I am also working right now to do something about that.

The video from YouTube, Why Obama Now, in my previous post The Barack Obama Who Can Explain It All, has engendered a lot of discussion.

One poster made the claim:

CLINTON DEREGULATED THE BANKS AND MADE THEM GIVE THOSE BAD MORTAGES TO THE PEOPLE WHO COULD NOT AFFORD THEM

I’d turn down the volume of the above quote, but then it would not have been faithful to the tone of the person who made the comment.  I had been arguing from memory that this was not true, but I decided to do a little research to enforce my point of view.

My research took me to the WikiPedia article on The Community Reinvestment Act.

The Community Reinvestment Act (CRA, Pub.L. 95-128, title VIII of the Housing and Community Development Act of 1977, 91 Stat. 1147, 12 U.S.C. § 2901 et seq.) is a United States federal law designed to encourage commercial banks and savings associations to help meet the needs of borrowers in all segments of their communities, including low- and moderate-income neighborhoods.^[1][2][3] Congress passed the Act in 1977 to reduce discriminatory credit practices against low-income neighborhoods, a practice known as redlining.^[4][5]

The Act instructs the appropriate federal financial supervisory agencies to encourage regulated financial institutions to help meet the credit needs of the local communities in which they are chartered, consistent with safe and sound operation (Section 802.) To enforce the statute, federal regulatory agencies examine banking institutions for CRA compliance, and take this information into consideration when approving applications for new bank branches or for mergers or acquisitions (Section 804.)^[6]

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In July 1993, President Bill Clinton asked regulators to reform the CRA in order to make examinations more consistent, clarify performance standards, and reduce cost and compliance burden.^[51] Robert Rubin, the Assistant to the President for Economic Policy, under President Clinton, explained that this was in line with President Clinton’s strategy to “deal with the problems of the inner city and distressed rural communities”. Discussing the reasons for the Clinton administration’s proposal to strengthen the CRA and further reduce red-lining, Lloyd Bentsen, Secretary of the Treasury at that time, affirmed his belief that availability of credit should not depend on where a person lives, “The only thing that ought to matter on a loan application is whether or not you can pay it back, not where you live.” Bentsen said that the proposed changes would “make it easier for lenders to show how they’re complying with the Community Reinvestment Act”, and “cut back a lot of the paperwork and the cost on small business loans”.^[36]

Can you interpret Lloyd Bentsen’s remark, “The only thing that ought to matter on a loan application is whether or not you can pay it back, not where you live”, in a way that encourages banks to make bad loans?

No the banks are the ones who figured out, on their own, how to make money from loans that could not be paid back.

If you read the WikiPedia article there are a lot more details of the history of changes to the act. I encourage you to read the whole thing, because what I have quoted is just the part that proves my point.

Why Obama Now has animated one of Barack Obama’s speeches. Thanks to RogerS for bringing this to my attention.

In the last debate, Mitt Romney seems to have realized that he cannot sell his plans to the American people. That must be why he is pretending that he has a different plan.

Why wouldn’t we believe the future leader of a party that has refused for the last four years to do anything like what he proposed in the debate? Why wouldn’t they be able to reverse course and suddenly try to do what Obama has been trying to do and they have been blocking? I would think the fact that they have lost all credibility on these issues would be enough reason, but that’s just me. I would put more credence in what they have been trying to do when they were not running for election than what they promise to do if you only give them complete control for the next 4 years.

Remember that the “con” in conman comes from the attempt to gain your confidence in the con(fidence)man so he can be free to rob you blind.

The Real News Network has the article Chavez Wins After Massive Voter Turnout.

I thought the US media told me that Hugo Chavez was very unpopular in Venezuela. Yet the observers say the election was fair and honest, the turnout was high, and Chavez got 54% of the vote.

The opposition party was trying to sell the same complaints against a sitting president as the Republicans are trying to sell against ours. Why were 54% of Venezuelans able to see the reality? Is it because Hugo Chavez is a real socialist and the Venezuelans have seen what real Capitalism can do to them?

About the only thing that could go wrong is that the capitalists in Venezuela convince the capitalists in the USA to make another attempt on Chavez’s life. Chavez at a UN appearance didn’t say that George W. Bush had the smell of the devil without good cause.

The Real News Network has the report General Strike Solid in Greek Town Chania. The article has links to other videos covering the situation in Greece.

The video from this article is shown below:

I wonder if my cousin who has new Greek inlaws because of his daughter’s recent marriage still believes what these people tell him about how lazy the Greek citizens are and how they deserve the economic disaster that has been forced upon them.

Because these are my relatives who are giving me grief over these reports, I will refrain from my usual sarcasm except to wonder if my cousin would agree that the lazy Greek doctors ought to have their salaries cut in half and needed medical supplies withheld. Would he subscribe to the same practices to rein in medical costs in this country?

I found some Elizabeth Warren supporters who were fooled into thinking that there was even an iota of truth in Scott Brown’s false interpretation of Warren’s work on the case related to victims of asbestos related illnesses.

I recommend my previous post Fact Check: In Travelers Case, Warren Fights for Victims’ Compensation as an antidote to Brown’s unethical interpretation.

Here are two recent, related political ads from Elizabeth Warren.

“Reckless, amateurish—that’s what news media and fellow Republicans called Mitt Romney’s gaffe-filled July tour of England, Israel and Poland. When our U.S. diplomats were attacked in Libya. The New York Times said Romney’s knee-jerk response ‘showed an extraordinary lack of presidential character.’ And even Republican experts said Romney’s remarks were ‘the worst possible reaction to what happened.’ If this is how he handles the world now just think what Mitt Romney might do as president.”

I am not too thrilled with President Obama’s saber rattling attitude in foreign relations. Imagine if we had someone who had even less peaceful inclinations as Mitt Romney does.

See my previous post Elements in Iran and US that Want War to understand what is lacking even in an administration that supposedly understands nuance and subtleties. I am hoping that it is only politics that drive President Obama’s seeming inability to understand the motives of an opponent.

Mark Thoma has posted the article What Really Happened.

Thoma says the following:

This is from David Warsh (note that, despite Dodd-Frank and other regulatory measures instituted since the financial crises,we are still susceptible to the shadow bank run problems described below):

What Thoma quotes extenively is a review by David Warsh of a book that is soon to be released.

What Really Happened – Economic Principals: …the best economics book on the fall calendar … (to be published next month) is a slender account about the circumstances that led to that near meltdown in September 2008, and an explanation of why they were not apparent until the last moment.

It is very important for people to understand the shadow banking system that was the proximate source of the collapse in 2008.  If you think that the Federal Reserve System is the sole or even the largest source of the U.S. money supply, then you need to educate yourself about the shadow banking system.

It is also instructive to see how economists can create new theories to explain large swaths of history that are based on certain changes to the laws regulating the economy, and then forget that they have to revisit the explanations when the laws revert to what they were before that new explanation was proposed.

I guess, that due to my excessive age, I was able to remember the explanation of what set us on the road to relative economic stability and imagine the consequences of Bill Clinton and the Republican Congress’s repeal of the Glass-Steagall Act.  The Democrats in Congress who vociferously opposed this repeal could see what was coming, too.  Some say that by the time the act was repealed, the system had changed enough to get around the act anyway.  In either case, the outcome was foreseen by many.  The crash of 2008 was that foreseen outcome.

Elizabeth Warren was one of those who were forecasting the crash some years before it happened.  In her in-person political speeches she presents a nice, short history of where we came from in the aftermath of 1930’s depression and how we got ourselves right back into the same fix.  Scott Brown has shown no indication that he has a clue as to what happened.

Mark Thoma has posted the article ‘The Progress is Real’ quoting Paul Krugman.

Thoma adds the insight:

That brings up the second point. Republicans in Congress have blocked efforts to implement fiscal policy measures over and above the initial stimulus effort (and they would have blocked the Fed as well if they had the power to do so). An aggressive infrastructure construction effort would, for example, buttress monetary policy and speed the recovery, and it would also provide benefits (including higher future growth) that exceed costs, but Republicans are not going to let that happen. This is like hiding half of the medicine a patient needs for recovery based upon medical quackery, and then asking why the doctor is doing such a lousy job.

This is the metaphor I always think about, but perhaps Thoma states it better than I would.

I think about the example of the use of anti-biotics. If you are going to use anti-biotics, you must use the full dose. If you don’t use the full does, you leave behind the organisms that were able to survive the partial dose. These are the organisms that mutate into anti-biotic resistant ones. At some point, when you do apply full doses of the previous anti-biotic, they no longer work because of the partial doses that went before.

In the case of the economy, the more often you apply a stimulus that is too weak, the more likely you are to develop an economy that becomes resistant to stimulation. In this case, the stimulus that would have been big enough when you first applied the weak stimulus is now no longer big enough. You now have to apply a stimulus that is even bigger than the one that would have worked in the first instance.

The headline Jack Welch Is Wrong! ‘It’s Outrageous’ to Say the Jobs Number is Manipulated: EPI’s Mishel comes from the interview on Yahoo!’s Daily Ticker pod cast.

“It’s a shock to hear that anybody can think that these numbers were manipulated,” say Lawrence Mishel, president of the Economic Policy Institute, in the accompanying interview with The Daily Ticker. “Having followed these numbers for 25 years and knowing the people who put them out it’s absolutely bizarre…It’s outrageous. The data is based on surveys of tens of thousands of employers and households every month.”

In the interview, Lawrence Mishel called the people who claim the number to be manipulated “despicable”.

Even before you hear what Lawrence Mishel says about the numbers’ non-political import, you can tell by Jack Welch’s response how bad they seem for Republicans’ political ambitions and therefore how good they must be for the economy.

After all, if the numbers could be forced to be manipulated by President Obama, he certainly would not have them manipulated to make himself look bad.

This follows along with the logic of President Obama’s remarks in the debate that Mitt Romney would not keep the details of his economic plans secret because they were too good to tell to the public.

I think that a con-man like Mitt Romney would of course keep his plans secret because the pigeons wouldn’t fall for the plan if they knew the details or knew that the plan did not actually exist. I wonder if the President was being too subtle by not stating the case against Romney the way I just did.

Perhaps the President understands psychology better than I do. People being conned tend to stick up for the con man even more strongly when their judgment is put in doubt by being told by someone else that they are being conned.