Monday, March 24, 2008

Hillary Clinton Throws Up During Economy Speech

Today Hillary Clinton gave a speech on "Halting the Housing Crisis." During her speech, she really tried to drive a point that our economy is in a crisis because of the housing crisis that is plaguing many people across this country. It is unfortunate that so many Americans are losing their homes, however Hillary tries to place the blame on anything but where it should be placed.

"That means acknowledging that our economic crisis is, at its core, a housing crisis, a crises caused in part by unscrupulous mortgage lenders and brokers and unregulated transactions in mortgage-backed securities, in part by speculators who were buying multiple homes to sell for a quick buck and other buyers who didn't act responsibly."

To begin by placing the blame on those who were lending the money versus who was signing their name on the mortgage paperwork, is pure stupidity. She does credit some of the blame to the buyers, but spends the majority of it pointing to investors and the lenders.

"Communities of color have been especially hard hit."

What is being said with this? Is she implying that "communities of color" were being targeted by mortgage companies? Is she playing the race card?

"If you have paid off your home, if you have a fixed rate mortgage with a manageable interest rate, you have siffered the steepest decline on record."

How is it bad for someone who has paid off their home, or has a manageable fixed rate mortgage the one who is suffering? They are the ones who didn't put themselves in a precarious situation. They were smart and avoided the whole problem.

"They actually owe more for their mortgages that their homes are worth. So what was once their biggest financial asset is now a financial liability."

They owe more than what their homes are worth because they borrowed more than they were worth. Just more ingorance on who to blame by Hillary.

"I put forward an aggressive plan for a 90-day moratorium on all subprime foreclosures and a voluntary five-year freeze on interest rates for all subprime mortgages. The response from this administation? A plan that let banks off the hook and left homeowners to fend for themselves."

Just like her to invite big government in to fix the stupidity of so many people losing their homes. Who is the one who signed the paperwork? The bank or the homeowner? The homeowner got themselves into it, let them figure out a way to remedy it.

Now, on to the point where she throws up!

"Today, I am announcing my four part plan to Protect American Homeowners: A plan to help our families keep their homes and help communities har hit by the housing crisis.

My plan starts with an aggressive new effor to help millions of at-risk families restructure their mortgages and stay in their homes.

The time for action is now - not a month from now, or a year from now - but now. And the reality is that many of our families need more than just basic refinancing.

The Frank-Dodd legislation would move beyond this incremental approach by setting up an auction system for mortgage companies that hold hundreds of thousands of these mortgages. Through this system, these companies could sell mortgages in bulk to banks and other buyers. The buyers would be willing to purchase these mortgages - and restructure them to make them affordable for families - because they know the government will guarantee them once they are refinanced.

But given the severity of today's housing crisis, simply facilitating this auction process might not be enough to get our economy moving again. That's why I believe the Federal Housing Administration should also stand ready to be a temorary buyer - to purchase, restructure, and resell underwater mortgages.

In order to determine whether the approach outlined by Rep. Frank and Sen. Dodd is sufficient - or whether we need the government to step in as a purchaser - I am calling on President Bush to appoint an emergency working group on forclosures. That is the second part of my plan.

That's why I'm proposing an Emergency Working Group on Forclosures.

If it's decided additional steps are needed, then we should investigate wheter - and how - the Federal Housing Administration or other government entities, of Fannie Mae and Freddie Mac, could buy, restructure and resell underwater mortgages.

The third part of my plan is a new housing stimulus package to provide $30 billion directly to states and localities hard hit by this crisis.

That's why I'm calling for the creation of a one-time emergency $30 billion fund that would go directly to cities and states to address the housing crisis.

This money could be used to purchase forclosed or distressed properties, which cities and states could then resell to low-income families or convert into affordable rental housing.

The Fourth and final part of my plan involves passing new legislation to clarify legal liability for mortgage companies that act to help more borrowers stay in their homes.

Now, some may claim that the plan I've outlined today is a 'bailout.' They'll argue that it's not government's role to help. Well, that is the same kind of tired rhetoric we've been hearing for years now. And I think the American people know better. We've had enough of that old ideology. We're ready for solutions here and now."

The time for correction is not now like Hillary states. The time was before they signed their paperwork. They should have taken the time to read what they were signing. If they were dumb enough to get themselves into trouble, their solution would have been as simple as refinancing. Having a call for government to step in and fix it is outrageous. Our government is big enough. Now we are trying to elect someone who wants to make it even bigger? She stated that she would come up with more government big spending programs, that she isn't even sure if they would work. What is her fix for that? More of the same programs. This whole program sounds like a "verbal throw up" of sorts. She could have kept her mouth shut and maybe looked to be a better choice than her opponents, but instead she chose to speak up and look just plain sick. On the brighter side, it does offer a look into what she would be using hard earned tax money for. Bigger government. Is that the answer? NO! Decrease the amount of say that the government has, and put more emphasis on the individual.

Be an individual VOICE against her rhetoric.

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Americaneocon said...

Hi Dan: I agree she's not being fair, but I'll admit, I was a little dumb in signing my mortgage papers, so she's got a point! LOL!

But thanks for the e-mail. I probably should have elaborated more on my point about American decline, and since you're interested, we can debate or discuss things further.

I'm skeptical of the rise and fall thesis for the U.S. case, which ties in to the decline and fall argument. The debate on American decline was going really strong in the late-1980s with the rise of Japanese industrial competitiveness and the significant structural economic problems the U.S. was facing in the late Reagan administration (especially the huge trade and budget deficits).

Historians and political scientists spent a lot of time analyzing the issues, and much of the analysis was very persuasive. I was particularly inclined to support more of an activist trade and industrial policy to promote strategic sectors in the economy, which might have had an impact on beating back Japanese attempts at world high-tech predominance.

In hindsight, our worries of U.S. decline were overblown. The U.S. outgrew all the Western democratic economies in the 1990s. By the end of the decade, America had stretched its lead on all the major measures of great power status. American unipolarity was so pronounced, that some scholars argued that even if a balancing coalition of states wanted to rein in American hegemony, the U.S. lead (in the economy and military spending - which was larger than the top 20 economies combined) was so pronounced that others simply gave up any efforts.

Today, while the considerable budget deficits of the Bush years have troubled some economists, it's been American difficulties in Iraq that have raised the declining hegemon thesis again.

I'm of the belief that while the U.S. is currently strained militarily, economically defense spending as a percentage of GDP is sustainable, and thus we would not be getting to the point of "imperial overstretch" that was the popular critique in the '80s. Paul Kennedy - in "The Rise and Fall of the Great Powers" (1987) - wrote that countries that were overextended military were likely to face strategic decline over the long term.

The problem here? History proved Kennedy wrong. Today, to the extent that the U.S. faces relative decline, one has to analyze comparatively the prospects for America's peer competitors to bridge the gap in America's power vis-a-vis their own.

Even countries like China face decades before they could supplant the U.S. as the world's most vibrant and dominant nation. The locus of technological and financial innovation remains in the U.S. Talk of financial power in Beijing - with the large Chinese balance of payments surpluses - omits the point that for China to pull the plug on capital liquidity to the U.S. would be tantamount to torpedoing its most important consumer market. Economic interdependence makes both parties to a bilataral relationship vulnerable.

How will the U.S. collapse and disintegrate? It's a fascinating question. Most likely it will be a combination of economic weakness and internal chaos (perhaps unmanageable ethnic segmentation emerging from greater and greater diversity).

Yet, Rome's probably not the model of what will happen to the U.S. in the wake of imperial decline. Britain is. We will move into the ranks of second rate powers, and hitch our interests to the dominant state in the system. This could be centuries from now, as far as we know.

The point about immigration needs to be looked at in context, of course. If high rates of continuing in-migration result in demands for ethnic separation (in the Southwest, for example), the traditional assimilationist melting pot model could be threatened and overturned. It's something that has to be considered, and perhaps a period of restrictionism in immmigration - as was the case in the early 20th century - might work to incorporate those already here and build up and renew American national identity.

On the other hand, demographically, the U.S. is expected to be in a much better position in terms of the percentage of young, productive citizens compared to the other advanced democracies. America is much more likely to sustain a large economy and avoid a debilitating social welfare cost liability than is true in the case of countries like Japan.

Given an analysis like this, U.S. preponderance will endure. And should America's dominant ideology of capitalism, liberty, and inclusion prevail over fissiparous multicultural tendencies, then talk of a Roman-style collapse will look quaint and ill-informed - for decades, if not centuries, into the future.

Let me know if you get any more posts up on this.

I don't think the housing crisis or any pending recession's an indication of American decline.

I do give Hillary some credit for tapping an issue that has even smart folks smacking themselves in the head, and saying, "man, I'm an idiot!"

Have a great week!

Critical Thinker said...

Howdy Daniels and Professor,

You make some really poignant arguments, Doc.

I like your analysis of the American decline. I agree, we are in a very rough patch, but hardly the decline into a second rate power. Problem is the hardships we are facing now could be used by the government or the Left to implore more regulation or more socialism. That, I believe would relegate us to the second tier rather quickly.

We have made mistakes and Winston Churchill said it best of America, “You can always count on Americans to do the right thing - after they've tried everything else.” That is us to a tee.


Maggie's Notebook said...

Her five year freeze on subprime interest rates is ridiculous. If it's a subprime rate, we're led to believe that all those mortgages have failed already.

I think, but can't verify right now, that 97% of all homeowers are making their mortgage payments. I'm guessing that before the subprime debacle, that number was still 97%.

...And she'll do all this as she raises our taxes and puts small businesses out of business. FRIGHTENING.

Thanks so much for today's visit.