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John Stossel’s Politically Incorrect Guide to Politics, Part 2
Tuesday, October 21st, 2008This one looks at the financial meltdown.
21 Responses to “John Stossel’s Politically Incorrect Guide to Politics, Part 2”
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It would be better if he had worked in the fact that loan originators were contractually only on the hook for mortgages that went bad in the first 90 days (sometimes 180). Naturally the originators put out 2/28 loans where the borrower got crazy low teaser rates for the first two years, at which point rates and payments reset to absurdly unaffordable levels. So the borrowers could afford the loan long enough that the originator couldn’t be held responsible for the inevitable failure. So the originators could profit without bothering to generate mortgages that would be viable anywhere close to the entire 30 year term, and held none of the risk.
That risk disconnect really made the generation of all the horrible loans possible.
(Incidentally, the originators I’m talking about were mostly (all?) unregulated.)
Yeah, from what I understand, although Fannie and Freddie may have made it worse, the subprime mess absolutely would have happened without them. They were late getting into the subprime business. It’s a little disingenuous to place all of the blame on them.
Frankly, we’re allowed to say that free markets can lead to bubbles. There was clearly a disconnect with risk and information. No one (who’s honest) ever said that free markets are perfect.
This is more of Stossel’s usual fact-free and empty headed populism. Its says a lot about Balko’s economic knowledge that he repeats this crap.
Actually, Radley seems pretty consistent in his stances against prohibition, corporate welfare, social security, income redistribution, government spending, censorship, and bureaucracy. Which libertarian ideas does he disagree with? Are you voting for a third party candidate, or do you believe there is an actual difference between the two main candidates, both of whom have spent the last 18 months lying, slandering each other, and making absurd promises with no discussion of how they will fulfill them while being as non-offensive as possible, both of whom have supported expanding the size and scope of the federal government, and both of whom place government authority firmly above individual rights?
This is more of Stossel’s usual fact-free and empty headed populism.
What did Stossel say that wasn’t factual?
Thanks for this series of posts, Radley.
I thought everything Stossel said was accurate, and he explained it pretty well.
You make my point Brandon (#5), I can certainly understand someone angry with both parties, but Balko is openly cheerleading for Obama because he is really a democrat, and he is trying to curry the good favor of Washington type journalists in hopes of furthering his career.
I don’t buy the idea that by wrecking the country we can make it better. Socialist are experts and getting the ball rolling and having it take decades to roll back the idiocy. Ask the good folks of Hungary, Bulgaria, and Mexico how domination by socialists went for them.
And all for the hope that maybe a President Obama will ease up on dope smokers. Shame!
Balko is also the kind of guy that relishes being in the “in” crowd. I think he’s been stunned at the negative feed back he’s been getting because all his buddies are voting for Obama and he’s buying all the polls. He takes a typo by a guy and runs with it.
Caro Parto, you are aDORable!
Didn’t we just wreck Iraq to make it better? Faced with a choice between plain old socialism and a blend of socialism with fascism, aka national socialism, aka republicanism, I know what I’d prefer.
OFF TOPIC–but was wondering whatever happened to the GWB Libertymeter? Did it implode when the needle went below 0 or what? I was curious after the bailouts, etc. to see where it was reading.
He is fact free by still blaming it the financial meltdown on the Fannie, Freddie & the CRA.
At this point it lies at the feet of CDS and CDO tranches.
Here is a pretty good editorial that sums it up better.
http://www.dallasnews.com/sharedcontent/dws/dn/opinion/editorials/stories/DN-eco_21edi.State.Edition1.263bfb9.html
The Dallas Morning News is about as Republican a newspaper as you’ll find.
“Take our lumps now” will not get you re-elected if you’re a politician. That’s why we don’t/won’t address the serious financial issues.
Clouds are “perfect”, oceans are “perfect”, and Free markets ARE “perfect”. Their results just may not be what you want (a business may actually fail!). Let’s stop using the word “perfect” without an understanding of what it means.
I love that some people read or see things they don’t agree with and just say it isn’t factual. That’s it! Argument over, I say it’s crap and I win! And since when has Stossle been populist? Are we getting confused with Lou Dobbs here?
I also love the fact that since Radley realizes that McCain sucks, he must be part of the super double secrete world wide agenda to get Obama in the white house. Because it’s obviously a conspiracy against the Republicans over here at the agitator. Obviously, we must all be bought by George Soros and the five Jew bankers who really run the world or whatever it is that the neo-cons believe. It can’t have anything to do with the fact that the bad things about McCain vastly outweigh the good things. The same goes for Obama.
I guess that’s why Radley continually states he’s voting for BARR! But who knows, maybe he really is a Democrat. That’s why he writes such supportive reviews of police brutality, and thinks Naomi Klein is wonderful author, and is so thankful that the 700 Billion Dollar bailout got a 150 billion more in pork added to it by congressional democrats before it passed. Maybe Caro is right, the evidence is just so overwhelming.
Stossel’s theory is garbage. yeah, he peppers it with facts, did you expect to make it up out of whole cloth? Management of these companies (Freddie Mac and Fannie Mae included) made insane bonuses based on unsustainable loans, and the reason they were unsustainable wasn’t because the recipients were poor, it’s because they’re BAD LOANS. The ones that are being defaulted on in droves are the ARMs on overvalued properties and if you look at the “major meltdown” markets (Phoenix, Miami, Vegas, California) and who the loans were made to, it has very little to do with CRA and Fannie Mae/Freddie Mac and everything to do with speculative house/condo-flippers who would rather walk away from a bad deal then spend the rest of their lives in hock for a devalued property. Give me a break.
Factual or innacurate, love Stossel or hate him, this was one well-made hour of TV – a real rarity! If it made just one person THINK about government waste and the two parties before voting, it was a winner. A good black comedy, too.
Mattocracy nailed the Lou Dobbs thing!
He is fact free by still blaming it the financial meltdown on the Fannie, Freddie & the CRA.
Well, that’s not really “fact free.” Stossel talked to a couple of economists who have different opinions than you do, that’s all.
The Dallas Morning News is about as Republican a newspaper as you’ll find.
I’m not sure what that’s supposed to mean. Republicans seem to be as clueless as Democrats.
It was a good show, I watched all 6 when RB posted the first. Yet this segmented seemed intellectually dishonest because he didn’t mention the CDS and such that had strong role in turning it all into a real disaster.
I want to like Stossell but I am still very suspicious of his stuff; keeps me on my toes I spose.
“Well, that’s not really “fact free.” Stossel talked to a couple of economists who have different opinions than you do, that’s all.”
There are facts, there just aren’t enough of them.
He chose a politically correct subset of the facts that explain the problem.
Yes, Stossel was being politically correct – correct in the view of the politics of people who want to believe the problem was all Democrats, Fannie, Freddie, and the CRA.
Stossel would be better off going back to consumer product reporting, and leave economics and finance to the experts. He’s woefully ill-equipped and not credible.