Damn that evil FDR for helping lift America out of the Depression. How dare he invalidate the Constitution by providing jobs and assistance for Americans who were down on their luck!

I just think its funny that the guy who couldn't pay child support, racked up significant debt, and couldn't pay taxes accuses Congress of "spending money they don't have". Maybe he can give a personal witness from the well of the house on how Jesus helped him pay his back taxes.

Heck, if Broun can convert an ex-wife to Christ over the phone, imagine what he can do to the Congressmen and women who pretend to listen to him.

Blake, I know that this is a core ideology violation, but do you honestly see someone legit coming out and taking on the apparent goliath that is Paul Broun. I mean Barry Fleming was apparently the best Augusta had and he got ripped a new one. I think this will all be old news by 2010 (or at least thats what Broun's legion of morons will tell everyone). Unless your digging does show that Broun is blowing his budget on 40 oz.'s and hookers, its not really going to blow anyone away.

Also, John Boehner has come out and said that he'd help Broun with office funds if needed. Why in God's name would he do that? Its not like the GOP's resident medical marijuana enthusiast votes with them on great occasion anyway.

I had to take a bit of a break out of sheer disgust at the people who didn't vote on July 17th, but I'm back now. To answer you, kandrew, Boehner is doing what the GOP always does: protecting one of their own. Apparently to the crazy, far-right interest groups who have Boehner and the rest of that side's leadership dancing on hot coals, Broun is their guy, a Hero of the Taxpayer, even when he bankrupts his federal office. That, of course, isn't important to these crazed right-wingers. So what if Broun is a hypocrite? They totally control his votes.

Does anyone remember the 2002 election? Admittedly, the Democrats had obviously drawn the districts to keep themselves in the majority, sometimes absurdly so. And I believe we lost the senate majority in Atlanta because of it. This is the same kind of thing, or at least it is in my book. My great hope is that the people realize their last good opportunity is in November to get rid of Congress' Biggest Hypocrite.

Will those people who were too lazy to go to the polls in July bother in November? Who knows? I no longer have much faith in the "conservatives" of this district. Obviously, the majority are either extremists or lazy, and such people don't deserve good leadership. In other words, if we keep up this pattern, I suppose we deserve Paul Broun and all the embarrassment that comes with it.

You know Paul Broun makes easy filler for the indolent newspaper scribe because of his (Broun's) doctrinaire approach to legislation.

That doesn't mean that occasionally the doctrinaire approach doesn't produce the right results.

Fanny Mae and Freddy Mac may just be the most current poster children of good government programs gone bad, or the poster children for the maxim that "government programs never die, they just keep trying to find something to justify their existence".

Fanny Mae (Federal National Mortgage Association) is in fact a FDR creation. It had its genesis in the collapse of the banking system during the Great Depression. The motives behind its creation were both financial and sociological. There were simply no banks that were able or willing to loan money for home building. As anyone who has ever watched It's a Wonderful Lie knows, S & L's had their genesis in the unwillingness of traditional banks to make loans for home building or home purchase.

How Fanny Mae originally operated is worthy of note. It was a super savings and loan, and it guaranteed loans made by the Federal Housing Authority. It was the FHA that set housing and loan standards, and it was FHA that actually made the loans through local banks. Fanny Mae was simple the piggy bank that kept the FHA from running out of money, and which would have created major disruption in the economy. At the end of WW II, VA loans were also guaranteed by Fanny Mae.

So at the end of WW II, you have an obscure federal agency whose sole purpose if to fund loans for two other federal agencies. It effectively set the standards for loans, but there was still open competition between the government backed loans and private source loans. As the savings and loan movement developed and spread, with more market competition at the local level, private enterprise competed freely and successfully with the government backed mortgages. (For you whippersnappers, for a long time FHA had an artificially low maximum loan amount, and anything bigger had to go through a private lender.)

Going one step further out, you have to know that the model of purchasing a home, and especially consumables, (refrigerator, washing machine) on credit was not the norm in period before the Depression. A house was not considered a suitable security for a bank because it was illiquid, and non-income producing. A proper loan was made only to a person who then invest it into income producing assets, which in turn would generate enough profit to pay the bank, and make it worthwhile for the borrower to engage in the enterprise. The idea of "investing" in a home was simply not a part of the American culture.

Even the most ardent free market advocate (including yours truly) cannot deny that the Great Depression represented a failure of the free market system, and some sort of government intervention was required. We can argue until the cows come home about what was done, and what should have been done, but the historical evidence is clear that the "system" never gave any signs that it would self correct. The biggest "self correction" that the system produced was WW II, and that's not exactly the type of economic event you want to work into your economic projections (although that motivation has been suggested as part of the reason for sustaining the Viet Nam war).

Fannie Mae was created to provide backing to local banks to encourage them to enter into the home housing market. The creation of Fanny Mae (a) filled a vacuum in the American financial universe, which (b) created an enormous number of private sector jobs at, and (c) provided a mechanism by which working class citizens could reasonably aspire to homeowner ship, which not insignificantly, (d) had them buy into the "American Dream", and spurn the allure of the thriving Socialist movement.

Fast forward two decades. In 1968, the costs of the Viet Nam War were spiraling out of control, beyond anyone's wildest imagination. LBJ, in a classic government bookkeeping move, "privatized" Fanny Mae, taking it off the government books, even though its debts were fully backed by the government. Someone else is going to have to explain exactly how you do this. (It's analogous to the Classic Center getting a $1.1 million tax subsidy, and claim a $.5 million profit.)

Not only was Fanny Mae privatized, it was authorized to purchase conventional loans. So it went from an agency that only backed government based loans for first time homeowners that met stringent government standards, to an agency that would basically buy any loan made by anyone anywhere. More importantly, for the current day discussion, it became shareholder owned, and so was driven by the profit motive, rather than by social policy. In the ensuing years, Fanny Mae further expanded its role by purchasing adjustable rate mortgages, and second mortgages.

So by the mid-70's Fanny Mae had transformed itself from an obscure lender of last resort for new homeowners, to a real "playa" on the national home financing market.

So it is at this point Dr. Broun's doctrinaire approach kicks in. Let's assume for the sake of argument that privatizing Freddy Mae was good, and that allowing it to enter the open market in competition with private enterprise is good. What then is the government's obligation to bail out a private corporation that has made extremely bad decisions in the name of "stimulating" the economy. Remember these weren't mindless government minions blindly implementing government policy, these were extremely highly paid "smart people" who made some very bad decisions. Fanny Mae made bad decisions by loaning money to people who weren't able to pay it back. As I make my monthly housing payment, I do do have to question why the government should bail out other borrowers who made bad decisions. Aren't we essentially reversing our traditional ethic by rewarding both parties on either side of a bad decision, while penalizing parties who have acted prudently and made good decisions. Any fourth grader can explain to you the consequences of making bad decisions.

So for this one person, Dr. Broun's aversion to Congress spending money it doesn't have is one that I strongly share. (Did anyone else hear the record budget deficit number? Boy, I'm glad we've got some purse tightening Republicans running the government.) He may be rigid, and a little loopy, but that doesn't mean he isn't right. (Pun intended)

Which segues me into this so-called "foreclosure crisis". This "crisis" is right up there with the "Great Tomato Scare of 2008." There is no crisis. A "crisis" is what happened in the Depression. Citizens were forced out of their homes, and had to live on the streets and in labor camps. There wasn't adequate housing for the displaced people, and if there had been, they didn't have the cash resources to purchase it,and there were no credit markets for non-cash purchases. In our present crisis, people are not being put out on the streets with no decent housing available, and there has not been a collapse of the credit markets. The housing market is amply supplied, and people with reasonable prospects of repaying the loan can obtain one at some of the lowest rates this century. I find it very amusing that so many other Republicans are so quick to jump such a Democratic idea of insulating people (lenders and borrowers) from the consequences of making bad decisions.

Am I to believe that if you lost your job and the bank foreclosured on your home, that you would serenely accept your fate and refuse any government assistance on principle?

It's a good in principle for government not to bail out bad decisions. However, much has been made of Fannie Mae and Freddie Mac - like Chrysler, Bear Stearns and numerous airlines before them- being too big to fail. Teaching people a lesson at the expense of further collapse of our economy does not necessarily sound like a great trade-off.

But lenders in many case intentionally duped borrowers into signing mortgages that the lender knew full well they would not be able to repay. The lenders made a commission on each dubious loan, and when the balloon payment or rate adjustment came due, knew they could tack on exorbitant fees for late payments, then foreclose and flip the property. Or they could sell the debt to a long line of head-in-the-sand investors who thought the housing bubble would go on and on. If it didn't work ... golden parachute.

So this is yet another case of corporate excess, and I wouldn't want to reward that behavior. I'm sure there's a million reasons I'm not thinking of why this wouldn't work, but couldn't the government take over loans in danger of default and renegotiate the terms, then use the money on a limited lender bailout, but only on the condition that they submit to stricter oversight and cap executive salaries at a reasonable level?

That would let people keep their homes and reform the industry in one fell swoop.

BTW, contrary to popular belief, Fannie Mae is not guaranteed by the federal government. It merely enjoys certain interest rate and tax privileges.

"In our present crisis, people are not being put out on the streets with no decent housing available, and there has not been a collapse of the credit markets. The housing market is amply supplied, and people with reasonable prospects of repaying the loan can obtain one at some of the lowest rates this century. I find it very amusing that so many other Republicans are so quick to jump such a Democratic idea of insulating people (lenders and borrowers) from the consequences of making bad decisions."

You're hitting the nail on the head here ghost. I'm personally against the bailout... I just find it fun to rail on Rep. Broun when he tries to criminalize Supreme Court Justices, FDR, or anyone else who hasn't "read" the Constitution.

Since I'm not one of the chief economic advisers to John McCain, I can reiterate Phil Gramm's positions that we're a nation of whiners. Yes the economy is bad in some areas. People are paying more than they ever have for gas and food. But this isn't the Depression, as much as Keith Olbermann and cronies at (P)MSNBC, CNN, and the major news networks would lead us to believe.

Do I have stocks taking a hit right now, yes. I also know that in a couple months time there's going to be some stocks available at low low prices. Believe me, I'm licking my chops waiting for the right moment to jump on some of them. The point made is that we have lulls and booms in this economy all the time. The US will bounce out of this.

The problem is the utter lack of resolve I've noticed among the people of this country. Nearly everyone seems content to throw up their hands and proclaim that everything is lost. I can't believe that this is the same country that produced the brave men who fought in Europe and the Pacific. Moreover, those who stayed behind and helped drive this country through a war and a Depression at the same time.

How many Americans now would take a job with the TVA or CCC and work for their keep instead of sitting back and collecting welfare checks? We've gotten into such a lazy patter as a nation (and fat too), that we complain when something isn't handed to us on a silver platter. We're Americans. We defeated the world's most powerful empire. Established a nation based in freedom and democracy. Survived a Civil War. Won two World Wars. Defeated Communism. Nothing is "too hard" for us.

Personally, I believe this is only the beginning and we are headed for far worse times. There are solutions to our current housing and energy problems, we have known that for years, but I predict that the citizens will continue to whine and waste while the electeds pander and infight to gain a political edge.

Housing crisis, energy crisis, stagnant wages, rising unemployment, crumbling infrastructure, lack of education, staggering debt. America is rapidly turning into a Third World country. And we are letting it happen. We mortgaged our future. Now that the inevitable market correction is here, we can't take the pain.

"So if by government assistance, you mean some financial counseling, and maybe a one time grant to help me move into a smaller, more appropriate rental unit, then yes, I'm all for it."

Yeah, that's pretty much what I meant. Duh.

Did you really think I wanted taxpayers to pay off mortgages for the Crystal Hills crowd? As far as I'm concerned, they can suck it up, sell at a loss and move to Crestwood. Poor babies.

And, no, it doesn't take a financial wizard to understand interest-only loans, but it would help if the loan officer actually told you that's what you were signing. It would also help if the bank would pick up the phone when a borrower called asking to refinance.

but it would help if the loan officer actually told you that's what you were signing.

You're just going to have to believe on this, but I've been working with in this area for 30 years, and it wouldn't help if you branded it on the back of their hand.

In the disclosure department, home buyers are always a lot more interested in what the carpet allowance is than how much they are ultimately going to pay.

Pick out any office of Friendly Bob, and look at the disclosure statements where is says that in big bold government regulated font size numbers that your are borrowing money at 300-600% annual percentage rate,and that hasn't dissuaded anyone yet.

I guess it's all comes back to just how paternalistic you expect government to be. I'm not sure that it's the loan officer's duty to tell Mr. and Mrs. America, "you are about to make a really, really stupid financial decision."

I don't expect government to be paternalistic. I expect the market to operate in a manner where it is in banks' best interests not to offer loans that borrowers won't be able to pay back. That's not how it's worked the past few years, though.

Lost in the discussion is the whole idea of "mission drift."

Fanny Mae was originally supposed to provide a pool of liquidity to fund first time homebuyers. As I casually noted, a prime example of a good idea gone astray.

They've definitely overreached. There've been some good stories in the NY Times recently. Maybe I'll find links later.

I agree that we are headed into a market correction but I don’t think the sky will be falling for everyone. There are plenty of people in this economy who have been making far more money than they should have. Like people who push drugs on doctors and then monitor to see if the doctor is prescribing their high-cost drugs enough. And loan officers who do not have a clue about finance. Before the guy who wrote my mortgage was a lender, he delivered for Locos. He quit soon after to teach English in Japan. And what about the legions of real estate agents hawking sports condos and loft living. They’re about to have a side of humble pie with their edamame.
I worked in Atlanta in the tech bubble and I remember how plenty of Internet CEOs had to find actual jobs when the music stopped. A bunch of them started selling condos. I think this is a same situation on a larger scale. A return to reasonableness, perhaps and I think all of us will need to make steps towards being more reasonable but it will affect some more than the majority. Ghost has it. People don’t need 5 bedroom houses anymore than the ABH needs a giant half empty cavern with a helicopter pad. That becomes especially true now that the Home Front section is about to become less of a cash cow. People who have made their money off the predatory economy are going to feel the squeeze harder than most. And sure, there will be less BMW SUVs sold and fewer lunches at East West will included the requisite bottle of chardonnay, however, businesses that are built on stable markets will feel the brunt less than those who were getting rich but probably shouldn’t have.
It’s true. America has a crisis of value. We have too many jobs that just move money from one side of the desk to the other and then take a cut without providing any real value. We have too many empty skull bankers, bottom feeding lawyers, money sucking, do nothing organizations, value absent strategies and a whole lot of people who think they will strike it rich if, instead of actually working, they just produce the most perfect post on My space or you tube. To those people I say, wake up, get off your stupid lazy ass and get to work like the rest of us have for years.

Where this value crisis hits home is that no leader seems to have a plan how to reposition the economy based on anything sustainable. Our President seems intent on giving the all clear while congress is bailing out Fanny and Freddy and Bear. One of the presidential candidates seems to think our economy can be improved if we just kick ass while the other thinks we should have a group hug to raise the GDP. Our Governor thinks we can reposition Georgia if all state employees read the two business books he has read and then expect tourism to save us. Our mayor is just certain we will strengthen the local economy if we have more website firms, café’s, urban agriculture and independent film projects.

Where I agree with you B, is that if we keep electing panderers, will not confront our economic issues in a meaningful way. America has begun to grow up and now we need to figure out what we are going to do with ourselves. Our industry has left for China. Our farms are being cleared for neighborhoods of modestly priced, eight bedroom bungalows with names like “The Pointe”. We are frantically supplanting our University engineering departments with degrees in the business management of things that might involve the Internet. Well that and , of course, finance. I would be insensitive if i did not also mention the degrees for the growing and lucrative fields of non-profit management, an apparent core part of the economic plan for Athens. Instead of creating value we have become content to pass the value around for a charge.

It is certainly time to talk about our role in the world in a realistic and actionable way. We need a plan for how we will get this economy away from simple transactions and more towards the creation of some value.

I the meantime, I hope this post gets a lot of views and forwarded onto some blogs. That way it will get a lot of exposures and I’ll make money with Google ad sense from all the very effective banner ads that will be saddled up next to this rant.
Because that’s how we’ll all get rich in the future economy, isn’t it?