Rush Limbaugh: Who Lost Capitalism?

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Actually, Rush is correct on his assesment of this situation. If you review the revision of the CRA bill that was signed by President Clinton, it mandated that banks and institutions had to give a proportional amount of loans to "high risk" low income people. So, for banks and institutions to create more loans, they had to increase their loans to these higher risk individuals. They made this revision after "walking the streets of the lower income areas of LA and other cities to find what "the people wanted", YES! It is documented in the official press release of the speach given by the government waccos,who congratulated themselves for being so caring for everyone. By the way, the CRA was inacted in 1977 by our liberal friend Jimmy Carter. So,even though it made all of us feel good about lending to "the needy", it also sent a message that anyone can get a loan...Lower the bar, do not worry, Freddy and Fannie are government backed... Yes, I agree that the Wall Street gang is to blame as well.Interesting that the Republicans are getting the blame, but Barry Frank, Chris Dodd and Chucky Schumer- all Dems...were sitting on the committees to make sure they were protecting and getting funds for their lobbying groups such as ACORN (look this one up too..you will be shocked!) Oh,by the way... Barry Obama, was a major recipient of contributions from Freddy and Fannie... (the two that started the dominos to fall) as well as others. Yes, there is blame to go around, but most will tell you that it was the DEMS that started this poo storm...
Being from Illinois, and in a state run by Democratic House, Senate and Govenor for years, as well as Barry Obama, the state is in Financial ruin... the state can not pay its bills, it has the most corrupt officials (Gov. Blagovich will be indited) high unemployment rate, huge crime and gang problems in Chicago (where Barry was the State Senator), and the worst underfunded pension in the country (which the Middle Class worked for)as well as a HUGE state deficit. It is very concerning that people want to vote for Barry. No one ever heard of him until this election- Meaning most of the people in IL. Barry is linked to just about every "corrupt IL politician in IL....
So... I guess what Rev Wright said is true.. With all of this.. the "Chickens are coming home to roost.

Vince of IL 3:13PM September 28, 2008

The Idea that unbridaled capitalism will allow all to enjoy in the party has never been proven. Without exception, every runnaway gov that tries it fails and is lost or reduced to ashes that it must spend years rising from. This is our 3rd such time. Why can we not learn from our mistakes. We blame the "dead beat" that "wont" pay his commitment and then, out of the other side of our face we say" If the labor is cheaper over there, lets use it." China is laughing.
But my point is not that capitalisn is to blame, my point is that if you disagree with that policy, it does not mean that one may no longer live in America. It means stop voting repub when you economic status does not justify it.

Manni of US of TX 11:46AM September 27, 2008

Wow, Rush appears to be loosing it! Did those 'medications' he was taking affect his faculties?

Pakadave of MD 6:58PM September 26, 2008

"liberal government policies that were used to force the issuance of trillions of dollars in risky loans"
Yes, yes, Merrill Lynch and Bear Stearns, and Lehman, they sure were forced by hippies to make those loans. Oh, those poor mortgage brokers who took points, them too. And that poor Hank Paulson. All of them ganged up on by these nasty black people and hippies.
When will the powerless stop beating up on the powerful? Only multimillion dollar talk show hosts can provide the necessary wisdom.

Brock Ducharme of IA 3:34PM September 26, 2008

The economy is fundamentally sound.
This is all psychological, a "mental recession" as it were.
We're becoming a nation of whiners.
What's the problem?

rash limpnoggin of WI 12:23PM September 26, 2008

I think the tendency in these situations is to try to find a scapegoat. Greedy bankers, unqualified borrowers, sub-prime loans, Capitol Hill, social engineering, unfettered free markets, etc. But I see no one looking at the overall picture. The questions I have are simple ones but would help me (and maybe others) to understand the actual causes of the meltdown.
What percentage of the assets of the in trouble institutions are first time buyer mortgages?
What percentage of the assets are sub-prime loans (minus first time buyers)?
What percentage of assets are real estate "flippers"? Those that buy up real estate on spec?
What percentage of assets are loans to shaky institutions?
While I don't like "golden parachutes", I don't think they are at the heart of the problem. Yes, they induce risky behavior by removing personal risk to the execs but they don't bankrupt the companies on their own. The boards are supposed to balance the risky action against long term benefit to the company. In other words, don't blame the CEO, blame the boards. I see it as a tendency to "follow the leader" and shirk responsibility to the shareholders.
Personally, I am opposed to a bailout. I think that will just make the recovery from this mess more drawn out and more painful. What I visualize happening without a bailout is a restructuring by the markets where stronger institutions swallow up the shakier ones. Left to its own devices, this shouldn't take more than 6 months to stabilize and the economy return to growth. A bailout might speed this up but I doubt it since it will introduce an unknown quantity into the equation and slow re-organization of the financial institutions, perhaps by bolstering weak institutions into attempting to expand their way out of a weak position.
Just a layman's POV. I am probably wrong.

Douglas of FL 10:07AM September 26, 2008

Rush is so wrong to simply blame liberals for pressuring the mortage industry to lend to bad debtors! That is only suicide to the lenders as has been shown, so they should have resisted and pushed back, they ultimately bear the responsibility.
Posner should get his own radio show, Rush is so caught in his idiology that he can't see straight. Greed did have a part and playing fair and smart became a disadvantage to short term sucess. Owning your own house is a great dream that the gready investment bankers and loan officers preyed on.

nikduke of MA 9:17AM September 26, 2008

On the radio, Rush was actually focusing on the micro-economic side of the equation saying that persons were able to purchase houses without actually having earned enough. That is, they had not worked long or hard enough to save enough to be able to buy a house.
The macro-economic equation is far more important. While an individual or family may or may not deserve a house, if society produced that house, then society as a whole deserves it. It is important to note that the blood and sweat of individuals built those houses. They were not built by our byzantine credit and finance system.
Borrowing and credit systems predate modern capitalism and modern economics and is almost as old as money itself. And yet these are a poor sob-sisters within a free economic system. It is hardly free, and it is hardly competitive, and is largely driven by the government and corporate interests. With a free market system, you would want all elements to be competitive and beneficial to all. The next phase of capitalism will have to be one where the economy benefits from intelligent design.
The key to that design is reducing or eliminating borrowing and debt instruments in favor of a monetary policy that is geared toward productivity. You want enough money available to purchase what is produced or what is to be produced. More than that is inflationary. Less than that is depressive. Any distributions to replace the failing credit system should be even throughout the economy. Besides being unjust, uneven distributions would have the effect of being inefficient.
After the tech bubble and 9/11 the Fed did want to stimulate the economy by making it easier to borrow and finance. It largely succeeded and created a construction boom. And similar to the tech run during the 90's, the result was a bubble. Let's call that bubble gum economics.

Clisthenes of KY 12:51AM September 26, 2008

We don't need everyone owning homes. What we need is good living standards (health, happiness, good financial conditions, ability to take breaks and go on vacations), and an economy with a lot of rental apartments can still provide that, if the landlords are nice to the tenants and grant amenities and some control over the places they're renting.

Rickyrab of NJ 1:48PM September 25, 2008