*jaw drop*

Sep. 24th, 2009 01:07 am
mellicious: Retro Houston Astros logo (Astros - retro)
[personal profile] mellicious
Sarah Palin on what caused the financial crisis:

Lack of government wasn’t the problem. Government policies were the problem. The marketplace didn’t fail. It became exactly as common sense would expect it to. The government ordered the loosening of lending standards. The Federal Reserve kept interest rates low. The government forced lending institutions to give loans to people who, as I say, couldn’t afford them. Speculators spotted new investment vehicles, jumped on board and rating agencies underestimated risks.

Now, I know expecting realism from the woman is, well, unrealistic, but really: the financial crisis happened because the government forced the lenders to give loans to the wrong people? This is a new one on me. I have always had the impression that lenders were falling all over themselves to give loans to practically anybody they could talk into taking a house, and whether the buyers could actually afford it was the least of their worries. Silly me.

Excerpts from the speech here. Other bits that caught my eye:

"You can call me a common-sense conservative."

"If you want real job growth, you cut taxes!" (Oh yeah, cause that's worked so well in the past.)

"...we are going to survive, and we’re going to thrive and expand and roar back to life. And as the world sees this, the world will be a healthier, more secure, safer and more prosperous place when this happens."

"I seem to have acquired notoriety in national debate."

(On China) "I’m not talking about a U.S.-led democracy crusade. [We’re] not going to impose our values on other countries. We don’t seek to do that. But the ideas of freedom and liberty and respect for human rights, it’s not just a U.S. idea. They’re very much more than that. They’re enshrined in the Universal Declaration of Human Rights and many other international covenants and treaties." (Among other things, I don't believe for a minute that she knows or cares a damn thing about any Universal Declaration of Human Rights.)

Date: 2009-09-24 02:16 pm (UTC)
From: [identity profile] seweccentric.livejournal.com
FHA loans are insured by the gov't - and allows first time homebuyers to put down as little as 3% and a credit score as low as 580 (conventional loans require a credit score over 640, typically closer to 720). The gov't had multiple programs to encourage this demographic to buy homes, including tax breaks and grants.

Then you have subprime lending - very risky - and often with adjustable rates. This is where a lot of people got into trouble - and many people think they should have never been given loans in the first place.

Date: 2009-09-25 04:15 am (UTC)
From: [identity profile] mellificent.livejournal.com
Oh, I'm not denying that the government deserves part of the blame. I just think the banks were mighty willing partners.

Date: 2009-09-24 02:43 pm (UTC)
From: [identity profile] columbina.livejournal.com
While Palin mostly lives on her own planet, there are parts of this which are sane if you don't scratch too deep. The government did, in fact, loosen and weaken standards over a period of several years, making it possible for the big financial firms to loot the place and float a lot of improbably bad paper.

However, what she overlooks is that "the government" in this case means Cheney et al, who gimped the restrictions on purpose so their cronies could make a lot of cash. In other words, the people running her political party.

Date: 2009-09-24 04:51 pm (UTC)
From: [identity profile] seweccentric.livejournal.com
In 1995 (*cough* Clinton *cough*) the GSEs like Fannie Mae began receiving government tax incentives for purchasing mortgage backed securities which included loans to low income borrowers. Thus began the involvement of the Fannie Mae and Freddie Mac with the subprime market.

Date: 2009-09-24 04:52 pm (UTC)
From: [identity profile] seweccentric.livejournal.com
NOT saying it all lands there, but it doesn't ALL land on Bush/Cheney/Republicans/Conservatives EITHER.

Date: 2009-09-24 05:08 pm (UTC)
From: [identity profile] columbina.livejournal.com
This is true. I do not by any means place all the blame on the Cheney/Junior government. However, I also think there is a quantitative distinction between Clinton's retail-style graft and Cheney's wholesale, cash-and-carry variety.

Date: 2009-09-24 07:50 pm (UTC)
From: [identity profile] profrobert.livejournal.com
I trace this back to the repeal of Glass-Steagall, which was engineered by Phil Gramm, but which Clinton didn't veto because the Democrats wanted to make it easier for (financially unqualified) minorities to get home loans. See what happens when bipartisanship takes hold!

The government support for issuing these bad loans of course then drove up housing prices. As long as prices went up, the borrowers could repay the loans. The other half of the blame lies with the entities that either bought mortgage-backed securities or insured them (credit-default swaps) because their risk analysis failed utterly.

Date: 2009-09-25 05:51 am (UTC)
From: [identity profile] mellificent.livejournal.com
I don't think she wrote this speech. It's still kinda goofy, but it's not as tic-filled as the things she writes herself.

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