Linda, the answer to your below question.

Why are all those people----------------------------------------> say they are so scared of Palin?

Because she didn't have an abortion?  LOL

I'm so fed up with all the  that's it's nauseating!  And it's going to get worse!

Greta will be interviewing Billy Boy Clinton tonight.  I'll make darn sure I don't watch it.

Shirley

Summer, I did not see the interview...I was dancing! What positive light are you referring to?

Thanks....

• OPINION Wall Street Journal
• SEPTEMBER 23, 2008

Blame Fannie Mae and Congress
For the Credit Mess

By CHARLES W. CALOMIRIS and PETER J. WALLISON

Many monumental errors and misjudgments contributed to the acute financial turmoil in which we now find ourselves. Nevertheless, the vast accumulation of toxic mortgage debt that poisoned the global financial system was driven by the aggressive buying of subprime and Alt-A mortgages, and mortgage-backed securities, by Fannie Mae and Freddie Mac. The poor choices of these two government-sponsored enterprises (GSEs) -- and their sponsors in Washington -- are largely to blame for our current mess.

How did we get here? Let's review: In order to curry congressional support after their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of "affordable housing." They became the largest buyers of subprime and Alt-A mortgages between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. In doing so, they stimulated the growth of the subpar mortgage market and substantially magnified the costs of its collapse.

It is important to understand that, as GSEs, Fannie and Freddie were viewed in the capital markets as government-backed buyers (a belief that has now been reduced to fact). Thus they were able to borrow as much as they wanted for the purpose of buying mortgages and mortgage-backed securities. Their buying patterns and interests were followed closely in the markets. If Fannie and Freddie wanted subprime or Alt-A loans, the mortgage markets would produce them. By late 2004, Fannie and Freddie very much wanted subprime and Alt-A loans. Their accounting had just been revealed as fraudulent, and they were under pressure from Congress to demonstrate that they deserved their considerable privileges. Among other problems, economists at the Federal Reserve and Congressional Budget Office had begun to study them in detail, and found that -- despite their subsidized borrowing rates -- they did not significantly reduce mortgage interest rates. In the wake of Freddie's 2003 accounting scandal, Fed Chairman Alan Greenspan became a powerful opponent, and began to call for stricter regulation of the GSEs and limitations on the growth of their highly profitable, but risky, retained portfolios.

If they were not making mortgages cheaper and were creating risks for the taxpayers and the economy, what value were they providing? The answer was their affordable-housing mission. So it was that, beginning in 2004, their portfolios of subprime and Alt-A loans and securities began to grow. Subprime and Alt-A originations in the U.S. rose from less than 8% of all mortgages in 2003 to over 20% in 2006. During this period the quality of subprime loans also declined, going from fixed rate, long-term amortizing loans to loans with low down payments and low (but adjustable) initial rates, indicating that originators were scraping the bottom of the barrel to find product for buyers like the GSEs.

The strategy of presenting themselves to Congress as the champions of affordable housing appears to have worked. Fannie and Freddie retained the support of many in Congress, particularly Democrats, and they were allowed to continue unrestrained. Rep. Barney Frank (D., Mass), for example, now the chair of the House Financial Services Committee, openly described the "arrangement" with the GSEs at a committee hearing on GSE reform in 2003: "Fannie Mae and Freddie Mac have played a very useful role in helping to make housing more affordable . . . a mission that this Congress has given them in return for some of the arrangements which are of some benefit to them to focus on affordable housing." The hint to Fannie and Freddie was obvious: Concentrate on affordable housing and, despite your problems, your congressional support is secure.

In light of the collapse of Fannie and Freddie, both John McCain and Barack Obama now criticize the risk-tolerant regulatory regime that produced the current crisis. But Sen. McCain's criticisms are at least credible, since he has been pointing to systemic risks in the mortgage market and trying to do something about them for years. In contrast, Sen. Obama's conversion as a financial reformer marks a reversal from his actions in previous years, when he did nothing to disturb the status quo. The first head of Mr. Obama's vice-presidential search committee, Jim Johnson, a former chairman of Fannie Mae, was the one who announced Fannie's original affordable-housing program in 1991 -- just as Congress was taking up the first GSE regulatory legislation.

In 2005, the Senate Banking Committee, then under Republican control, adopted a strong reform bill, introduced by Republican Sens. Elizabeth Dole, John Sununu and Chuck Hagel, and supported by then chairman Richard Shelby. The bill prohibited the GSEs from holding portfolios, and gave their regulator prudential authority (such as setting capital requirements) roughly equivalent to a bank regulator. In light of the current financial crisis, this bill was probably the most important piece of financial regulation before Congress in 2005 and 2006. All the Republicans on the Committee supported the bill, and all the Democrats voted against it. Mr. McCain endorsed the legislation in a speech on the Senate floor. Mr. Obama, like all other Democrats, remained silent.

Now the Democrats are blaming the financial crisis on "deregulation." This is a canard. There has indeed been deregulation in our economy -- in long-distance telephone rates, airline fares, securities brokerage and trucking, to name just a few -- and this has produced much innovation and lower consumer prices. But the primary "deregulation" in the financial world in the last 30 years permitted banks to diversify their risks geographically and across different products, which is one of the things that has kept banks relatively stable in this storm.

As a result, U.S. commercial banks have been able to attract more than $100 billion of new capital in the past year to replace most of their subprime-related write-downs. Deregulation of branching restrictions and limitations on bank product offerings also made possible bank acquisition of Bear Stearns and Merrill Lynch, saving billions in likely resolution costs for taxpayers.

If the Democrats had let the 2005 legislation come to a vote, the huge growth in the subprime and Alt-A loan portfolios of Fannie and Freddie could not have occurred, and the scale of the financial meltdown would have been substantially less. The same politicians who today decry the lack of intervention to stop excess risk taking in 2005-2006 were the ones who blocked the only legislative effort that could have stopped it.

Mr. Calomiris is a professor of finance and economics at Columbia Business School and a scholar at the American Enterprise Institute. Mr. Wallison, a senior fellow at the American Enterprise Institute, was general counsel of the Treasury Department in the Reagan administration.

Education reform under Obama:

Wall Street Journal - September 23, 2008

Obama and Ayers
Pushed Radicalism
On Schools

By STANLEY KURTZ

Despite having authored two autobiographies, Barack Obama has never written about his most important executive experience. From 1995 to 1999, he led an education foundation called the Chicago Annenberg Challenge (CAC), and remained on the board until 2001. The group poured more than $100 million into the hands of community organizers and radical education activists.

AP

Bill Ayers.

The CAC was the brainchild of Bill Ayers, a founder of the Weather Underground in the 1960s. Among other feats, Mr. Ayers and his cohorts bombed the Pentagon, and he has never expressed regret for his actions. Barack Obama's first run for the Illinois State Senate was launched at a 1995 gathering at Mr. Ayers's home.

The Obama campaign has struggled to downplay that association. Last April, Sen. Obama dismissed Mr. Ayers as just "a guy who lives in my neighborhood," and "not somebody who I exchange ideas with on a regular basis." Yet documents in the CAC archives make clear that Mr. Ayers and Mr. Obama were partners in the CAC. Those archives are housed in the Richard J. Daley Library at the University of Illinois at Chicago and I've recently spent days looking through them.

The Chicago Annenberg Challenge was created ostensibly to improve Chicago's public schools. The funding came from a national education initiative by Ambassador Walter Annenberg. In early 1995, Mr. Obama was appointed the first chairman of the board, which handled fiscal matters. Mr. Ayers co-chaired the foundation's other key body, the "Collaborative," which shaped education policy.

The CAC's basic functioning has long been known, because its annual reports, evaluations and some board minutes were public. But the Daley archive contains additional board minutes, the Collaborative minutes, and documentation on the groups that CAC funded and rejected. The Daley archives show that Mr. Obama and Mr. Ayers worked as a team to advance the CAC agenda.

One unsettled question is how Mr. Obama, a former community organizer fresh out of law school, could vault to the top of a new foundation? In response to my questions, the Obama campaign issued a statement saying that Mr. Ayers had nothing to do with Obama's "recruitment" to the board. The statement says Deborah Leff and Patricia Albjerg Graham (presidents of other foundations) recruited him. Yet the archives show that, along with Ms. Leff and Ms. Graham, Mr. Ayers was one of a working group of five who assembled the initial board in 1994. Mr. Ayers founded CAC and was its guiding spirit. No one would have been appointed the CAC chairman without his approval.

The CAC's agenda flowed from Mr. Ayers's educational philosophy, which called for infusing students and their parents with a radical political commitment, and which downplayed achievement tests in favor of activism. In the mid-1960s, Mr. Ayers taught at a radical alternative school, and served as a community organizer in Cleveland's ghetto.

In works like "City Kids, City Teachers" and "Teaching the Personal and the Political," Mr. Ayers wrote that teachers should be community organizers dedicated to provoking resistance to American racism and oppression. His preferred alternative? "I'm a radical, Leftist, small 'c' communist," Mr. Ayers said in an interview in Ron Chepesiuk's, "Sixties Radicals," at about the same time Mr. Ayers was forming CAC.

CAC translated Mr. Ayers's radicalism into practice. Instead of funding schools directly, it required schools to affiliate with "external partners," which actually got the money. Proposals from groups focused on math/science achievement were turned down. Instead CAC disbursed money through various far-left community organizers, such as the Association of Community Organizations for Reform Now (or Acorn).

Mr. Obama once conducted "leadership training" seminars with Acorn, and Acorn members also served as volunteers in Mr. Obama's early campaigns. External partners like the South Shore African Village Collaborative and the Dual Language Exchange focused more on political consciousness, Afrocentricity and bilingualism than traditional education. CAC's in-house evaluators comprehensively studied the effects of its grants on the test scores of Chicago public-school students. They found no evidence of educational improvement.

CAC also funded programs designed to promote "leadership" among parents. Ostensibly this was to enable parents to advocate on behalf of their children's education. In practice, it meant funding Mr. Obama's alma mater, the Developing Communities Project, to recruit parents to its overall political agenda. CAC records show that board member Arnold Weber was concerned that parents "organized" by community groups might be viewed by school principals "as a political threat." Mr. Obama arranged meetings with the Collaborative to smooth out Mr. Weber's objections.

The Daley documents show that Mr. Ayers sat as an ex-officio member of the board Mr. Obama chaired through CAC's first year. He also served on the board's governance committee with Mr. Obama, and worked with him to craft CAC bylaws. Mr. Ayers made presentations to board meetings chaired by Mr. Obama. Mr. Ayers spoke for the Collaborative before the board. Likewise, Mr. Obama periodically spoke for the board at meetings of the Collaborative.

The Obama campaign notes that Mr. Ayers attended only six board meetings, and stresses that the Collaborative lost its "operational role" at CAC after the first year. Yet the Collaborative was demoted to a strictly advisory role largely because of ethical concerns, since the projects of Collaborative members were receiving grants. CAC's own evaluators noted that project accountability was hampered by the board's reluctance to break away from grant decisions made in 1995. So even after Mr. Ayers's formal sway declined, the board largely adhered to the grant program he had put in place.

Mr. Ayers's defenders claim that he has redeemed himself with public-spirited education work. That claim is hard to swallow if you understand that he views his education work as an effort to stoke resistance to an oppressive American system. He likes to stress that he learned of his first teaching job while in jail for a draft-board sit-in. For Mr. Ayers, teaching and his 1960s radicalism are two sides of the same coin.

Mr. Ayers is the founder of the "small schools" movement (heavily funded by CAC), in which individual schools built around specific political themes push students to "confront issues of inequity, war, and violence." He believes teacher education programs should serve as "sites of resistance" to an oppressive system. (His teacher-training programs were also CAC funded.) The point, says Mr. Ayers in his "Teaching Toward Freedom," is to "teach against oppression," against America's history of evil and racism, thereby forcing social transformation.

The Obama campaign has cried foul when Bill Ayers comes up, claiming "guilt by association." Yet the issue here isn't guilt by association; it's guilt by participation. As CAC chairman, Mr. Obama was lending moral and financial support to Mr. Ayers and his radical circle. That is a story even if Mr. Ayers had never planted a single bomb 40 years ago.

Mr. Kurtz is a senior fellow at the Ethics and Public Policy Center.

According to Wikipedia the schools that were funded did no better than schools that were not funded. Education reform like this we don't need!

Linda Memm--I appreciate all of your comments.  Other than my own, I find the motivation of other people is often very difficult to discern....especially politicians such as Obama and McCain.   I really don't believe that either one of them have ill intentions...but their philosophy and policy statements regarding the distribution of wealth I find is far apart and mine lean more to the left.  I favored consultants who approached valid win win resolutions.

I'd bet that your husband would also agree that the some corporations see you only as "what did you do for me today" and "it's never enough". I flourished in spite of this because, for the most part, I worked in a creative environment and was encouraged by my "boss" to learn and grow.  I was not a "yes person" and for that I thought so often I'd be fired for positions that I took (I was never a politician).  This too surprised me to learn that they respected and trusted me for just that. 

Like you I worked hard in life to earn a living and education.  Over that time I was part of a good family, laughed a lot, and was fortunate to meet many really good people and teachers especially my husband.  So my time in American isn't/wasn't bad--the experience I recounted above did not rank in my top 10 fondest of memories to be sure. 

Experts from everywhere are expressing their frustration over the economic crisis--I'm not sure anyone really wants to know how we got here or how we'll come out of it.  When I listen to the politicians they are all slanting to their advantage without exception. I'll be the first to admit that I listen to them through my own filters and make decisions based on my life's experiences.  I'm 60 y.o. (in November) and I want an America for my family that is nurturing and protective....touchy feely as that sounds.

Several years ago when the dollar lost value, there was only one "unknown expert" from Japan that "called it".  So much for experts.  And as I listen to the financial reports over the last couple of years, they seemed content to ignore fundatmentals in the discussions...chat centered around  how high, how much, how big. Now it's bubble after bubble.

You're right too about the rich Europeans and Swiss bank accounts.  When the Euro came to Italy there was an offer of "amnesty" for people to return their lires to the Italian banks....I'm sure similar circumstances were true everywhere.  Look to the Carribean from the shores of the US for sheltered accounts.  Hell, even Putin has a few billion in the Swiss accounts.  I've never been that rich so I can't say.  

Yes, someone pays taxes to support their healthcare in socialized countries.  My husband paid his fair share as did I.   Spend much less on military budget....outsourced that to the US (our bases are everywhere).  And that's another topic.  The socialized system is fraught with similar problems of graft, greed, extortion.....and full of decent people too who give a damn.....just like US.  In fact, the health system in the US has always been a mix of socialism/capitalism.  The systems in Europe are moving on the scale more toward the right.  It's always about the scale.  

Suzfive--A really interesting article.  The educational system in any country will ever be in need of help.  Mr. Annenberg was a very generous and caring person and his money was not used without his observation of the process or the results.  He was a donor to many hospitals.  The Gates Foundation is trying too...unconventional methods sometimes have impacts without measure...positive and negative.  I'm not familiar with the Center or author of the article...I googled. I wonder what Mr. Annenberg would have said.

I think its a good move--Congress is about to adjourn---Country first...... This debate is on foreign policy McCains strongsuite--- Postponing it a few days is not the end of the world but Congress adjourning without coming up with a plan would be bad news.......

Right now a reporter and asked if McCain is playing politics with this.  Obama is now telling them how he called McCain first...etc. 

I'll miss the debates..DOGGONE IT!

Shirley

Okay, Obama's not going to stop campaigning as I understand.  He'll be available any time..at any point..he's talking to Pelosi, Reid, et al.  Presidents are going to have to deal with more than one thing at a time...don't need to suspend something else.  Oh, geez!  I've GOT to stop listening!

Obama, just go to Washington.  Geez!

They are already critizing it as if he is doing it just for politics. Obama wants to go on with the debate. Trying to say that McCain did nothing a year ago when he (Obama) introduced legislation to reign in CEO salaries. Does he really believe we are in this mess just because of CEO salaries? What about when McCain warned two years ago about this happening? Where was Obama? I am glad the FBI is investigating all of these companies. I really don't think the government should be in the business of bailing out businesses that do stupid things. We got in this mess because people were given mortgages they could not afford. I would like to live in a bigger house but I know I can't afford it so my little house is just fine with me. I used to get checks in the mail for $25,000 from credit card companies - all I had to do was sign on the line and deposit it in the bank and the money was mine. I ripped them up because I knew that I would have to pay that money back. When housing prices were going up I knew it could not last forever - no one would be able to afford to buy a home (or so I thought - didn't realize mortgages were being given to people who could not pay for them). I think the execs of these companies have a lot of money and they should have to pay for what they did - sell all their assets.

Look at all the Debate-"Parties" scheduled by mybarackobama people that would have to be rescheduled..........

http://michellemalkin.com/2008/09/23/michelle-obama-thanks-me/

Well, Linda, I called my brother right after giving a play by play (on this thread) of what Obama was saying on TV.  I called my dear brother and said, OH, MY GOSH!!!  He said, WHAT?  I said haven't you been watching Fox or CNN.  He said he had, but had to turn it off.  His was getting so angry...like the rest of us...and thought his bp was going up.  We laughed a bit, and I told him to get a glass of wine..(not WHINE)..LOL  We both thought that this was a bad move on McCain's part because it looked political.  The man can't win for losing.  He's criticized by the press every which way you look.  Harry Reid said something about McCain regarding him not being there (a negative comment..don't have the energy to look it up right now), and when McCain said he was headed for DC Reid, as I understand, said they didn't need him.  So, WTH is the man supposed to do?

If purrty talking boy (oh, I can't say that...changed it to "guy") becomes prez I'm gonna be so sick.  And the dems have sat on their arses doing nothing about this crap and all the blame falls on Bush and repubs.  Well, the repubs aren't so quick to bail out these institutions.  I kinda liked what Newt had to say about it.  He's absolutely not in favor of bailing them out.  If ya'll don't hear from me I'll be out shopping for a very big card board box with good insulation for the winter.  Heck, I don't need to do that.  Dh just had our attic sprayed and underneath the house..new insulation to the tune of $1900...LIKE WE'RE RICH!  I can remove the stuff underneath the house for my big cardboard box. 

Well, I've certainly rambled on enough without furnishing any intelligent conversation to OUR thread.  That's what you guys are for.  LOL

I need to go to bed.  I hope I don't have a nightmare tonight. 

Shirley

Republicans are the problem with the vote, not the democrats.  Bush is referred to as a lame duck because his party is not behind him.  Bush will be able to leave in a few months and if this plan backfires, he won't have to return to his home town and try to explain it to his constituents.  McCain and Palin seem to be avoiding questions, could it be that they are dropping in the polls and do not want to add to it?  Their answers are diffuse and talking points, McCain can't really speak without his notes.  Let's hope that McCain does feel as bad as he looks as he looks tattered.  His airplane can get him from D.C. to Mississippi for a 1-1/2 hour debate without a blink - so avoiding the media is clearly what he is doing.  Palin - his bible belt magnet - and Biden debate next - that should be interesting ::rolls eyes::