Rich/poor, upper/lower middle class – all relative terms just like being fat or thin. It all depends on your personal reality.

Use the 250K Obama figure and I think you will find people making less than 400K will spend less on cars, vacations, etc. This will not be good for the overall economy.

TB,
I agree that there was a massive “ponzi scheme amongst the mortgage, banking, investment and insurance industry” which was created mainly to get these bad loans off of the banks’ books. The root of the problem was the bad loans. If those bad loans were never made, then the ponzi scheme (a) probably would not have been created; and (b) even if it were created, would not have created all of those bad loans, so the meltdown would not have occurred.

I am not a huge fan of what the Reps stand for right now as I am really more a libertarian, but as JL said, I am going for the lesser of two evils—which is certainly McCain.

Second, virtually every financial publication and Greenspan, the high priest of conservatism has debunked the Fannie talking point–that’s all it is. It was a small part of the problem. What caused the crash was an unregulated, untracked ponzi scheme amongst the mortgage, banking, investment and insurance industry.

Third, none of you conservatives addressed the point I raised about Obama’s proposed tax rates as viewed in a historical light. They don’t seem so radical that way.

Finally, what I can not understand is how people who do have true conservative principles can vote for a Republican any more. They have betrayed all you stand for. You “libertarians” should take a look at who the staff and contributors over at Reason Magazine are voting for–about 1/2 to Bob Barr and 1/2 to Obama. Conservatives should look at The Economist–endorsed Obama. Even Reagan’s son and chief of staff have abandoned ship. Have all these suddenly become Democrats? No, they’ve become anti-Republicans, wanting them punished for their hypocrisy and abandonment of their former core values.

Business

Fannie Mae Eases Credit To Aid Mortgage Lending

By STEVEN A. HOLMES

Published: September 30, 1999

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates — anywhere from three to four percentage points higher than conventional loans.

”Fannie Mae has expanded home ownership for millions of families in the 1990′s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.”

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980′s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”
________

1. Bush is not a conservative as you claim—see Rx coverage for seniors (an idea pushed by the libs for many years) a massive expansion of government costing us hundreds of billions of dollars. That program alone may break us once the baby-boomers start retiring in massive numbers.

2. Conservatives don’t think that the wealthy will act to look out for the middle class in the interest of the general economy. Where did you get that idea? Conservatives believe that everyone will always act in their own best interest, and those actions, when not interferred with the the government, will result in the rewarding of hard work and ingenuity and the punishment of the lack thereof (financially speaking).

3. The funds given to the CEO’s of these failed banks, etc. makes everyone sick, but that should not be the subject of more governmental regulation. Expanding on what Stoner said, the stockholders must give the officers of the companies incentive to focus on the long-term growth of the stock and company. To give a new CEO a big signing bonus and an option package which encourages him or her to focus on the short-term is plain stupid, and the companies that did that should suffer along with their stockholders.

4. The flaw in liberal philosophy, at least a major flaw, is that the government can spend our money better than we can despite the fact that every government entitlement program is a complete and total failure.

5. No matter how much money comes into governmental coffers, it will be spent as our elected representatives try to get money spent in their own districts in order to get re-elected and governmental departments spend every dime they are allocated in order to get an increased allocation the following year.

6. Last, but not least, I am sick of everyone blaming the financial meltdown on conservative philosophy instead of the flawed notions of Freddie and Fannie (created to carry out liberal social policy), and copied below my email comments to you from earlier this week:
_____________________
“The conservative economic philosophy did not cause this meltdown—governmental interference in the free market did.

Fannie Mae and Freddie Mac were created by the Fed Gov’t as private entities, but backed by the Fed Gov’t, to buy mortgages from banks thus creating a market for banks to sell mortgages to thus encouraging banks to loan money to more people thereby encouraging home ownership. The banks no longer cared whether or not the loans were paid back as the risk was on Freddie/Fannie, so they loaned money to anyone who could fog a mirror.

Previous articles politely forwarded to you by me over the last couple of weeks showed that Clinton had Freddie and Fannie lower their standards for the mortgages they would buy which enabled people who were previously not qualified to obtain mortgages to then be able to qualify for them. This policy change caused a huge boom in the housing market which recently burst when the people started defaulting on these mortgages thereby causing Freddie and Fannie to go under.

The creation of entities such as Freddie and Fannie are not a conservative notion. If they were not there, the Banks would have never loaned money to unqualified people because their own necks would be on the line in the event of a default, and this meltdown would not have occurred.”
__________________________