FOX News...ALL SPIN, ALL THE TIME!

I hate to watch FOX but just channel surfing lately to hear what they are saying I've noticed the obvious increase (if that is possible) in FOX's spinning machinations.  They are going into overdrive to turn this election around.  Desperation is the word that comes to mind... 

OK, just because I posted within a minute of you on two consecutive threads does not mean I'm stalking you...

Maybe it's time someone sue Fox for hiring practices, because they sure seem to have an unusually large number of racists compared to the US population.

Faux News should move their headquarters to Boise, Idaho - they'd find far more white supremecists up there willing to spew their hatred.......

Sigh, it's just those damn poor people. What to do about them? Also, Colbert calls this guy "Neckless Johnson", which I think is hilarious.

I am sick of our Government getting into my space, I blame them all.  The more our government gets involved the more the screw it up.

So who is to blame? There's plenty of blame to go around, and it doesn't fasten only on one party or even mainly on what Washington did or didn't do. As The Economist magazine noted recently, the problem is one of "layered irresponsibility ... with hard-working homeowners and billionaire villains each playing a role." Here's a partial list of those alleged to be at fault:

• The Federal Reserve, which slashed interest rates after the dot-com bubble burst, making credit cheap.
  
  
• Home buyers, who took advantage of easy credit to bid up the prices of homes excessively.
  
  
• Congress, which continues to support a mortgage tax deduction that gives consumers a tax incentive to buy more expensive houses.
  
  
• Real estate agents, most of whom work for the sellers rather than the buyers and who earned higher commissions from selling more expensive homes.
  
  
• The Clinton administration, which pushed for less stringent credit and downpayment requirements for working- and middle-class families.
  
  
• Mortgage brokers, who offered less-credit-worthy home buyers subprime, adjustable rate loans with low initial payments, but exploding interest rates.
  
  
• Former Federal Reserve chairman Alan Greenspan, who in 2004, near the peak of the housing bubble, encouraged Americans to take out adjustable rate mortgages.
  
  
• Wall Street firms, who paid too little attention to the quality of the risky loans that they bundled into Mortgage Backed Securities (MBS), and issued bonds using those securities as collateral.
  
  
• The Bush administration, which failed to provide needed government oversight of the increasingly dicey mortgage-backed securities market.
  
  
• An obscure accounting rule called mark-to-market, which can have the paradoxical result of making assets be worth less on paper than they are in reality during times of panic.
  
  
• Collective delusion, or a belief on the part of all parties that home prices would keep rising forever, no matter how high or how fast they had already gone up.
  

The U.S. economy is enormously complicated. Screwing it up takes a great deal of cooperation. Claiming that a single piece of legislation was responsible for (or could have averted) the crisis is just political grandstanding. We have no advice to offer on how best to solve the financial crisis. But these sorts of partisan caricatures can only make the task more difficult.

@markbfoot199

What a fantastic comment and so nicely laid out!

You are the only person I've ever seen to make mention of the ridiculous mortgage tax deduction as something that has outlived it's usefulness. In the UK, the reported motivation for such tax relief was to increase home ownership as a means to improve the housing stock at a time when many homes were rented from little more than slum landlords. That goal was met many years ago. When it was announced that the relief would end for new purchases and be phased out for existing mortgages, there was uproar in the building and real estate industry. Obviously, these experts were proved to be 100% incorrect and the UK property market went on an orgy or credit fueled expansion. By the way, the UK deduction was typically only for UK Pnds 30K and for a single home rather than the ludicrous $2M and on up to 2 homes that we have here in the US. The figures are off the top of my head so excuse me if I've got them wrong.

Although government must take some of the blame for this mess, the primary responsibility falls on the private sector and, most culpably, those living in the US today. Self interest and a notion of deserving more just for living in the US are the primary causes. Also, a failure of the leadership (both public and private sector) to assign specific blame to the general population will ensure this problem continues ad nausem. It reminds me of the events post 9/11 when one was made to feel like a traitor if you dared to question our own role, however unwitting, in those dreadful events. Does anyone remember Rudy Giuliani criticising Ron Paul during one of the recent Republican primary debates where Ron Paul dared to suggest a possible link between those events and US attitudes in the Middle East? What would Rudy say to Ron Paul if he dared to place a share of the blame for this current crisis on the good citizens of the US, myself included?

@markbfoot199

Hey!! Nice pasting of the information posted by FactCheck.org

Keep up the good copy/paste work!!!

;-) 

The primary responsibility falls on the public sector. By Jeffrey A. Miron Editor's note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A Libertarian, he was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan. CAMBRIDGE, Massachusetts (CNN) -- Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown. This bailout was a terrible idea. Here's why. The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk. Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared. This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle. Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets. The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government. The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company. Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable. In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources. Thoughtful advocates of the bailout might concede this perspective, but they argue that a bailout is necessary to prevent economic collapse. According to this view, lenders are not making loans, even for worthy projects, because they cannot get capital. This view has a grain of truth; if the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time. Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen. Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents. The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion. If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth. The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients. Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets. So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending. The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.

I never cease to be amazed by how different people adopt the polar opposites of, on one hand, everything the government does is bad and on the other hand, everything that the private sector does is bad. Surely, it's not that simple?

I agree that the Fannie/Freddie played a large (but not the largest) part in this mess. Being neither a true government entity or a private sector corporation must, at the very least, generate enormously conflicting pressures. On one hand, we have the government (both Republican & Democrats) pushing to increase home ownership, albeit for differing reasons. Then we have a profit centric management seeking to maximize profit (real or imaginary) for their own (and shareholders) benefit. In hindsight, could this be anything but an ultimate failure?

But to suggest that the  various lending institutions had little choice but to bow to pressure from the government (in all its forms) is a hard sell. I have 2 girls ages 9 and 12. Often one will cite as the reason for some transgression as "My sister told me to do it". I, in my desire to become my parents I reply "If she told you to stick your head in the gas oven, would you do that as well?"  I expect my children to use those excuses. But I also expect the management of those companies promoting loans with little or no underwriting control to have exercised better judgement. Even with explicit regulatory control. Some may claim that such restraint is a distortion of the free market i.e. if it's legal and you can make money, then why not? But as much as companies would have you believe otherwise, participation in a free market (or as near as we get to one) does not preclude a serious assessment of risk. I'm sure all those companies that have had significant asset write-offs all looked at the risk. But obviously, the desire for profit and personal gain outweighed those concerns.

Finally, the question of the cost of borrowing money. It's true that there is a price (interest) that will encourage lenders to lend. But what is it? It currently doesn't bear any relationship to the benchmarks in the US or elsewhere. Logically, the only people that would entertain "market" rates are in the greatest distress and probably the least able to repay. And how would such punitive rates benefit the economy as a whole? Isn't money only going to be lent when the risk/return of holding on to it is less attractive that lending it? Consequently, with risk being almost impossible to calculate at this current time and return being so volatile, it could well be some while before the normal process resumes. How do you make someone lend money at affordable rates when they are reluctant to do so?

Imbeciles pinheads and bumpkins have absolute faith that everything they hear coming out of the mouths of Murdochian mediawhore on FOX Noise is positively irrefutably true. GOP Mess Americorn…Hallelujah, Amen…!

Amity Schlaes is not a WSJ journalist, she occasionally contributes to the editorial page, but she works at the cfr. mmfa, get the facts right.