Sci-fi author Orson Scott Card opens his mouth and proves he's a right-wing troll:
… This housing crisis didn’t come out of nowhere. It was not a vague emanation of the evil Bush administration.Err, no. As I've previously pointed out:It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people. Fannie Mae and Freddie Mac were authorized to approve risky loans.
- Fannie/Freddie were authorized to approve sub-prime loans that met their lending requirements, specifically, the ability to pay. These loans were "sub-prime" only in that the people obtaining them had no credit history, not because they defaulted at any significantly greater rate than any other loan in Fannie/Freddie's portfolio.
- The main sub-prime problems were a) liar loans, and b) option ARMs. Fannie/Freddie was not authorized to purchase these and indeed did not do so.
- Less than 5% of the loans in Fannie/Freddie's portfolio were sub-prime loans. Sub-prime loans were not the main cause of Fannie/Freddie's problems.
- At the peak of the sub-prime lending bubble, Fannie/Freddie accounted for only 30% of mortgage-backed securities issued by U.S. lenders.
- The law cited by the tighty righties doesn't even apply to 19 out of the top 20 sub-prime lenders in 2006. Only one of them was a bank that was regulated by the anti-redlining law cited by the tighty righties.
- The main cause of Fannie/Freddie's problems were a severe drop in housing prices, which depleted their cash reserves when suddenly they could no longer sell foreclosed houses for enough to pay off the loans. Fannie/Freddie's foreclosure rate was not unusual at the time they ran into cash problems, only the housing market was unusual.
- The severe drop in housing prices were caused by people who had nothing to do with Fannie/Freddie -- specifically, the drop in housing prices was caused by the sub-prime lenders, who flooded the market with foreclosed houses once the liar loans went sour and the option ARM's reset and people could no longer pay.
-- Badtux the Sci-fi Penguin
Everything is the result of a lot of stupid thinking and women wanting too much. And many men also. There you go.
ReplyDeleteFuck it, I'm doing just fine and will continue to do just fine. I know how to be thankful for what I have even when it isn't much.
Badtux, those steps in the explanation as you lay them out? They're complex. They involve a logical progression of "Because A, then B, which resulted in C..." That sort of reasoning is too complicated for the people Scott is trying to appeal to.
ReplyDeleteThey like logic patterns that go like this: "A". IT'S THE POOR PEOPLES' FAULT! Isn't that a nicer, neater package that won't strain your brain?
The test of America is whether there will be a critical mass of people who want to follow Scott's logic instead of the truth. There are many, but not a majority. However, there is a lot of inert matter in the body politic.
If there is a dense core of 20% mouth-breathers, vs. 33% intelligent citizenry, and 7/15 of the people who can't be bothered to think about anything, things could go either way.
I've actually read a few of the "Ender's Game" series. However, they will be put up on the bookshelf, now.
ReplyDeleteThose who are selfish always blame those who wish to help the less fortunate.
ReplyDeleteSick. Dude. You have not been around the younger generation much? SICK, is a bona-fide compliment. Combining it with DUDE, is even higher praise.
ReplyDeleteSo...from THAT perspective, I agree with you.
Re: FM/FM any organization that builds their future around the anticipation of a never-ending increase in house prices is anticipating, if not contributing to the principle of long-term inflation.
I think that OSC was wrong to suggest that it was mostly the poor in revenue. It was in-fact those of poor judgment who have caused this crisis:
- Yeah. FM/FM management loaned money without a contingency for inevitable market dynamics. Some short-sighted banks too.
- Yeah. Individuals borrowed freely because of the lax consequences in our culture. We can just walk away from our commitments without impact.
- And Yeah. The press is doing a pretty poor job of pointing out the flaws of how we got in this financial mess (which seemed to me to be the gist of the OSC article). I have observed no one in mainstream press actively looking for the 'smoking gun'. And why?
OSC has some compelling arguments in this regard. Some plain, SICK arguments.
T - pedophilia is never "sick" in the way that you refer to.
ReplyDeleteOSC was specifically blaming the poor for the problems of the housing market, and, specifically, for the problems of Fannie/Freddie. Which is just plain nonsense. Fannie/Freddie never bought loans issued to people who couldn't afford the mortgage *at the time it was issued*, and never bought any 0% down mortgages, they always required at *least* 5% down for it to be a qualifying Fannie/Freddie loan. Unfortunately people lose jobs, people get sick and can't work, etc., so there's always going to be some foreclosure activity even on Fannie/Freddie loans.
Regarding Fannie/Freddie's business model: Their business model has a 20% drop in housing prices built in, because they require 20% equity to be covered either by down payment or by mortgage insurance. Historically speaking, it has been very rare for housing prices to drop 20%. But when housing prices dropped *30%*, then Fannie/Freddie started bleeding cash rapidly, because of their normal foreclosure churn no longer producing enough cash to meet their obligations. But it was not a problem with Fannie/Freddie's business model. It was a problem with unrestricted sub-prime loans creating a bubble that collapsed and dumped a lot of foreclosed homes onto the market all at once. If the mortgage markets are properly regulated that doesn't happen.
So anyhow, OSC's argument is pure bunk. Fannie/Freddie's problems had nothing to do with the laws he cites that outlaw redlining and direct Fannie/Freddie to target some of their loans to the poor, and everything to do with a lot of people behaving stupidly, most of whom were *not* poor.
- Badtux the Finance Penguin
We agree on many things, that pedophilia is horrific, people behaving stupidly caused this financial condition, and this should not be attributed to poor folks.
ReplyDeleteYour blog, your control, but:
1) I don't think that OSC promotes or supports ped. in any way. I am never a fan of personal attacks as a smokescreen tactic to the issues. (Learned that in H.S.)
2) Why would we want increasing government regulation? Wouldn't it be preferred to have people behaving stupidly receive a consequence whether "on Wall Street or Main Street". Reward the successful and the strong. Weed out the poor performers (in judgment not savings account size) from our socio-economic gene pool until they too, can become strong.
3) And the fundamental point of the article to me--was where are the un-biased attack-dogs looking for the smoking gun? How did we get where we are today? Who can we depend on to get to the bottom of this mess--and illustrate the cause and effect scenario. Assume the attack on FM/FM is bunk. We are in the middle of it, and WHY?
Those who cannot learn from history, are doomed to repeat it--Santayana.
And THAT, my friend, is one sick opinion.
Uhm, that is *MY RETIREMENT FUND* that just got torpedoed because of lack of regulation. I'm all for the notion of consequences. But I want those consequences to happen to the people who made the mistakes, not to innocent folks who were lied to by the bond rating agencies and told that they were buying AAA investment-grade bonds when they were actually buying liar loans backed by overpriced slum dwellings!
ReplyDeleteBut furthermore, the question of regulation is a question of POWER. I suggest you go read some anarchist power theory and get back to us. Anarchist theory is all about the question of power. The anarchists are totally deranged when it comes to how to deal with the question of power (they hypothesize that if you eliminate all power relationships within a society you could have freedom, when actually what happens is that the most vicious and most venal end up exploiting everybody else), but they are very good at analyzing the power structures in a society. The deal is that money is power. And power is information. Those with power can control information. That leaves lower-information people both unable to gather enough information to know whether they're making a good purchase or not because they lack power to force the powerful to divulge the necessary information. Regulation is needed to force those with power to divulge information necessary to make good decisions, and/or to prevent those with power from tricking those lower-information people with products that We The People have decided are not in the public interest, such as option ARM "liar loans" that cannot be paid by the actual income stream of the home purchaser.
In other words, in a democracy, We The People (i.e., government) use our collective power (via our government) to make sure that individuals or corporations with power cannot abuse that power by depriving individual low-power purchasers of the information needed to make informed decisions and/or sell dangerous products to individual low-power purchasers. In a democracy, We The People *are* government, and government is how We The People make sure that those with power do not abuse that power.
Of course, the United States is not a democracy and never has been, with the possible exception of the presidency of Andrew Jackson, but that's another story...
As for Orson Scott Card, a common theme of many of his books are young people who are abused in most horrific fashion. I'm sorry, but that sort of sado-masochism where children are concerned is troubling, to say the least. As I mentioned, Ender's Game in particular can be read as a pedophile S&M novel...
- Badtux the Power Penguin
Well, Orson Scott Card is a Mormon, so take from that what you will...
ReplyDeleteI liked Ender's Game. When I was 18. I re-read it at 24 and disliked it. I despised all the other books in the series. Orson Scott Card is like Piers Anthony for smarter teens; read it once and then move on to something smarter when you hit college.
Dear James. Thanks for raising the ugly head of bigotry in this dialogue.
ReplyDeleteAlmost all of the Mormons I observe have been decent, hard-working family folks--although generally conservative in-nature. I think I take exception to any veiled blanket innuendo--much less over a group with individuals I have had interaction experience with.
Still. We agree that we are less wealthy than we were 12 months ago. But still have no smoking gun, nor anyone willing to dig and point an accusing finger for our current financial crisis? THAT is the part I want to see:
- We are entertained with programs CSI:everywhere, in less than an hour they put together forensic evidence with an iron-clad conclusion.
- We watch scientific, precision air strikes in battle zones and against ailing satellites.
- Almost every week a new genome is discovered which has evidence of specific characteristics of human DNA.
But for some reason, it is impossible to find out the genesis of this financial crisis? That part of the OSC article was, for me, the one intriguing element. If regulation is the answer--I am all for it. But seems backward to endorse any solution--without understanding the cause.
But again, it seems like a distraction to an intelligent discussion to generalise Enders Game into an SM pedophilia book. 2,000 reviews on Amazon.com accumulate to a 4.5/5 rating.
That argument seems like watching a precision marching band with one person marching in a different direction. What is the probability that one person is right--compared to the rest of the band? Yeah, low probability--but they sure stick out. So I understand the tactic.
But please, for the love of Pete. The OSC article asked one good question. Who is looking for the answers? That is all I want. Then lets FIX IT, and GET BACK ON TRACK!
The problem is not the question that OSC asked. The problem is the answer that he then answered it with, which was incorrect and harmful to people who had nothing to do with the current problems.
ReplyDeleteI've already told you what caused the current problem. It is a collapse in housing prices caused by a runup in housing prices caused by a drastic collapse in lending standards caused by the fact that mortgage brokers were issuing loans to anything with a pulse because they were just flipping to mortgage buyers, mortgage buyers were buying loans that they knew were likely to go sour under the assumption that houses would just continue to go up, and institutional investors buying mortgage-backed securities under the assumption that an AAA rating from a bond rating agency meant these were good loans rather than toxic trash. Government regulation could have solved the problem at a number of places in this toxic mess. Regulation could have outlawed the toxic loan products, regulation could have outlawed securitizing these toxic loans, regulation could have forced bond-rating agencies to rate the toxic loans properly, etc. But the mess itself, we know what caused the mess -- it was all these toxic loans going bad all at once (because they were issued at the peak of the boom in a fairly narrow time period), forcing foreclosures, and then all these foreclosures getting dumped on the market at once and collapsing housing prices.
As for the Mormon faith and its opinion of non-whites, they wouldn't even accept blacks as members until the late 70's. That is a matter of public record and 'nuff said about that.
Nerve central. How is that 'nuff said?
ReplyDeleteMormons dis-allowed their priesthood to men of color. Fact. So did almost every other church out there at one point or another. The American society was built upon acceptable slavery evolving through discrimination, and segregation.
So why just point at the Mormons? Logically then, because of the prominent American culture in the early 1900's, that must make every American a bigot today?
Don't you find that historical perspective gets lost in the emotional opinion of the present.
But for we who promote the anti-bigotry of today--doesn't it seem all-too-familiar discrimination to insinuate someone is inept just because he is a Mormon, and because his religion was separatist 30 years ago--JUST LIKE the rest of the society?
Is it possible that bigotry is still a significant part of our society--if it is so-easy to verbally disembowel one individual because of their religious preference.
So I am sorry. Nerve response. I will come to the defense of any individual who is victimized by bigotry, whether I agree with his opinions or not.