[Herbert Hoover[_3_]]

Despite the heading "John Stewart....." this piece was written by Mark
Thoma, a distinguished economist and his own man when it comes to
discussing these issues. I hesitate to call him "centrist" since he
can be both right or left and sometimes both simultaneously.

I've copied the text, but the URL contains both a video of Stewart and
Sununu, but also an illustrative and elucidating chart. I actually
don't think this bears much more discussion. This is accepted wisdom
in financial circles.

Congress, of course, is another story.

See you all at the barricades..........







http://economistsview.typepad.com/ec...hn-sununu.html





John Stewart Explains Economics to John Sununu

Sununu's talking point - that the crisis was the government's fault,
and in particular the role played by Fannie and Freddie - has been
thoroughly debunked:

Supply Curves Slope Up. Demand Curves Slope Down, by Brad DeLong:
There is one huge argument against the claim that the crash in the
mortgage market was in some sense the fault of excessively risky
lending by the GSEs Fannie Mae and Freddie Mac which pulled the
private sector along behind them: it is that Fannie Mae and Freddie
Mac lost market share as all the loans that have now gone bad were
made.

http://img.skitch.com/20081218-8b4mq...5yfkx3de9s.jpg

As Milton Friedman always used to say: supply curves slope up, and
demand curves slope down. If something is due to a change in supply
that causes movement along the demand curve, price will go down and
quantity will go up. If something is due to a change in demand that
causes movement along a supply curve, price will go down and quantity
will go down.

Between 2001 and 2006 the "price" at which Fannie Mae and Freddie Mac
sold mortgages--the terms they set--certainly went down. But did the
quantity go up? No: Fannie Mae and Freddie Mac together had made a
much smaller share of mortgages in 2006 than in 2001: 37% as opposed
to 48%. Price went down, and quantity went down.

This means that the dominant feature of the mortgage market in the
2000s was not an expansion of supply by Fannie Mae and Freddie Mac
pushing their implicit government guarantee past the limits of
prudence, but was a reduction in demand for Fannie Mae and Freddie
Mac's products as private-sector mortgage lenders aggressively pursued
and took away their markets.

At least, this is the dominant feature if you follow Milton Friedman
and believe that typically supply curves slope up and demand curves
slope down.

Or, see this from an entry he It Wasn't Fannie and Freddie.

One last note. It's pretty sad that John Stewart clearly has a better
understanding of economics - much better - than a former senator who
has been a member of the Committee on Finance and the Joint Economic
Committee. No wonder the Republicans screwed the economy up so much -
they can recite the ideological talking points that "tax cuts make it
better, government makes it worse," but most of them don't seem to
have a clue what makes the economy tick.


Economist's View 02/20/09 Mark Thoma Economics Financial System
Regulation Video Comments

[MiNe 109]

In article
,
ScottW2 wrote:

Or, see this from an entry he It Wasn't Fannie and Freddie.

Stats never tell the whole story.

Especially when they counter your point of view.

Stephen

[Shhhh! I'm Listening to Reason!]

On Feb 22, 11:09*am, ScottW2 wrote:

BTW, there is nothing more cowardly than your "final word" last post.
It's a taunt and run-away.

What a dilemma you create, 2pid. As I've shown...again, we do not need
any more F-22s. Your argument (to those capable of thought, i.e.
"smart people") in that regard is in tatters.

But you will not see it that way. Your 'differing POV' remains as
valid to you as it was before I went to all of the trouble of pulling
up cites...again. LoL.

Yet you yap and bark and whine when I call you an imbecile. But if I
said, "Here's my final word, 2pid. You're a waste of air" and stopped
posting you'd call me a coward.

Not everybody will assist you in chasing your tail. Me? I'm back to
shorthand:

Imbecile. LoL.

[Shhhh! I'm Listening to Reason!]

On Feb 22, 3:46*pm, wrote:

Just what is it you're bringing to this discussion that merits equal
consideration? No studies. No documentation. No statistical
refutation. You've made a number of claims and stated them as
grounding assumptions, but why should anyone accept that as a good
response?

Translated: 2pid are a imbecile.

[George M. Middius[_4_]]

Shhhh! said:

Just what is it you're bringing to this discussion that merits equal
consideration? No studies. No documentation. No statistical
refutation. You've made a number of claims and stated them as
grounding assumptions, but why should anyone accept that as a good
response?

Translated: 2pid are a imbecile.

Somebody should tell our apologetic would-be dog trainer that all previous
methods of getting Scottie to heel have been unsuccessful.

[Shhhh! I'm Listening to Reason!]

On Feb 22, 4:29*pm, George M. Middius
wrote:
Shhhh! said:

Just what is it you're bringing to this discussion that merits equal
consideration? No studies. No documentation. No statistical
refutation. You've made a number of claims and stated them as
grounding assumptions, but why should anyone accept that as a good
response?

Translated: 2pid are a imbecile.

Somebody should tell our apologetic would-be dog trainer that all previous
methods of getting Scottie to heel have been unsuccessful.

But he did bring up far more interesting points than 2pid did, so cut
him some slack.

I even bitch-slapped 2pid...again today. I fully understand the
futility of it. I expect 2pid to come back with "Yes, but we still
need more F-22s".