"It's extortion to quit..." says Barney Frank..

[armor99]

I just watched Face the Nation today, and that was a direct quote from Barney Frank. That if the execs decide to quit over the bonus deal, it is an act of extortion against the american people.

Interesting... I always thought an act of extortion was when someone threatens you harm or damage in one way or another (like a 90% tax). In this case it would just be the execs withdrawing their help. Where is the ACLU on this one? Do they not have the right to quit if they feel like it? Who is really working for whom in this situation? Where is their liberty, their freedom to choose? This one just sent me through the roof. If the govt truly believes it can run AIG better than they can... I say let them have at it. Show the American people how efficient the govt can really be at running a private business.

Once again, the idea of right or wrong is being seen here, through the prism of how much money you have. The execs of all of these companies helped to de-stabilize the economy because of risky busines practices. No argument there. Extended way too many risky loans around, that now have all defaulted.

But where is the govt or citizen outrage at all of those people that took out the loans they could never pay back in the first place? Why does the govt not place a tax on them to help fix the problem that they certainly had a hand in causing? Why not enact a law stating that those people that were irresponsible, or unfit for one reason or another to pay their loan back, cannot own property for 7 years? I know with absolute certainty that I had no hand in causing this financial mess at all, yet more and more of my tax dollars are being spent to fix it. Shouldn't the people who defauted on their loans have to pay more of the burden to fix what they broke? Even if they had to pay it back slowly over 30yrs or so? They ARE getting my money aren't they? Do I get to have a say on how they are going to spend it?

Why is it this way? It is because of the victim mentality that is currently crippling the US. And the way the current tune goes... is that the one with the least money is always the victim, reguardless of whatever it is that they do, and the one with the most money is always the oppressor reguardless of what they did. This is making me ill....

[dex]

I sense the thoughts you express are being thought by many.
Maybe not the "Silent Majority" but maybe the forgotten citizen.

What I think is happening now is that since the discourse against Bush is gone his opposition feel empowered and speaking their true thoughts. I think it is enlightening to many.

Also, there might be a power struggle going on between Polisi, Reed and Obama.

[kumquat]

Quote:

Originally Posted by armor99 But where is the govt or citizen outrage at all of those people that took out the loans they could never pay back in the first place? Why does the govt not place a tax on them to help fix the problem that they certainly had a hand in causing? Why not enact a law stating that those people that were irresponsible, or unfit for one reason or another to pay their loan back, cannot own property for 7 years?

They have a law already. It's called bankruptcy. It lets people who borrow far too much, such that they can never repay, out of their debts. Perhaps certain lenders should have considered that their borrowers might end up there and that their loans had a small chance of repayment?

I'm not (100%) blaming the lenders. After all, if you sell the loan (and someone is dumb enough to buy it) it's a SEP field (see Douglas Adams).

[ziggy29]

If the people want the execs gone and they did resign, how is it extortion against those who wanted them gone?

For someone who has played a prominent role in the mess (and there are certainly plenty of others in both parties who also stepped in it), Barney Frank seems pretty good at pretending it was everyone else's mistake, not his.

Frank, more than almost anyone, urged Fannie and Freddie to water down lending standards, so a lot of the muck has his fingerprints on it.

[armor99]

Thanks for the words of encouragement. This is really getting out of hand.

I have had enough of this... I need to find a forum somewhere here in PHX where I can start public speaking... I feel the need to start talking about this to more people. I encourage others to do the same.

[dex]

THE912PROJECT.COM

[Texas Proud]

Interesting thing I saw about bankruptcy... back in the day of Ghengas Khan (sp?)...

He had a law (if they tell it correctly) that said if you could not pay your debts and did it again... and then a third time and could not pay your debts, you were put to death... lets add this to the current laws and see what happens...

[jug]

Quote:

Originally Posted by armor99 Thanks for the words of encouragement. This is really getting out of hand. I have had enough of this... I need to find a forum somewhere here in PHX where I can start public speaking... I feel the need to start talking about this to more people. I encourage others to do the same.

Good luck, if you can speak like "Blarney Fwank", you'll do ok.

He probably makes his lawschool proud, being able to steal a person's teeth, then when accused, tell such person that the teeth bit him and he is going to sue and press criminal charges against the owner and the teeth.

A better shyster only comes once in a lifetime.

[Midpack]

Quote:

Originally Posted by armor99 I just watched Face the Nation today, and that was a direct quote from Barney Frank. That if the execs decide to quit over the bonus deal, it is an act of extortion against the american people. But where is the govt or citizen outrage at all of those people that took out the loans they could never pay back in the first place? Why does the govt not place a tax on them to help fix the problem that they certainly had a hand in causing? Why not enact a law stating that those people that were irresponsible, or unfit for one reason or another to pay their loan back, cannot own property for 7 years?

Great post, but don't forget it's our gubmint officials who forcibly started the subprime mess in the first place. Carter admin conceptualized it (was a paper tiger) and Clinton admin made it happen (essentially forced banks/mortgage brokers down the subprime path) starting this whole thing rolling. Wall Street stepped in only when Fannie/Freddie were caught with accounting irregularities and amplified the damage with structured highly leveraged investment packages. Fine to blame Wall Street for their part, but they did not start this mess.

Another preposterous quote by B Frank last Sept, "THE PRIVATE SECTOR got us into this mess. The government has to get us out of it." Frank & Dodd had a lot to do with 'getting us into this mess.'

[youbet]

Quote:

Originally Posted by jug A better shyster only comes once in a lifetime.

Wouldn't that shyster be our buddy Dodd?

"They made me put the 'pay the bonuses' clause into the AIG contract"

[USK Coastie]

Comrades,Comrades, Where is John Gault? Barney sure reminds me of the politicos from Atlas Shrugged. Funny how life imitates art.

[Westernskies]

Quote:

Originally Posted by armor99 I just watched Face the Nation today, and that was a direct quote from Barney Frank. That if the execs decide to quit over the bonus deal, it is an act of extortion against the american people. Interesting... I always thought an act of extortion was when someone threatens you harm or damage in one way or another (like a 90% tax). In this case it would just be the execs withdrawing their help. Where is the ACLU on this one? Do they not have the right to quit if they feel like it? Who is really working for whom in this situation? Where is their liberty, their freedom to choose? This one just sent me through the roof. If the govt truly believes it can run AIG better than they can... I say let them have at it. Show the American people how efficient the govt can really be at running a private business. Once again, the idea of right or wrong is being seen here, through the prism of how much money you have. The execs of all of these companies helped to de-stabilize the economy because of risky busines practices. No argument there. Extended way too many risky loans around, that now have all defaulted. But where is the govt or citizen outrage at all of those people that took out the loans they could never pay back in the first place? Why does the govt not place a tax on them to help fix the problem that they certainly had a hand in causing? Why not enact a law stating that those people that were irresponsible, or unfit for one reason or another to pay their loan back, cannot own property for 7 years? I know with absolute certainty that I had no hand in causing this financial mess at all, yet more and more of my tax dollars are being spent to fix it. Shouldn't the people who defauted on their loans have to pay more of the burden to fix what they broke? Even if they had to pay it back slowly over 30yrs or so? They ARE getting my money aren't they? Do I get to have a say on how they are going to spend it? Why is it this way? It is because of the victim mentality that is currently crippling the US. And the way the current tune goes... is that the one with the least money is always the victim, reguardless of whatever it is that they do, and the one with the most money is always the oppressor reguardless of what they did. This is making me ill....

Mr. Frank is a wiener.

[Gumby]

..

[armor99]

Quote:

Originally Posted by USK Coastie Comrades,Comrades, Where is John Gault? Barney sure reminds me of the politicos from Atlas Shrugged. Funny how life imitates art.

I was wondering if someone else was going to say it so I did not have to.... Thanks USK The parallel seems almost uncanny...

[Brat]

Gumby nailed it!!

[samclem]

[
Okay, we agree that they are responsible for this. You and I differ regarding the borrowers: I would not let the borrowers off the hook (financially illiterate or not, notwithstanding the dangling of the "manifest symbol of the American dream" in front of their uncomprehending eyes, etc). I also see MUCH more aiding and abetting on the part of the government--it's not just the CRA, it's Fannie and Freddy (and Barney, Oh my!). But we fundamentally agree that there were two parties that entered into a contract, and others bought derivatives/splits/packages of those contracts. Fine. Just where the heck did I (and you) and our kids sign up in this deal? Were we somehow in on this too, maybe we were going to make a bundle from these ever-appreciating houses and deals based on them? How did I become a party to this? The government needs to get out of this mess. Anybody that wants to voluntarily get involved (and take some risk to help ot the economy) can do so--one could buy up the mortgages (or even the houses themselves) and hope for the best. The prices will get attractive as soon as the government stops artificially supporting them and giving the present owners hope for a taxpayer-funded rescue from their self-created nightmare. The decision to buy distressed assets should be an individual one, not a collective decision made by the government on my behalf.

[Midpack]

Gumby, I am not in a place I can research this now, but I will try this evening. CRA is indeed what I was referring to with my Carter reference, and you will note I said it was originally a "paper tiger." During the Clinton administration it was given some teeth that indeed started the subprime mess. Where CRA only required that lenders try to qualify a lower rung of the economic strata while upholding loan qualification standards, the changes during the Clinton admin (not saying him personally BTW) forced lenders to relax their qualifications and make loans they would not have before. Accounting issues at Fannie and Freddie also made them lose their big influence on qualifications and independent brokers got carried away. Politicians had a lot to do with this and missed several opportunities to slow it down (Fannie in 2005). Wall St made capital available but worse, they leveraged the bejebbers out of basically unsound loans. And I too can't excuse buyers who took out 100% mortgages, or those whose monthly mortgage payments vs real income defied any basic rule of thumb on how much house they could realistically afford. You can't pin this on Wall St alone IMO. Again, I'll try to research further this evening..

[dex]

I'll be interested in what others find out about red lining. I thought it started int the 60s.
My historical thoughts on red lining were that it is a bad practice as it was based upon race.

Conceptually, I can see it being a good investment strategy and is used all around us.
We do not invest our personal money in a good company in an industry we believe is going to decline because the good will go down with the bad and there are other less risky places to put our money.
Companies do not invest in new plants in countries that are politically unstable when it can be build in a stable country.

The Clinton "teeth" Midpack is referring to, might shed some light on the issue.

A couple of aspects I find interesting is how the FDR administration might be looked at as the genesis of our current problems:
1. Established Fannymae - created secondary mortgage market
2. Allowed and promoted 30 year mortgages - started personal debt psychology.
3. Established red lining - led to the decline of the inner cities; hurt minorities - can't buy, must rent, no wealth building.

Redlining - Wikipedia, the free encyclopedia
Although in the United States informal discrimination and segregation have always existed, the practice called "redlining" began with the National Housing Act of 1934, which established the Federal Housing Administration (FHA)
++++++
In 1935, the Federal Home Loan Bank Board (FHLBB) asked Home Owners' Loan Corporation (HOLC) to look at 239 cities and create "residential security maps" to indicate the level of security for real-estate investments in each surveyed city. Such maps defined many minority neighborhoods in cities as ineligible to receive financing.

[FinanceDude]

Good post, I have one point to add. How is it that the folks who AGREED to buy a $500,000 home on a $40,000 a year income get a TOTAL PASS? I always thought entering into a contract as an adult involved some form of caveat emptor (buyer beware). Why not a $200,000 home or $300,000 home? Other than Souther California and some other zip codes, you can find an affordable home. Not ONE of these borrowers thought to ask "what happens if"

[ChrisC]

Quote:

Originally Posted by FinanceDude Good post, I have one point to add. How is it that the folks who AGREED to buy a $500,000 home on a $40,000 a year income get a TOTAL PASS? I always thought entering into a contract as an adult involved some form of caveat emptor (buyer beware). Why not a $200,000 home or $300,000 home? Other than Souther California and some other zip codes, you can find an affordable home. Not ONE of these borrowers thought to ask "what happens if"

There are many stories in the naked city. Here's another one: http://www.nytimes.com/2009/03/08/ny...0Bancorp%20Inc.