OT: Oh Pocahontas
Papi_Chulo
Miami, FL (or the nearest big-booty club)
Elizabeth Warren's plan to fund universal child care with 'millionaire tax' hints at growing divide among 2020 Democrats
Democratic presidential candidate and Massachusetts Sen. Elizabeth Warren on Tuesday unveiled a sweeping new proposal for universal child care aimed at providing licensed early childhood care for every family in the country at a cost of no more than 7 percent of that family's income.
For families making up to 200 percent of the federal poverty level, under Warren's plan, child care would be free.
Within the crowded 2020 Democratic primary field, Warren's ambitious proposal is likely to elevate the issue of child care beyond its relatively limited reach four years ago. In 2016, both Hillary Clinton and Bernie Sanders had major child care expansion plans built into their policy platforms. But neither candidate invested real political capital into promoting their respective plans, and voters took little notice of them.
Warren's plan could also deepen already emerging policy fault lines among among more liberal Democratic 2020 candidates, like her, and her more moderate opponents.
According to Warren, her child care plan rests upon four policy pillars:
1. The federal government will partner with local providers — states, cities, school districts, nonprofits, tribes, faith-based organizations — to create a network of child care options that would be available to every family.
2. These options would include locally-licensed child care centers, preschool centers, and in-home child care options.
3. Local communities would be in charge, but providers would be held to high national standards to make sure that no matter where you live, your child will have access to quality care and early learning.
4. Child care and preschool workers will be doing the educational work that teachers do, so they will be paid like comparable public school teachers.
"In the wealthiest country on the planet, access to affordable and high-quality child care and early education should be a right, not a privilege reserved for the rich," Warren wrote in a blog post on medium.com Tuesday announcing the proposal.
Warren's plan is projected to cost around $700 billion over 10 years, money which she said would come entirely from the proceeds of her proposed "ultra-millionaire tax."
"The Ultra-Millionaire Tax asks the wealthiest families in America — those with a net worth of more than $50 million — to pay a small annual tax on their wealth," Warren wrote. According to a research paper Warren cited, by two economists at the University of California, the fully implemented millionaire's tax could raise as much as $2.75 trillion in government revenue over the next decade.
Contrasts with other Democrats
Warren's plan presents a stark contrast with policy preferences laid out by 2020 Democratic candidates who have staked out more pragmatic territory, like Minnesota Sen. Amy Klobuchar.
Appearing on a CNN town hall Monday night, Klobuchar took the rare step of rejecting several of the Democratic party's more ambitious universal benefits proposals, including universal free four-year college tuition, and a Medicare-for-all type universal healthcare program.
"No. I am not for free four-year college for all," Klobuchar said during the broadcast, catching many in the audience by surprise. "If I was a magic genie and could afford to give that to everyone, I would," she added, before explaining several steps she would take to make college easier to afford.
Klobuchar, who announced her White House run last week, has not yet weighed in on Warren's "ultra-millionaire's tax," but already, the former Minnesota federal prosecutor appears to favor a more practical approach to governing than some of her fellow 2020 Democrats.
Klobuchar did, however, sign on as a sponsor of the 2017 Child Care for Working Families Act, a bill introduced by Democratic Sen. Patty Murray, Wash., and Rep. Bobby Scott, Va. that also seeks to make child care affordable for every working family, but through different means than Warren's bill.
Earlier this month, Klobuchar was one of only three Democratic presidential hopefuls in the Senate who voted in favor of a government spending bill that avoided a government shutdown and included more than a billion dollars in restricted funds that President Donald Trump plans to use to build a border wall between the U.S. and Mexico.
Ohio Sen. Sherrod Brown and Vermont Sen. Bernie Sanders also voted for the spending bill, while four other 2020 contenders in the upper chamber, Sens. Warren, Cory Booker, N.J., Kamala Harris, Calif., and Kirsten Gillibrand, N.Y. all opposed it.
https://www.cnbc.com/2019/02/19/elizabet…
Democratic presidential candidate and Massachusetts Sen. Elizabeth Warren on Tuesday unveiled a sweeping new proposal for universal child care aimed at providing licensed early childhood care for every family in the country at a cost of no more than 7 percent of that family's income.
For families making up to 200 percent of the federal poverty level, under Warren's plan, child care would be free.
Within the crowded 2020 Democratic primary field, Warren's ambitious proposal is likely to elevate the issue of child care beyond its relatively limited reach four years ago. In 2016, both Hillary Clinton and Bernie Sanders had major child care expansion plans built into their policy platforms. But neither candidate invested real political capital into promoting their respective plans, and voters took little notice of them.
Warren's plan could also deepen already emerging policy fault lines among among more liberal Democratic 2020 candidates, like her, and her more moderate opponents.
According to Warren, her child care plan rests upon four policy pillars:
1. The federal government will partner with local providers — states, cities, school districts, nonprofits, tribes, faith-based organizations — to create a network of child care options that would be available to every family.
2. These options would include locally-licensed child care centers, preschool centers, and in-home child care options.
3. Local communities would be in charge, but providers would be held to high national standards to make sure that no matter where you live, your child will have access to quality care and early learning.
4. Child care and preschool workers will be doing the educational work that teachers do, so they will be paid like comparable public school teachers.
"In the wealthiest country on the planet, access to affordable and high-quality child care and early education should be a right, not a privilege reserved for the rich," Warren wrote in a blog post on medium.com Tuesday announcing the proposal.
Warren's plan is projected to cost around $700 billion over 10 years, money which she said would come entirely from the proceeds of her proposed "ultra-millionaire tax."
"The Ultra-Millionaire Tax asks the wealthiest families in America — those with a net worth of more than $50 million — to pay a small annual tax on their wealth," Warren wrote. According to a research paper Warren cited, by two economists at the University of California, the fully implemented millionaire's tax could raise as much as $2.75 trillion in government revenue over the next decade.
Contrasts with other Democrats
Warren's plan presents a stark contrast with policy preferences laid out by 2020 Democratic candidates who have staked out more pragmatic territory, like Minnesota Sen. Amy Klobuchar.
Appearing on a CNN town hall Monday night, Klobuchar took the rare step of rejecting several of the Democratic party's more ambitious universal benefits proposals, including universal free four-year college tuition, and a Medicare-for-all type universal healthcare program.
"No. I am not for free four-year college for all," Klobuchar said during the broadcast, catching many in the audience by surprise. "If I was a magic genie and could afford to give that to everyone, I would," she added, before explaining several steps she would take to make college easier to afford.
Klobuchar, who announced her White House run last week, has not yet weighed in on Warren's "ultra-millionaire's tax," but already, the former Minnesota federal prosecutor appears to favor a more practical approach to governing than some of her fellow 2020 Democrats.
Klobuchar did, however, sign on as a sponsor of the 2017 Child Care for Working Families Act, a bill introduced by Democratic Sen. Patty Murray, Wash., and Rep. Bobby Scott, Va. that also seeks to make child care affordable for every working family, but through different means than Warren's bill.
Earlier this month, Klobuchar was one of only three Democratic presidential hopefuls in the Senate who voted in favor of a government spending bill that avoided a government shutdown and included more than a billion dollars in restricted funds that President Donald Trump plans to use to build a border wall between the U.S. and Mexico.
Ohio Sen. Sherrod Brown and Vermont Sen. Bernie Sanders also voted for the spending bill, while four other 2020 contenders in the upper chamber, Sens. Warren, Cory Booker, N.J., Kamala Harris, Calif., and Kirsten Gillibrand, N.Y. all opposed it.
https://www.cnbc.com/2019/02/19/elizabet…
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77 comments
Maybe the neonazis would like to curb the need for childcare by reinstalling child labor.
But also, the US Congress passed a bill providing Universal Free Child Care.
If you want more jobs to be available you do use public funds for such things.
It also means that children will be getting better care. A most wise public investment.
But Richard Nixon vetoed it, saying, "I would Sovietize the American Family".
SJG
https://i.dailymail.co.uk/i/pix/2014/11/…
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She used to be tenured law professor at Harvard. How about you? Harvard went on record that her appointment had nothing to do with the N. American horseshit.
@Warrior: "Isn't just great the way they keep coming up with ways to spend other people's money ???"
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May turn out to be unconstitutional -- but this is a wealth tax of 2% starting on fortunes over $50B. So probably wouldn't cost you anything, would it @Warrior? The wealth tax of 2% sounds a lot "less" than a marginal income tax that tops out at 70%. But the wealth tax would be far more disruptive to the status quo. Worth thinking about so that we don't turn into a plutocracy based on inherited wealth.
What I really like about Warren is that she understands the cause of the financial crisis of 2008 and she has the intelligence put some teeth into financial regulation so that it doesn't happen again. Wall Street despises Warren -- and that's a good thing. I might vote for her if I thought she could win. But she doesn't have chance.
And no, Warren does not have a fucking clue as to what caused that recession. I was on Wall Street at the time and she got completely in the way of what needed to be done. Warren is a complete Moron. Just like you. But maybe that is why you like her.
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No, the wealth tax was studied at length by two UC Berkeley economists, one of which who has won the Bates prize and probably will win the Nobel.
Your post doesn't have a single detail about the recession. But like like all the other clueless wonders, I'll assume you blame government lending to the poor. Fucktard.
BTW the only bates prize you're well versed in is masturbates, dipshit!
" but this is a wealth tax of 2% starting on fortunes over $50B. So probably wouldn't cost you anything, would it @Warrior?"
First, yes I saw the correction to $50M
Have you no principles? There are many reasons not to like this proposal, but your rationalization for it is fucking ridiculous. Said another way...
"It's fine with me if the government steals from people, I'll even celebrate it so long as they don't steal from me."
WTF.
There is not going to be a Republican primary challenger. Trump is just too popular among registered Republicans right now. Also, the Party knows, through ample historical lessons, that putting forth a primary challenger against a sitting President is equivalent to giving up the Presidency. Nope, Trump is going to be free to bait the Dem candidates for months and pick them off one by one, especially the centrists that might actually pose a serious challenge. ;)
On the flip side, the Dem brawl is going to be a sight to behold. It's going to be a circus act, especially now that the Dems have eliminated the shameful Super-delegate system. With NYC and CA whackjob extremists now exerting so much influence over the primary outcome, the question will be whether a centrist candidate can actually win a primary battle.
Does anyone actually believe there was collusion?
I think there have been 3 investigations looking into it and nothing yet after 2 years. What a fucking partisan waste of tax payer dollars.
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Your post was about as emotional and content-free as you can get @Warrior, and it would be interesting if you have any real grasp of the facts, yourself. Or maybe that was your job and you had something to do with packaging dogshit mortgages into bonds and CDOs during the crisis? Warren is hated, primarily, but she has the effrontery to state that Wall Street got us into a fucking mess that required taxpayers to put almost a trillion dollars on the line for bank bailouts, while financial executive walked away with 10s or 100s of millions of dollars. She's despised because she understands that Wall Street and banks need to be regulated.
"...it really has less to do about what you believe and more to do with what Muellar believes ..."
It really has nothing to do with what Mueller believes either, it's about what he can prove. It's these unfounded partisan "beliefs" that started the whole witch hunt.
;-)
And yeah fuck me Trumps a con man, but hey it’s ok right.
And all politician's are con men to some extent.
Noticing no treason or espionage charges? Where are the conspiracy charges, which is where collusion with a foreign government would fall?
If anything besides noise and hyperbole result from the report, assuming the damned thing ever gets issued, I will be surprised.
The financial crisis of 07/08 was a liquidity crisis, not a default crisis. TARP which was initially put in place by the Bush Administration was a stroke of genius. And it cost the federal government nothing. Actually, the government MADE money on the original TARP. Yes, every penny that went to the original banks was paid off with interest. And quite high interest. Jamie Dimon at JP Morgan estimated that they were charged an interest rate on the money they were given at around 18%. It all got paid back. Now there was TARP II put in by the Obama Administration. That money went to insurance companies, mortgage companies and smaller banks. That part of the program did cost the government money. Because it was given to institutions to cover their default obligations. That was stupid. But that's on Obama or his Treasury Secretary at the time.
The recession that started in the 4th quarter of 2008 was a different matter that just happened to occur as the TARP was being put into place. By August 2008, McCain had gotten the Republican nomination. Obama was the Democratic nominee. I was in Denver when the Dems had their convention there. My office looked at the hotel where Obama stayed during the Convention. You would have thought we was a Rock Star the way people wanted to see him. It was obvious by the beginning of September that Obama was going to be elected. The Republicans really didn't like McCain, Bush was being blamed for everything, and Sarah Palin was not helping things. So Obama with his agenda was coming. Every business owner looked at what was coming and said " I have to get ready " Hiring across all businesses immediately stopped. All businesses large and small, simply stopped hiring and got rid of any non-essential employees. And they all wanted to get it done before the end of 2008. Obama then wins and the recession deepens.
Now you may say that the Economy grew under Obama. Yes, it did. In 2010, the House and the Senate turned over to the Republicans. Business Owners then realized that Obama was not going to put any more anti-business legislation into work. Thus they had the confidence to start hiring again.
I know that does't fit your version of what you think happened. Oh and Miss American Indian. She was one of the people that insisted on TARP II .
The yield on a 30 year Treasury Bond is 2.99% today. So if Gates had all his money in a 30 year T bond just living off the interest like any retiree, He would receive 3 billion in interest, at a 40% federal rate he would pay 1.2 Billion in income taxes and 2 billion in wealth taxes and he gets nothing. He actually loses 200 million dollars guaranteed
Since you asked, most of my information on the financial crisis comes from four books by Andrew Ross sorkin, ALan Blinder, Micahel Lewis and Joe nocera. Also plenty of info on the crisis from Stigliz's book.
So that explains your goofy, emotional, response -- you played a role in mortgage securitization chain and profited from an event that nearly brought down the global financial system. Patting myself on the back for guessing correctly. While millions of Americans lost their job and their homes. No wonder you hate Liz Warren. The paragraph you wrote about the financial crisis and the recession being uncorrelated went through one ear and out the other; the fall of Lehman sent the entire system into panic and it took years of clever fiscal and monetary policy to recover.
I'm well aware that TARP money was paid back, but the $200M or so that went to Bear and AIG before TARP was not. And TARP represented partial government ownership of the banks. While you and others are bitching about socialism on the left, your industry accepted money from the taxpayers to the tune of $700B, and that's just from TARP. Lack of regulation allowed the fucking mess to start and smart government policy got us out. Another good reason for the wealth tax is to penalize those in finance who own about 40% of the wealth in the country.
I do give you credit for not blaming the Community Reinvestment Act and government lending to the poor, which I've heard from @WarrenBoy, @Che, @Burlington.
But Liz Warren is trying to win votes by casting this evil cloud on the financial system. Those things just are not true.
My guess is that Random got turned down for a loan and now he thinks all banks are evil.
Actually I bought a custom home in the suburbs , almost 9000 square ft , for half price in 2009. Nice try
I would not mind as much if the government was efficient like Amazon, but they are not even close and a shit ton of $$$ is often wasted and huge inefficient-bureaucracies created where large portions of the $$$ are used to maintain the bureaucracies and not actually do what they said - it often becomes a cycle of big-government leading to huge inefficiencies leading to more $$$ to make up for those inefficiencies.
The collapse was a combination of liquidity and defaults. The defaults and blow-up of those CMOs are what caused the liquidity issues that made some banks unable to meet their short-term obligations.
Public and private sector were both culpable. Yes shitty mortgage bonds should never have been packaged that way and then treated as sound investments. Also, mortgage underwriters should never have approved mortgage loans for many of those borrowers to begin with, especially not those ARMs that they should have known would blow up eventually. There were just too many pigs at the trough earning huge commissions down the line. But CRA regs also contributed to this, as too did the general trashing of credit standards supported and, in many cases, subsidized by Fannie Mae and Freddie Mac. Net-net government and investment bankers found their interests very much aligned and, at the time, there was nobody with the political juice to put the brakes on it.
I'll expand more on this later as I have to jump now...
I do give you credit for not blaming the Community Reinvestment Act and government lending to the poor, which I've heard from @WarrenBoy,
Did it contribute--yes. was it the sole cause? no and as I recall that is what I stated when you had a hiss fit.
As for Elizabeth Warren my comments about her aside from what has been written on her American Indian heritage and if she benefited from living a lie she has in my estimation no chance because finally someone was willing to call her out on her mock outrage and dodge and deflection tactics. You can go back to her first election against Scott Brown and he let her get away with her tactics.
Hate Trump till the end of time but he calls her out when she tries to slip slide out of her comments.
Normal part of an unregulated cycle. But 40 years with next to know busts, because the money which cases them is the money which causes the booms. It was collected up in progressive income tax.
These boom and bust cycles are destroying us. With each the rich get richer and the poor get Financial Literacy Lessons.
It is the proper function of government to regulate our economy.
SJG
@Dugan: "Public and private sector were both culpable."
________________
As I recall, you've changed your tune quite a bit, @Warrenboy. Less of a hissy fit than just asking you to get your facts straight. The private sector played a much larger role in the crash. This is from memory, but you can Google these points:
(1) During the explosive growth of the subprime market in 2006, 24 out of 25 subprime lenders were not subject to government lending criteria. These non-bank lenders had absolutely NOTHING to do with lending rules dictated by the government. These loans were sold to Wall Street, securitized, sometimes sliced again into CDOs, and sold off to pension fund managers and investors all over the world.
(2) During 2006 83% of subprime loans were made by non-bank lenders.
(3) Loans that went to shit during the crisis were in high-priced areas -- primarily suburbs of California, but also Florida, Arizona, Nevada. Not inner-city areas that would be the target of the CRA.
(4) The housing bust was world-wide. How could the CRA affect housing prices in Britain, Ireland, Spain?
(5) How could the CRA affect the commercial real-estate bubble, which occurred at the same time?
(6) The FCIC was a bi-partisan panel appointed to study the housing crash. Only 1 member out of 10 (Wallison) reached the conclusion that Fannie/Fredie was responsible for the crash. He's a member of some right-wing think-tank, and his work was quickly discredited (he made up his own definition of what is subprime). The whole notion that Fannie/Freddie caused the crash has been discredited.
I don't think I've read anywhere @Warrior's contention that the bank bailouts were separate and independent from the ensuing deep recession.
Yet during all that time, they kept issuing more of the crap because nobody wanted the party to stop. Not the investment bankers, who were making a killing off of CMO underwriting. Not the quasi government agencies that facilitated much of this, because it allowed Fannie Mae and Freddie Mac to expand their kingdoms while providing politicians' constituents with easy access to mortgages and rising home values. Not the banking regulators, also for fear of pissing of the politicians who didn't want an interruption in access to mortgages or rising home values. Not the ratings agencies, who were getting paid a fortune to attach investment grade ratings to these blended piles of dog manure. Nobody. There is enough blame to go around in spades.
Most of the movies that cover this topic are either tear jerker crap or designed to villainize Wall Street. The one really good exception to this is The Big Short. I'd strongly encourage anyone who wants a more complete picture of the crisis to spend two hours watching it.
The housing bubble grew to monstrous proportions because nearly everyone in the system did not get paid unless houses sell and loans are booked. Even those whose roles were to ostensibly gum up the works, such as appraisers and underwriters, succombed to pressure to ignore standards as let the deals fly.
Originally loans such as FHA and VA were vehicles for people with little down payment to be able to step into the market. The irony was that you did need a small 1% to 3% down payment for government insured lending.
That no-doc, alt-paper crap being originated during the height of the bubble did not need any down payment. Heck "cash back at close" based on an inflated appraisal was a common gambit... borrowers could also finance their move and some new furniture.
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You're not listening, as usual. The vast majority of subprime loans during the bubble years had absolutely nothing to do with the GSEs. There was an entire parallel mortgage securitization chain that went from non-bank lenders directly to Wall Street banks.
Typical TUSCL thread where nobody can agree on the facts and we talk through each other. This is why we have a president like Trump who bullshits and lies constantly. Why bother with getting the facts straight if the voters can't process the information and don't give a shit?
I haven't changed my position one bit. I'd suggest you quit cherry picking what you read and consider facts.
There is plenty of evidence to support it was a factor...actually in the end it cost Barney Frank his political career because he like you went off when anyone would suggest it played a part.
Just as I pointed out last week you have the Bear Stearns event incorrect as well.....and I'll warn you ahead of time you are really going down the wrong road with questioning anything I state about the organization so don't bother.
As for Ms Warren...as I stated I doubt she will be a factor but I am ready and willing to give her 1/1024th of my vote. :-)
The GSE's led the charge in securitizing mortgages in the first place. Then, when investment banks waded in and started making big profits in the Alt-A and subprime space, FNMA and Freddie Mac joined that party too. By the end of 2007, the GSE's were responsibLE for 90 PERCENT of new mortgage underwritings. Worse though, the hevy involvement of the GSEs, which had implicit government backing of the US government, provided many market participants with a false sense of security about the overall mortgage securities market. This led investment banks like AIG and others to write massive insurance contracts (credit default swaps) that nobody ever thought would be collected on except those smart hedge fund managers who were on the other side of them.
So FNMA and Freddie Mac were most certainly complicit in the collapse of the mortgage market, which triggered the broader financial crisis. In fact, things were so bad with the GSE's mortgage portfolios that the federal government had to nationalize them in order to stabilize the mortgage market. Read more below to understand how they were woven into this whole mess.
https://www.investopedia.com/articles/ec…
Liquidity is a function of buyer trust. When you have mortgage pools where the underlying mortgages are becoming increasingly suspect due to rising default rates, less people are going to get in line to buy them. Then, with demand tanking, so too does the value of the mortgage security itself. Then insurance contracts were triggered, which led to some very large financial institutions being on the hook for instant payments of very large sums of money.
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Like I said, this is typical TUSCL discussion where nobody can agree on the facts.
Get your facts straight. We care about the number of dogshit mortgages, not the total number of mortgage underwritings. The GSE's were responsible for about 17% of subprime mortgages during that period.
The Financial Crisis Inquiry Commission was a bipartisan commission that looked into this kind of question. Click on "view conclusions" and "view Dissents":
https://cybercemetery.unt.edu/archive/fc…
The only dissenting opinion, and the only member out of 10 that blames the GSEs is Wallison. And Wallison has been discredited for making up his own definition "subprime." The only other clown I can think of who agrees with you on the GSEs would be Larry Kudlow, Trump's Director of National Economic Council. Kudlow has a degree in history and dropped out of grad school to be a fake TV economist. He's a cartoonish clown who's wrong on everything.
Read my last about the concurrent crash in commercial and global real-estate. How could the GSE's possibly be responsible?
I know all about AIG and CDS contracts that they couldn't possibly honor during the crash. Taxpayers gave AIG $180B in the days before TARP -- and that money was never paid back.
This notion that the GSEs caused the crash is right-wing confirmation-basis.
Goddamn Baby Boomers;)
Blaming one party for a mess created by several is like blaming the guy who pumped the beer keg at the frat party for the intoxication of all the partygoers, trashing of the frat house and the spilling of the party out onto the street. It ignores the guys who rolled the keg in, or the ones who invited the partygoers, or the ones who were supposed to make sure that the party didn't get out of hand, or the guys who ran out for a second keg when the first one was running dry, or the guys who decided to organize high volume drinking games, etc.,etc.
Oh, and you're wrong about AIG too. The federal government was issued preferred shares of stock in exchange for the bailout, which they eventually sold for a tidy profit. The only remaining hangover now for the federal government is the ongoing conservatorship of Fannie Mae and Freddie Mac.
So you're admitting that 2/3 of the subprime market had nothing to do with the GSEs.
***Yet during all that time, they kept issuing more of the crap because nobody wanted the party to stop. Not the investment bankers, who were making a killing off of CMO underwriting. Not the quasi government agencies that facilitated much of this, because it allowed Fannie Mae and Freddie Mac to expand their kingdoms while providing politicians' constituents with easy access to mortgages and rising home values. Not the banking regulators, also for fear of pissing of the politicians who didn't want an interruption in access to mortgages or rising home values. Not the ratings agencies, who were getting paid a fortune to attach investment grade ratings to these blended piles of dog manure. Nobody. There is enough blame to go around in spades.***
clip 2:
***Blaming one party for a mess created by several is like blaming the guy who pumped the beer keg at the frat party for the intoxication of all the partygoers, trashing of the frat house and the spilling of the party out onto the street. It ignores the guys who rolled the keg in, or the ones who invited the partygoers, or the ones who were supposed to make sure that the party didn't get out of hand, or the guys who ran out for a second keg when the first one was running dry, or the guys who decided to organize high volume drinking games, etc.,etc.***
Randumb, keeping a conversation moving forward instead of getting circular involves using previously posted material as foundation to the subsequent points. ;)
***The GSE's led the charge in securitizing mortgages in the first place. Then, when investment banks waded in and started making big profits in the Alt-A and subprime space, FNMA and Freddie Mac joined that party too.***
***Worse though, the heavy involvement of the GSEs, which had implicit government backing of the US government, provided many market participants with a false sense of security about the overall mortgage securities market. This led investment banks like AIG and others to write massive insurance contracts (credit default swaps) that nobody ever thought would be collected on except those smart hedge fund managers who were on the other side of them. the Alt-A and subprime space.***
I've well aware of Wallison's post in The Atlantic and I've returned to it several times over the years. When you have 10 bipartisan members of a commission and only one (Wallison) writes a dissent blaming the GSEs it's important to give Wallison a voice (to see if he's right, he's made a mistake, or he has some agenda). What makes The Atlantic such a great publication is that it makes room for opinions that might be controversial.
David Min is a JD from Harvard and now a law professor from California. Min specializes in government regulation policy, securities law, and real-estate law. Here's Min's response to Wallison in THe Atlanic:
https://www.theatlantic.com/business/arc…
Most important part of Min's rebuttle is that Wallison used his own made-up version of what is "subprime" and overestimated subprime mortgage holdings of the GSEs by a factor of four.
It's simple really: there was a parallel securitization path that had nothing whatsoever to do with the GSEs. You have to come up with a definition of what's subprime that everyone agrees on and then you have to look at which securitization path was responsible for must of the dogshit mortgage-related securities.
Wallison's response in my Atlantic article is telling in that he doesn't dispute what Min is saying about a bogus definition of what's subprime. Instead Wallison goes into some paranoid ramble about Fannie/Freddie hiding something and an SEC lawsuit that prove him right some day. This is 2011, and never heard anything else out of Wallison.
You really have to get into the weeds with spreadsheets and equations to go any further -- and that's not going to happen on TUSCL where some lame analogy with a frat keg party is supposed to mean anything. This is dead issue among reputable economist, and the bulk of toxic securities had absolutely nothing to do with the GSEs. Yes, the GSEs played a small role.
SJG
https://www.amazon.com/gp/product/B00IHG…
NOLO, Bourbon Street
http://doxyspotting.com/?p=131772
AZTECA
https://www.youtube.com/watch?v=yS9WVbQT…