Happy Banned Books Week!

With everything that is going on this week, it would be a real shame not to remind ourselves that intellectual freedom must always be defended and to reminded ourselves of the great pleasures and solace of reading.

I am a voracious reader. It is not often when I don’t have reading material close by and is probably the biggest reason why I can seriously claim to have never been bored.

My parents are great readers. They, too, always have reading material close by and they passed on their fierce love of reading and of books. I learned to read early, because I badly wanted to be able to sit with them in the evening and turn the pages of these books. They taught me how to talk about books and information — especially how to value them both, how to be passionate about them, and how to look at them critically. The house is full of books — some quite scholarly as you might expect from 2 PhDs — and it was just fine to pick anything off of the shelve and delve in. The day that I was eligible to get my own library card was almost as momentous as the day I got my driver’s license. Both of my parents are political junkies and news and politics and other incendiary topics are actually welcome at the dinner table — just be able to keep up your end. As long as you can defend your points, it is fun and freewheeling — to this day I’ve friends who angle for invites to big deal dinners at my parents’ because it is such a wide-ranging and passionate conversation about just about anything.

(Edited) Why It’s Not Over, Part III

The end of the series and where I get into the really wishful thinking.

Ever since the meltdown a week or so back, economists and Wall Street analysts have been thinking and talking about a variety of alternatives to the Paulson plan and fortunately for me, these people have been writing all over the internet. I’m sharing some of the ideas I’ve read as links below, because we were all deprived of the opportunity to think about and weigh any options. Again, I don’t doubt that there is a real crisis here. And maybe we need to put some money into a fix. But if something is to be done, it should be in a way that actually provides some reassurances that we won’t be back in the same bind anytime in our lifetimes. And if something is to be done, then Congress and the Administration can speak to us like the tax-paying adults we are to ask for some considered support, and not more fearmongering. So here goes:

Bailout Nation — the Latest Deal

So after John McCain went to DC last week to collect his credit for the prior deal (and certainly without having one of his own), the news today is that there is apparently a new framework for a new bailout deal:

  • The total is still $700 billion, but is structured to allocate in 3 phases — $300 billion now, $100 billion at the President’s discretion, $350 billion only with Congressional approval;
  • Institutions selling assets to the government have to issue warrants, providing taxpayers an asset stake as a way to get back some of the bailout funds;
  • They expanded the pool of institutions who could participate, including small banks, pension funds, local governments
  • Executive Golden Parachutes are cut for institutions that get bailout funds;
  • An oversight board is created and that board has some accountability to and oversight by Congress;
  • Judicial review is preserved;
  • Private insurance funded by the banks to insure MBS;
  • The Government would somehow renegotiate bad mortgages that it owns either directly of via the securities.

From the Department of Stuff We Would Have Told You For Free

“The last six months have made it abundantly clear that voluntary regulation does not work.”

-Christopher Cox, Chairman Securities and Exchange Commission in NYT last Friday

More from the same article:
“The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street’s largest investment banks had contributed to the global financial crisis, and he abruptly shut the program down . . .

Republican Talking Point Smackdown — Freddie Mac and Fannie Mae Are Not Responsible for the Meltdown

John McCain has been talking this bit of idiocy up ever since his call to fire the Chairman of the SEC landed like a dud. It has been taken up by the wingnut media for dissemination to their aggrieved and credulous constituencies. Let’s take a look at why this talking point is complete bull and why they think this is useful to them. This is going to be long (go get your cocktail now) — but unlike any wingnut talking point, there is plenty of data along the way here. We’ll start with this graph from Brad Delong:

Frankly, this ought to be the end of the discussion. Using data from the Federal Reserve Board, you can see who was writing mortgages throughout the life of the housing bubble though the bubble bursting. And the conforming mortgages that Fannie and Freddie could acquire became a smaller part of the total mortgage market share starting in 2002, absolutely cratered (for a combination of reasons — market, political, structural (their accounting scandal) in 2004, 2005 and started ramping back up as the bubble began to pop. The giant spike at the end is when the Administration (aided and abetted by Congress) rejiggered the conforming limits of these GSEs to get them to take on jumbo loans in an impotent attempt to put their fingers in the dike.