Obama lays plans to kill expectations after election victory.

[QuantumLo0p]

Trouble in Utopia? Could it be that BamaBiden has not been totally honest with America?! Say it isn't so!

Friday, 2008-31-305
By Tim Reid, The Times of London

Barack Obama's senior advisers have drawn up plans to lower expectations for his presidency if he wins next week's election, amid concerns that many of his euphoric supporters are harboring unrealistic hopes of what he can achieve.

The sudden financial crisis and the prospect of a deep and painful recession have increased the urgency inside the Obama team to bring people down to earth, after a campaign in which his soaring rhetoric and promises of "hope" and "change" are now confronted with the reality of a stricken economy.

One senior adviser told The Times that the first few weeks of the transition, immediately after the election, were critical, "so there's not a vast mood swing from exhilaration and euphoria to despair."

Read the entire article at
http://www.timesonline.co.uk/tol/news/world/us_and_americas/us_elections/article5051118.ece

[chrmjenkins]

Well, there's a whole two months after the election before anyone takes office. I would consider that a cooling down period. Then Obama doesn't have to stump for the job, just the things he plans to do. It should become more pragmatic speech then, and that should ramp people down into "get things done" rather than "he will save the world!"

[rdowns]

I don't think the American people are under any illusions, regardless of which side you support, that we are in for some very tough times that will take years to recover from.

[Anuba]

Well DUHH. Of course he has to lower expectations, to stifle all the political ignorami who expect him to fix everything in two weeks. Cleaning up this mess will take several years -- recovery from the Great Depression took over 10 years -- and with a little luck, things will start to turn around near the end of the 2008-2012 term. If Obama takes over as captain of the Titanic, he will have to work hard just to steer clear of the iceberg. It ain't gonna be a luxury cruise for a loooooooong time. But it's a lot better than McCain/Palin, who would run straight into the iceberg full steam.

[freeny]

Trouble in Utopia? Could it be that BamaBiden has not been totally honest with America?! Say it isn't so!

Friday, 2008-31-305
By Tim Reid, The Times of London

Barack Obama's senior advisers have drawn up plans to lower expectations for his presidency if he wins next week's election, amid concerns that many of his euphoric supporters are harboring unrealistic hopes of what he can achieve.

The sudden financial crisis and the prospect of a deep and painful recession have increased the urgency inside the Obama team to bring people down to earth, after a campaign in which his soaring rhetoric and promises of "hope" and "change" are now confronted with the reality of a stricken economy.

One senior adviser told The Times that the first few weeks of the transition, immediately after the election, were critical, "so there's not a vast mood swing from exhilaration and euphoria to despair."

Read the entire article at
http://www.timesonline.co.uk/tol/news/world/us_and_americas/us_elections/article5051118.ece

One could say, that at least the Obama campaign is being realistic.

[3rdpath]

i don't have the unrealistic expectation that obama can fix 8 years of epic failure within the 1st 100 days of office...or even the first year. it's a huge mess he's inheriting.

what i do believe is he'll bring a level of intelligence and responsibility to the office that has been sorely lacking.

i see an end to the days of sociopathic above-the-law government. that's enough for me.

[IJ Reilly]

I expect what we will hear from Obama after he takes office is a frank appraisal of the difficultly of the challenges we face and the need for all Americans to do their share in overcoming them. The last part at least is something we never heard from George Bush, unless doing your share meant going shopping.

[freeny]

i don't have the unrealistic expectation that obama can fix 8 years of epic failure within the 1st 100 days of office...or even the first year. it's a huge mess he's inheriting.

what i do believe is he'll bring a level of intelligence and responsibility to the office that has been sorely lacking.

i see an end to the days of sociopathic above-the-law government. that's enough for me.

I think you summed it up pretty well.

At least there will now be HOPE.
and thats a good start.

[Ntombi]

i don't have the unrealistic expectation that obama can fix 8 years of epic failure within the 1st 100 days of office...or even the first year. it's a huge mess he's inheriting.

what i do believe is he'll bring a level of intelligence and responsibility to the office that has been sorely lacking.

i see an end to the days of sociopathic above-the-law government. that's enough for me.

QFT.

The only people with unrealistically high expectations are those who haven't been paying attention.

[hulugu]

I expect what we will hear from Obama after he takes office is a frank appraisal of the difficultly of the challenges we face and the need for all Americans to do their share in overcoming them. The last part at least is something we never heard from George Bush, unless doing your share meant going shopping.

I think you're right. The most difficult thing will be giving such a frank appraisal without partisan hacks immediately railing about deception on Obama's part because he can't wave a magic wand.

[Iscariot]

Ziggy says Sam doesn't get to jump until he wins the election.

[IJ Reilly]

I think you're right. The most difficult thing will be giving such a frank appraisal without partisan hacks immediately railing about deception on Obama's part because he can't wave a magic wand.

We will hear it. Not only will the opposition not take a holiday, big obstacles are likely to be created by Obama's own party in Congress. Expectations are going to be high, probably unrealistically high, but I don't think Obama has ever promoted the idea that progress is going to be fast or easy. One big difference that I do expect (and will be disappointed if it doesn't happen) is that Obama will try to marshal the backing of the American people throughout the process -- again in contrast to George Bush, who assumed a victory however narrow gave him a "mandate" to do whatever he wanted.

[Cleverboy]

Ziggy says Sam doesn't get to jump until he wins the election. He...? Well, if The Onion is to be believed, let's hope Sam finally screws it up.
Scott Bakula Jumps Into McCain's
Body Just Before Election
http://origin.theonion.com/content/news_briefs/scott_bakula_jumps_into

~ CB

[Iscariot]

He...? Well, if The Onion is to be believed, let's hope Sam finally screws it up.


~ CB

The punch… and beaten to it! I am shamed.

[leekohler]

My only expectation is that he won't be Bush. That's good enough for me.

[Peace]

Since the OP hasn't chimed in since he/she started the discussion I can only see this as another Republican "bait and run" tactic.

[Tilpots]

From the article:

If he wins, Mr Obama will inherit a Democratic-controlled Congress, and might even have the benefit of a 60-seat filibuster-proof “supermajority” in the Senate. Such a scenario would allow him to push through legislation largely unfettered by Republican opposition. Yet it also means that should the country still be mired in recession in three years’ time, voters — who have short memories — will probably blame him and the Democrats on Capitol Hill. Those stakes have led Mr Obama to conclude that while expectations need to be tempered, big things need to be achieved very early in his first term, when he will still have the political capital to achieve some of his most ambitious legislative goals.

A big part of this is going to be the make-up of Congress, i.e. did the Dems get to 60 Senators... Change will come a lot faster if it's like that Nextel commercial with the Firemen running things. Aye!

I do think he'll attempt to tackle a major problem very quickly to follow up on his promises. Maybe he'll set a timeline for withdraw in Iraq, or close Guatanamo. The expectations for quick action will be felt and I'm sure he'll try to deliver somewhere.

[mactastic]

Yeah, 'cuz Obama's the only politician who's ever engaged in the "lowered expectations" game.

What a pathetic line of attack. :rolleyes:

[IJ Reilly]

A big part of this is going to be the make-up of Congress, i.e. did the Dems get to 60 Senators... Change will come a lot faster if it's like that Nextel commercial with the Firemen running things. Aye!

Lest we forget, in the two years since the Democrats gained control of Congress, they've faced the veto pen of the president. Before that, they were cut out of legislation entirely. The Democratic members are going to have an unrequited goodie list a mile long. It will be tough for Obama to navigate these waters without signing off on virtually everything.

[Azmordean]

Of course, this ignores the fact that McCain's supporters, which, even if Obama wins, are a significant portion of the populace (close to 50% most likely) will not be experiencing anything close to euphoria about his election, and will in fact be expecting the worst. Perhaps we will breathe a sigh of relief if this article is correct and we realize the "terrible trio" (Obama, Pelosi, Reid) aren't going to move this country too far towards' France's economic positions.

[Blue Velvet]

Of course, this ignores the fact that McCain's supporters, which, even if Obama wins, are a significant portion of the populace (close to 50% most likely)

Projections for McCain are currently about 46% of the voting population, about 60 million out of a turnout of 130 million (122 million in 2004). Which is only 20% of the population of the USA.

What is this constant obsession with France? Coming from a country that's just spent $700billion bailing out Wall Street, has an unemployment rate of about 6% and is currently in recession... Criticism of France with its GDP growth of 1.9%, inflation at 1.8%, excellent infrastructure, world-class healthcare, higher levels of education and life expectancy than the US... I'm not sure this is a fruitful comparison for Americans to make.

[Lord Blackadder]

What is this constant obsession with France?

It's the shoulder-shrugging and frog-eating. And the socialism. :rolleyes:

The other day McCain warned that "Socialist" Obama would turn us towards socialism like Sweden (who, last time I checked, was an ally). What the heck did Sweden ever do to become an anti-example?

[Blue Velvet]

It's the shoulder-shrugging and frog-eating. And the socialism. :rolleyes:


Freedom fries. Kerry looks French.

I would have thought that Americans would have understood the close historical ties between France and America. The Statue of Liberty wasn't paid for and built by Americans... and they were an ally in the American Revolutionary War.

[Lord Blackadder]

they were an ally in the American Revolutionary War.

They were our first ally in our national history, and their naval power decided the conflict. We may have won our independence anyway, but France played a big role in our birth as a nation.

I sometimes think that the French and Americans bicker because we are so alike in many ways; strong national pride, a democratic born out of revolution against imperialist monarchy...the language of our constitutions come from the same sources. We are unwilling to admit we are attacking our own reflections.

[IJ Reilly]

It's the shoulder-shrugging and frog-eating. And the socialism.

They speak French. Isn't than enough reason?

[rdowns]

Projections for McCain are currently about 46% of the voting population, about 60 million out of a turnout of 130 million (122 million in 2004). Which is only 20% of the population of the USA.


US population is 305 million.
No idea what the number of eligible voters is.
Voter turnout in 2004 was 61% (of registered voters, of course)
Turnout is expected to reach 80% this year.

[Azmordean]

Projections for McCain are currently about 46% of the voting population, about 60 million out of a turnout of 130 million (122 million in 2004). Which is only 20% of the population of the USA.

So I assume the same logic applies to Obama then. Using your numbers, if 130 million turn out, and Obama gets 70 million, that means he won 23% of the populace to McCain's 20%. Regardless of what numbers you use, my point was there is a significant level of support for McCain so this suggestion that some huge majority of the country is going to regard an Obama victory (should it occur) as some kind of glorious event is mistaken.

What is this constant obsession with France? Coming from a country that's just spent $700billion bailing out Wall Street, has an unemployment rate of about 6% and is currently in recession... Criticism of France with its GDP growth of 1.9%, inflation at 1.8%, excellent infrastructure, world-class healthcare, higher levels of education and life expectancy than the US... I'm not sure this is a fruitful comparison for Americans to make.

I said nothing about hating or disliking France. They are a US ally, and ever since Chirac left office, I have had little issue with the French. My point was that conservatives fear Obama taking us in the direction of French socialism (NOT pure socialism, but more elements of socialism) - a more public-dominated economy. Your post makes it sound as though you think that is a good thing - and that's fine, people have different views - my point is many people on the center-right and right think that would be an abject disaster, myself included.

Again the purpose of my post was to point out that even if Obama wins with a significant majority of electoral votes there are a LOT of people who will be rather depressed with his victory and have genuine fear for the future of our country, particularly economically. I point that out because the article posted made it sound like the whole of the US is going to rejoice if Obama takes office. I did not post to get into a debate about whether a more right or left leaning economic policy is most beneficial.

[Blue Velvet]

So I assume the same logic applies to Obama then.

Absolutely. I was just correcting your assertion that nearly 50% of the populace was a supporter of John McCain.


My point is many people on the center-right and right think that would be an abject disaster, myself included.

As opposed to the glorious success of the US economy at the moment after eight years of Republican rule? The worst economic collapse since the Great Depression, trillions of dollars spent in Iraq, and $700billion thrown at Wall Street? Rising unemployment and a record deficit? If that's not disaster, I'm not sure what is.

With all due respect, you should be fearing four to eight years of the same from a candidate that has gone on the record as saying: "The issue of economics is not something I've understood as well as I should".

[Thomas Veil]

Well DUHH. Of course he has to lower expectations, to stifle all the political ignorami who expect him to fix everything in two weeks. Cleaning up this mess will take several years -- recovery from the Great Depression took over 10 years -- and with a little luck, things will start to turn around near the end of the 2008-2012 term. If Obama takes over as captain of the Titanic, he will have to work hard just to steer clear of the iceberg. It ain't gonna be a luxury cruise for a loooooooong time. But it's a lot better than McCain/Palin, who would run straight into the iceberg full steam.My thoughts exactly.

The only thing I can add is that Obama will also have to deal with a vicious, vindictive Republican party which will do everything in its power to make sure he is not successful. You think the Ayers/birth certificate/etc. bullcrap is going to end just because the election is over? Think again. If the Clinton years are any guide, they will keep digging until they find several little nuggets of information that they can twist and distort, and then they will start calling for independent prosecutors and suchlike. The advantage Obama will have is that he'll have the majority of Congress watching his back, but a Dem majority is not guaranteed for the next four or eight years, and the Republicans still know how to manipulate the media. Even if they can't force an investigation of their imagined irregularities, they can sew doubt and hatred in the minds of the public.

That, as much as anything else, is why Obama needs to keep expectations realistic. It's not that his fans will think he's going to create miracles, it's that his critics will complain bitterly that he isn't.

[iSaint]

I think you summed it up pretty well.

At least there will now be HOPE.
and thats a good start.

Hope don't pay the bills.

Wait, sorry...Obama's going to equalize everything. :rolleyes:

[Azmordean]

Absolutely. I was just correcting your assertion that nearly 50% of the populace was a supporter of John McCain.




As opposed to the glorious success of the US economy at the moment after eight years of Republican rule? The worst economic collapse since the Great Depression, trillions of dollars spent in Iraq, and $700billion thrown at Wall Street? Rising unemployment and a record deficit? If that's not disaster, I'm not sure what is.

With all due respect, you should be fearing four to eight years of the same from a candidate that has gone on the record as saying: "The issue of economics is not something I've understood as well as I should".

I will admit to being a proponent of neo-classical economic theory. That being said, it was Clinton, not Bush, who first pushed for a loosening of restrictions on loans so "everyone can afford a home." And what about the post-9/11 downturn - things did awfully well then under Bush. Further, the president in general gets far too much of the acclaim when there's a good economy and far too much of the blame when there's a bad economy. Any president's ability to effect the economy is far more limited than "Joe Six Pack" thinks.

I think most would agree that the financial sector does however need to be watched a little more closely. And if you look at McCain's record, this is something he has advocated for, especially with respect to Fannie and Freddie. The fact is, there is plenty of blame to go around on this issue. Do I think Bush has done a perfect job with the economy - of course not. But I think he takes FAR too much of the blame for the current situation. We have just had a perfect storm of a normal business cycle down turn combined with a serious financial crisis brought on by the sub-prime "scandal."

Everyone blames Bush because it happened on "his watch." And to a degree, that's fair, though if you know much about economics, it makes little sense. If you know much about economics you know the seeds of this crisis were being sowed for a long time. The housing bubble grew, and then, basically, Wall Street kept it growing by supporting it with funny money. Now that its popped, we all pay the price. As I said, plenty of blame to go around. And regardless, even if you do blame Bush, McCain is NOT Bush. Again, he pushed for greater regulation of Fannie and Freddie - not something terribly popular with members of either party at the time. As for Congress, yeah, I agree with you, the Republican Congress was pretty poor. They failed, and they spent like they had just won the lottery. The Democrats have been no better. But I look at the candidates INDIVIDUALLY - McCain vs. Obama - not Republican vs. Democrat. I don't hold McCain responsible for the overall failure of Congress, or for Bush's failures for that matter - and I think anyone who does is missing the point in this election.

The one thing anyone who has half a clue about the economy knows though, is that raising taxes on business and investment is NOT the way improve it. Now, you may disagree with neoclassical economic theory. You may think even distribution of wealth now is more important than creation of wealth. You may think socialism is grand. That's your prerogative.

My point is, this economic crisis, which is very bad, is nonetheless a blip in the grand scheme of things. This ONE crisis has not convinced me that its time to abandon the American pro-business, low-tax model and run to European socialism. I remain convinced that American style capitalism remains the most powerful engine for economic growth and that while it may provide a little relief short term, long term, "Obamanomics" will be an abject disaster.

[Blue Velvet]

Now, you may disagree with neoclassical economic theory. You may think even distribution of wealth now is more important than creation of wealth. You may think socialism is grand.

If you think that socialism is the only alternative to neoclassical economic theory, then I suspect you don't have the top 10% in your class degree in economics that you claim you have, swiftly edited out of your post before you thought that anyone would see it.

If you think the historically appropriate fiscal response to a recession is a spending freeze, as proposed by John McCain, then I suggest you complete your alleged degree with a doctorate.


"Obamanomics" will be an abject disaster.

Please explain how different "Obamanomics" as you put it, is different to Bill Clinton's tax policies? Please explain how partially-nationalising the banks is not socialism? The days of supply-side voodoo and deregulation being the received wisdom are near over. Attempting to spread the blame is an abject dereliction of responsibility.

[quagmire]

Well DUHH. Of course he has to lower expectations, to stifle all the political ignorami who expect him to fix everything in two weeks. Cleaning up this mess will take several years -- recovery from the Great Depression took over 10 years -- and with a little luck, things will start to turn around near the end of the 2008-2012 term. If Obama takes over as captain of the Titanic, he will have to work hard just to steer clear of the iceberg. It ain't gonna be a luxury cruise for a loooooooong time. But it's a lot better than McCain/Palin, who would run straight into the iceberg full steam.

No, bad analogy as running into the iceberg straight on could have saved the Titanic from sinking. So that would be a smart thing McCain/Palin would be doing. ;)

[Azmordean]

If you think that socialism is the only alternative to neoclassical economic theory, then I suspect you don't have the top 10% in your class degree in economics that you claim you have, swiftly edited out of your post before you thought that anyone would see it.

If you think the historically appropriate fiscal response to a recession is a spending freeze, as proposed by John McCain, then I suggest you complete your alleged degree with a doctorate.




Please explain how different "Obamanomics" as you put it, is different to Bill Clinton's tax policies? Please explain how partially-nationalising the banks is not socialism? The days of supply-side voodoo and deregulation being the received wisdom are near over. Attempting to spread the blame is an abject dereliction of responsibility.

First, regarding my degree, yes I do indeed have such a degree, and yes I was in the top 10%. I edited it out because I misread your prior post. I for some reason read it as you saying *I* did not have a clue about economics. I read it too quickly - when I re-read it, I realized it was a McCain quote you were talking about, so I edited out the info about my degree because my intent was not to boast.

Second, Clinton vs. Obama:

Maybe I recall incorrectly, as I was rather young when Clinton was in office, but I don't recall Clinton proposing a corporate tax hike or a capital gains tax hike. While I do not think higher income taxes on 250K+ earners (or is it down to 200K now?) are a good thing, I'm less worried about that. I AM concerned about raising the corporate tax though. This country already has one of the highest corporate tax rates in the world, particularly if you take into account the fact the states hit up corporations in addition to the Feds. Higher corporate taxes will (a) be passed on directly to consumers; (b) will cause job cuts; and (c) may well cause companies with the means to do so (read, large multinational corporations employing lots of people) to move to other countries with a more favorable business environment (and there are MANY such countries).

As for capital gains, LOTS of people invest, including people who aren't rich, so that will hit everyone. Further, a higher capital gains rate will in my mind chill saving and investment, which is hardly a good thing.

In regards to McCain's spending freeze, I think that's a bunch of political rhetoric. Its not feasible, and I don't expect it to happen. I never said McCain was perfect - his health care plan, for example, is an abject disaster (to use the same term I've been using :)). I do think he is the better candidate overall though. I just see that Obama has a fundamentally different approach to the economy and tax policy than we've seen for a LONG time. And yes, I think it has more *elements* of socialism (but no, it is not socialist). Personally, I believe our economy IS fundamentally strong. There are serious rough spots that need changing - financial sector regulation being one of them (and McCain, while for de-regulation generally, was for MORE regulation in this instance, contrary to popular belief) - but I think the business-friendly low-tax approach is fundamentally correct. To borrow some software terms, I think we need a good patch to fix the bugs - not to scrap the whole thing and start over with a totally new approach. You may disagree, and if you do, that's fine. Not everyone is going to see the world the same way.

[mark!]

Yeah, better tether the liberals to the ground so they don't float away :rolleyes::rolleyes::rolleyes::rolleyes:

[jplan2008]

That being said, it was Clinton, not Bush, who first pushed for a loosening of restrictions on loans so "everyone can afford a home." Further, the president in general gets far too much of the acclaim when there's a good economy and far too much of the blame when there's a bad economy. Any president's ability to effect the economy is far more limited than "Joe Six Pack" thinks.

I think most would agree that the financial sector does however need to be watched a little more closely. And if you look at McCain's record, this is something he has advocated for, especially with respect to Fannie and Freddie. The fact is, there is plenty of blame to go around on this issue. Do I think Bush has done a perfect job with the economy - of course not. But I think he takes FAR too much of the blame for the current situation. We have just had a perfect storm of a normal business cycle down turn combined with a serious financial crisis brought on by the sub-prime "scandal."

Everyone blames Bush because it happened on "his watch." And to a degree, that's fair, though if you know much about economics, it makes little sense. If you know much about economics you know the seeds of this crisis were being sowed for a long time. The housing bubble grew, and then, basically, Wall Street kept it growing by supporting it with funny money. Now that its popped, we all pay the price. As I said, plenty of blame to go around. And regardless, even if you do blame Bush, McCain is NOT Bush. Again, he pushed for greater regulation of Fannie and Freddie - not something terribly popular with members of either party at the time. As for Congress, yeah, I agree with you, the Republican Congress was pretty poor. They failed, and they spent like they had just won the lottery. The Democrats have been no better. But I look at the candidates INDIVIDUALLY - McCain vs. Obama - not Republican vs. Democrat. I don't hold McCain responsible for the overall failure of Congress, or for Bush's failures for that matter - and I think anyone who does is missing the point in this election.

The one thing anyone who has half a clue about the economy knows though, is that raising taxes on business and investment is NOT the way improve it. Now, you may disagree with neoclassical economic theory. You may think even distribution of wealth now is more important than creation of wealth. You may think socialism is grand. That's your prerogative.

My point is, this economic crisis, which is very bad, is nonetheless a blip in the grand scheme of things. This ONE crisis has not convinced me that its time to abandon the American pro-business, low-tax model and run to European socialism. I remain convinced that American style capitalism remains the most powerful engine for economic growth and that while it may provide a little relief short term, long term, "Obamanomics" will be an abject disaster.

The president doesn't have much control, but Obamanomics will be an abject disaster?

Who says we're running to European socialism? McCain?

I don't blame everything on Bush. I blame a lot on Reagan, and some on Clinton for continuing a lot of Reagan's changes (let's call George HW a blip). McCain has opposed regulation in most instances, and while he had the right instincts and a lot of guts to oppose Bush's tax cuts, he has changed all that.

"American style capitalism" involves a progressive income tax system. We saw a Great Depression when there was an extraordinary concentration of wealth with top 1% of the population. We saw extraordinary growth when top tax rates were 70-90%. And now you're really saying a top tax rate of 39% is "European socialism?"

I AM concerned about raising the corporate tax though. This country already has one of the highest corporate tax rates in the world, particularly if you take into account the fact the states hit up corporations in addition to the Feds.

Who says they're one of the highest in the world? McCain? (he wouldn't want to worry Joe Six PAck with details like the effective tax rate)

As far as I understand it, Obama isn't planning on raising corporate taxes. He's planning on keeping them the same, and taking away some tax breaks. The Republican alternative to the bailout package was to lower corporate taxes for those doing business overseas even further, and, you guessed it, the money would trickle down. With your economics degree in top 10% of your class, please explain that reasoning.

Fannie and Freddie were NOT the cause of this financial mess. And McCain and his friend Gramm caused the deregulation that allowed the mess to occur. Clinton's push for homeownership wasn't either.

http://www.mcclatchydc.com/251/story/53802.html

Federal Reserve Board data show that:

More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics.
The "turmoil in financial markets clearly was triggered by a dramatic weakening of underwriting standards for U.S. subprime mortgages, beginning in late 2004 and extending into 2007," the President's Working Group on Financial Markets reported Friday.

Conservative critics claim that the Clinton administration pushed Fannie Mae and Freddie Mac to make home ownership more available to riskier borrowers with little concern for their ability to pay the mortgages.

"I don't remember a clarion call that said Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster," said Neil Cavuto of Fox News.

Fannie, the Federal National Mortgage Association, and Freddie, the Federal Home Loan Mortgage Corp., don't lend money, to minorities or anyone else, however. They purchase loans from the private lenders who actually underwrite the loans.

It's a process called securitization, and by passing on the loans, banks have more capital on hand so they can lend even more.

This much is true. In an effort to promote affordable home ownership for minorities and rural whites, the Department of Housing and Urban Development set targets for Fannie and Freddie in 1992 to purchase low-income loans for sale into the secondary market that eventually reached this number: 52 percent of loans given to low-to moderate-income families.

To be sure, encouraging lower-income Americans to become homeowners gave unsophisticated borrowers and unscrupulous lenders and mortgage brokers more chances to turn dreams of homeownership in nightmares.

But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party's standard bearer, President Bush, didn't criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership.

Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication. One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble.

During those same explosive three years, private investment banks — not Fannie and Freddie — dominated the mortgage loans that were packaged and sold into the secondary mortgage market. In 2005 and 2006, the private sector securitized almost two thirds of all U.S. mortgages, supplanting Fannie and Freddie, according to a number of specialty publications that track this data.

In 1999, the year many critics charge that the Clinton administration pressured Fannie and Freddie, the private sector sold into the secondary market just 18 percent of all mortgages.

Fueled by low interest rates and cheap credit, home prices between 2001 and 2007 galloped beyond anything ever seen, and that fueled demand for mortgage-backed securities, the technical term for mortgages that are sold to a company, usually an investment bank, which then pools and sells them into the secondary mortgage market.

About 70 percent of all U.S. mortgages are in this secondary mortgage market, according to the Federal Reserve.

Conservative critics also blame the subprime lending mess on the Community Reinvestment Act, a 31-year-old law aimed at freeing credit for underserved neighborhoods.

Congress created the CRA in 1977 to reverse years of redlining and other restrictive banking practices that locked the poor, and especially minorities, out of homeownership and the tax breaks and wealth creation it affords. The CRA requires federally regulated and insured financial institutions to show that they're lending and investing in their communities.

Conservative columnist Charles Krauthammer wrote recently that while the goal of the CRA was admirable, "it led to tremendous pressure on Fannie Mae and Freddie Mac — who in turn pressured banks and other lenders — to extend mortgages to people who were borrowing over their heads. That's called subprime lending. It lies at the root of our current calamity."

Fannie and Freddie, however, didn't pressure lenders to sell them more loans; they struggled to keep pace with their private sector competitors. In fact, their regulator, the Office of Federal Housing Enterprise Oversight, imposed new restrictions in 2006 that led to Fannie and Freddie losing even more market share in the booming subprime market.

What's more, only commercial banks and thrifts must follow CRA rules. The investment banks don't, nor did the now-bankrupt non-bank lenders such as New Century Financial Corp. and Ameriquest that underwrote most of the subprime loans.

These private non-bank lenders enjoyed a regulatory gap, allowing them to be regulated by 50 different state banking supervisors instead of the federal government. And mortgage brokers, who also weren't subject to federal regulation or the CRA, originated most of the subprime loans.

In a speech last March, Janet Yellen, the president of the Federal Reserve Bank of San Francisco, debunked the notion that the push for affordable housing created today's problems.

"Most of the loans made by depository institutions examined under the CRA have not been higher-priced loans," she said. "The CRA has increased the volume of responsible lending to low- and moderate-income households."

In a book on the sub-prime lending collapse published in June 2007, the late Federal Reserve Governor Ed Gramlich wrote that only one-third of all CRA loans had interest rates high enough to be considered sub-prime and that to the pleasant surprise of commercial banks there were low default rates. Banks that participated in CRA lending had found, he wrote, "that this new lending is good business."

[mactastic]

Regardless of what numbers you use, my point was there is a significant level of support for McCain so this suggestion that some huge majority of the country is going to regard an Obama victory (should it occur) as some kind of glorious event is mistaken.
George W. Bush claimed a mandate to lead in 2004 with less than 21% of the populace voting for him.

Will you at least agree that if Obama meets or exceeds this level of support, that he will also have a mandate to lead?

My thoughts exactly.

The only thing I can add is that Obama will also have to deal with a vicious, vindictive Republican party which will do everything in its power to make sure he is not successful. You think the Ayers/birth certificate/etc. bullcrap is going to end just because the election is over? Think again. If the Clinton years are any guide, they will keep digging until they find several little nuggets of information that they can twist and distort, and then they will start calling for independent prosecutors and suchlike. The advantage Obama will have is that he'll have the majority of Congress watching his back, but a Dem majority is not guaranteed for the next four or eight years, and the Republicans still know how to manipulate the media. Even if they can't force an investigation of their imagined irregularities, they can sew doubt and hatred in the minds of the public.

That, as much as anything else, is why Obama needs to keep expectations realistic. It's not that his fans will think he's going to create miracles, it's that his critics will complain bitterly that he isn't.
Exactly. The same Republican party that could not be bothered for well over 4 years to investigate any of the numerous abuses that have been documented to occur under Bush's rule will suddenly re-discover their investigative powers.

Imagine if a potential Obama administration was caught deleting WH email records and using national party servers for their email. The GOP onslaught would be immense. Drudge would have "WHAT ARE THEY HIDING???" as the banner for months.

That being said, it was Clinton, not Bush, who first pushed for a loosening of restrictions on loans so "everyone can afford a home."

...

We have just had a perfect storm of a normal business cycle down turn combined with a serious financial crisis brought on by the sub-prime "scandal."

...

The housing bubble grew, and then, basically, Wall Street kept it growing by supporting it with funny money. Now that its popped, we all pay the price.
You obviously think this crisis is just a result of pushing subprime mortgages onto poor people and standard economic cycles.

That is simply not so.

The one thing anyone who has half a clue about the economy knows though, is that raising taxes on business and investment is NOT the way improve it.
I'm beginning to suspect you may not have half a clue about the economy if you don't recognize and include in your analysis the significant additional factors involved in this mortgage meltdown...

Now, you may disagree with neoclassical economic theory. You may think even distribution of wealth now is more important than creation of wealth. You may think socialism is grand. That's your prerogative.
So anything other than neo-classical economic theory is socialism? Nothing in between, eh?

My point is, this economic crisis, which is very bad, is nonetheless a blip in the grand scheme of things. This ONE crisis has not convinced me that its time to abandon the American pro-business, low-tax model and run to European socialism. I remain convinced that American style capitalism remains the most powerful engine for economic growth and that while it may provide a little relief short term, long term, "Obamanomics" will be an abject disaster.
And Reaganomics was such a smashing long-term success?

As for capital gains, LOTS of people invest, including people who aren't rich, so that will hit everyone.
Can you provide statistics for this assertion? And please don't include 401ks, as anyone with half an understanding of the economy would already know that these investment vehicles are taxed at the income tax rate upon withdrawl.

So please, define "LOTS" for us.

[Beric]

Since the OP hasn't chimed in since he/she started the discussion I can only see this as another Republican "bait and run" tactic.

There's pretty much no other course in these forums, seeing how actual posters are Democrats 20:1. I personally don't have time to respond to 20 posts. :rolleyes:

[freeny]

Hope don't pay the bills.

Wait, sorry...Obama's going to equalize everything. :rolleyes:

and this is your reasoning for choosing "no hope"? :confused:

[NT1440]

There's pretty much no other course in these forums, seeing how actual posters are Democrats 20:1. I personally don't have time to respond to 20 posts. :rolleyes:

you dont have to respond to every post, just back up opinions. The numbers dont matter.

but were all just ganging up on all yall dontcha know:rolleyes:

[Thomas Veil]

There's pretty much no other course in these forums, seeing how actual posters are Democrats 20:1. I personally don't have time to respond to 20 posts. :rolleyes:Oh come on, roughly 28 hours and 40 posts later, and the OP hasn't come back to the thread? Talk about "drive-by"! ;)

Anyway, addressing the topic of "killing" expectations (http://http://www.cnn.com/2008/POLITICS/10/31/obama.blitzer/index.html):

(CNN) -- Sen. Barack Obama told CNN on Friday that turning around the economy and energy independence are his priorities for 2009 if he is elected president.

In an interview with Wolf Blitzer in Des Moines, Iowa, Obama was asked to name his top priority from a list of issues, including taxes, health care, education, energy policy and immigration.

"[The] top priority may not be any of those five. It may be continuing to stabilize the financial system. We don't know yet what's going to happen in January," he said. "None of this can be accomplished if we continue to see a potential meltdown in the banking system and financial system. So that's priority No. 1: making sure the plumbing works."

Obama said priority No. 2 is energy independence:

"We have to seize this moment, because it's not just an energy independence issue; it's also a national security issue, and it's a jobs issue. We can create 5 million new green energy jobs."

Priority No. 3: Health care reform.

Priority No. 4: "Making sure we have tax cuts for the middle class as part of a broader tax reform effort."

Obama later expanded his discussion on how tax cuts relate to a bigger economic plan.

"The tax cut that I talked about may be part of my priority No. 1, because I think that's going to be part of stabilizing the economy as a whole," he said.

"I think we're going to need a second stimulus. Part of my commitment is to make sure that the stimulus includes a tax cut for 95 percent of working Americans. It may be the first bill I introduce."

Priority No. 5: Reforming the education system.If that's killing expectations, then I can only ponder what some of Obama's more ambitious plans were. Establishing a stargate between here and Alpha Centauri, perhaps? Solving global warming by encasing the Earth in a giant, plexiglass globe with a giant built-in HVAC system? Maybe finding a cure for conservatism?

[rdowns]

So that's priority No. 1: making sure the plumbing works.

Joe might have a future yet. :D

[Sun Baked]

Well, if he uses some of the money from shoring up the economy to lower expectations.

He should be able to give everyone in the US a spiffy new t-shirt that says, "It's all the Republicans fault if we screw up."

[mactastic]

There's pretty much no other course in these forums, seeing how actual posters are Democrats 20:1. I personally don't have time to respond to 20 posts. :rolleyes:
I hope you aren't suggesting that the playing field needs to be leveled in order for you to reach your maximum potential here? :p

[zap2]

It took a while to undo Clinton's work, I think we all know it will take anyone(Ron Paul,Marx, Obama, McCain, Barr, Nader, Kucinich, Stalin, take your pick!) a while to fix it.

[BigHungry04]

We hate France because they are the cause of all evil in the world today. Napoleon caused all this trouble in Europe in the 19th Century, which caused the Council of Vienna, which caused the formation of alliances. These alliances were one of the main reasons World War 1 started. World War 1 caused all of the issues in the Middle East, with the destruction of the Ottoman Empire. Then World War 2 was caused by the Treaty of Versailles, which was very hard on the Germans because the French wanted to punish them. Then after World War 2, the UN created Israel for the Jewish people to give them a homeland forcing out the Palestinians, which caused animosity amongst the arabs, causing the terrorism in the world today.

[iSaint]

and this is your reasoning for choosing "no hope"? :confused:

Can't see where I've told you who I'm choosing... :rolleyes:

[Peace]

We hate France because they are the cause of all evil in the world today. Napoleon caused all this trouble in Europe in the 19th Century, which caused the Council of Vienna, which caused the formation of alliances. These alliances were one of the main reasons World War 1 started. World War 1 caused all of the issues in the Middle East, with the destruction of the Ottoman Empire. Then World War 2 was caused by the Treaty of Versailles, which was very hard on the Germans because the French wanted to punish them. Then after World War 2, the UN created Israel for the Jewish people to give them a homeland forcing out the Palestinians, which caused animosity amongst the arabs, causing the terrorism in the world today.

Gov. Palin seem to gosh..umm...Gush over the French President.;)

[skunk]

We hate France because they are the cause of all evil in the world today. Napoleon caused all this trouble in Europe in the 19th Century, which caused the Council of Vienna, which caused the formation of alliances. These alliances were one of the main reasons World War 1 started. World War 1 caused all of the issues in the Middle East, with the destruction of the Ottoman Empire. Then World War 2 was caused by the Treaty of Versailles, which was very hard on the Germans because the French wanted to punish them. Then after World War 2, the UN created Israel for the Jewish people to give them a homeland forcing out the Palestinians, which caused animosity amongst the arabs, causing the terrorism in the world today.It all actually started with those bloody Colonies: if they hadn't got so uppity and started shooting people, Louis XVI wouldn't have allied himself with them to cause trouble to the British, the French exchequer wouldn't have been needlessly drained, the French Revolution wouldn't have happened, and that blasted little Corsican fellow wouldn't have got des idées au-dessus de sa gare and started rolling over European frontiers.

[BigHungry04]

It all actually started with those bloody Colonies: if they hadn't got so uppity and started shooting people, Louis XVI wouldn't have allied himself with them to cause trouble to the British, the French exchequer wouldn't have been needlessly drained, the French Revolution wouldn't have happened, and that blasted little Corsican fellow wouldn't have got des idées au-dessus de sa gare and started rolling over European frontiers.

France didn't have to support the USA. All they did was keep the British from retreating. We would have won in the end without the French.

[NT1440]

France didn't have to support the USA. All they did was keep the British from retreating. We would have won in the end without the French.

huh:confused:

I was under the impression that french troops helped us out a great deal.

[BigHungry04]

huh:confused:

I was under the impression that french troops helped us out a great deal.

They didn't help much. They showed up at the end of the war and surrounded Yorktown and prevented the British from retreating.

[Peterkro]

They didn't help much. They showed up at the end of the war and surrounded Yorktown and prevented the British from retreating.

Bit like the US in WW1 and WW2.

[BigHungry04]

Yeah the US did show up in 1917 one year before the end of World War 1. However the US did enter World War 2 in 1941, 3-years, 5 months and 29 days before the end of the war. The US played a bigger role in World War 2 than the French did.

[NT1440]

They didn't help much. They showed up at the end of the war and surrounded Yorktown and prevented the British from retreating.

Thus ending the war........

[CalBoy]

Bit like the US in WW1 and WW2.

I'd say that the US's influence was arguably greater in both of those wars over the French impact during the American Revolutionary War.

Parliament was already having a hard time keeping funding for the war going after the Battle of Saratoga, and much like Iraq today, public sentiment was against fighting it for long.

The French impact was also limited in terms of Yorktown. While their fleet did prevent Cornwallis from retreating temporarily, the French were quickly routed by the Royal Navy only days after the surrender at Yorktown, so it's probably better to say that the French were in the right place at the right time.

Their funds and artillery did help, to be sure, but in all likelihood the Americans would have still won.

Compare that to WWI where US troops refreshed British and French lines after German forces had come to within 70 miles of Paris, and WWII where the US fought against Japan in the Pacific, Italy in Africa (with the British of course), and the Germans in Europe (again, with the British and Russians), and the impact is arguably much greater.