
  7. MilesAustinforMVP

    MilesAustinforMVP Benched

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    Actually it was the repeal of the Glass-Steagal Act by Phil Gramm and company which took away the firewalls between the commercial banks, investment banks, and insurance companies. And as far as I know AIG has nothing to do with sub prime mortgages, so that part of your argument really doesn't hold that much water. It was conservative economics of deregulating everything that got us into this mess. We need some good ole fashion progressive economic thinking to get us out of this mess.
  8. vta

    vta The Proletariat

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    Or maybe it's a combination of both.
    Both are guilty of championing a cause to gain votes and both are guilty of knowing full well what the other party is doing and only calling it for what it is come election time.

    Career politicians have one clear goal and that's to further their own career.
  9. iceberg

    iceberg detoxed Zone Supporter

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    well i don't think it was the democrats intent to kill the economy as it has seem to have done or be doing. i believe they really wanted to help but they counted on people who have long since shown they can't manage their own finances to do what they've never shown they can do.

    i also put the blame on those *taking* these stupid loans. it's poor thought on both sides and now we're in a mess and instead of focusing on a solution or what is best now, it's how do i hide our involvement and keep people loving us?

    stop lying and fess up. roll up your sleeves, leave your D at the door with all the other R's and D's and let's all get together and fix this.

    that stance would go a long way with the commonman but would sure upset the party it came out of. this is why i want a new party. one not bound by history and stereotypes.
  10. iceberg

    iceberg detoxed Zone Supporter

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    thanks vta. trying to ignore someone and since i make it a habit of reading your replies.... : )

    not sure how conservative economics of not giving away billions to the unworthy had a hand in this, but ok. some people will say anything, truth be damned, so they can keep their party lines active and membership card in good standing.
  11. vta

    vta The Proletariat

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    What I means is, that despite whether a party has a defining hand in a certain issue, they do know what's going on and they look the other way when it's convenient, only to use it as proof of the other guy's ineptitude.

    In general, no sound mind with economic acumen could have thought any of what was going on would lead to a good outcome, Republican or Democrat. Right now it's a blame fest, with one side blaming the other.

    Our (you, me and the rest of us) side should be blaming them both and not buying the excuses... not that blaming them will help, but at least we'll recognize the folly of playing artisan favorites.
  12. MilesAustinforMVP

    MilesAustinforMVP Benched

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    You are obviously refering to the Community Redevelopment Act that was attached to the Gramm-Leach-Bliley Act in 1999, so that the Dems would vote for Gramm's legislation. The CRA firstly only applied to certain minority groups, and as we know it is not just the minorities who were given all of these sub-prime mortgages, not even close. Moreover most financial institutions are not regulated by the CRA. Conservatives just use that argument as a red herring.

    What happened was without the government to police the markets you had people who got really greedy and took advantage of this lack of oversight. Gordon Gecko was wrong, greed is not good.
  13. ScipioCowboy

    ScipioCowboy More than meets the eye. Staff Member

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    http://www.cnbc.com/id/24998555
    AIG Faces SEC Probe on Subprime Mortgages: WSJ


    The U.S. Securities and Exchange Commission is investigating whether American International Group overstated the value of contracts linked to subprime mortgages, the Wall Street Journal said on Friday, citing people familiar with the matter.

    The way AIG valued credit default swaps, including those backed by subprime mortgages, is at issue, the newspaper said.

    Prosecutors from the U.S. Department of Justice and the U.S. attorney's office in Brooklyn, New York have asked for information the SEC is gathering, which could signal a criminal investigation, the newspaper said.

    AIG, the SEC, the Justice Department and the U.S attorney did not immediately return calls seeking comment.

    According to the newspaper, an AIG spokesman said the company would co-operate in regulatory and governmental reviews on all matters.

    Credit protection costs have risen for AIG, the world's largest insurer, in recent months as losses mounted from mortgage-related investments.

    It posted its largest ever quarterly loss of $7.8 billion last month after writing down assets linked to subprime mortgages.

    AIG in 2006 settled an accounting scandal for $1.6 billion.

    The probe had earlier led to the ouster of AIG's longtime chief executive, Maurice "Hank" Greenberg.

    Copyright 2008 Reuters.


  14. MilesAustinforMVP

    MilesAustinforMVP Benched

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    touche. You have proven me wrong in that regard sir. That still doesn't take away from the remainder of my argument.
  15. iceberg

    iceberg detoxed Zone Supporter

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    yep. who does it more? does it matter since we all seem to let it go on? we can blame all day long but will that fix anything or step up defense?

    to me it will just make people dig in harder that it's the other guys fault regardless of which side you ask. general nature is still that conservatives don't give things away and liberals give it all away. which got us into this mess? making people work for what they want or making it easy to NOT work to in the end lose it? this isn't party affiliation at this point but general moral guidance.

    are you willing to work for your good things in life or should it be made easy and given tons of escape hatches for having an IGS mind?

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