I also noticed that he, like other Conservatives, are trying to fix the blame on Fannie and Freddie. Perhaps they should read the article in Newsweek (found via MSNBC) by Daniel Gross who makes the very appropriate point that no legislation required anyone to throw away lending standards. We have seen lenders go from 'verified income, verified assets' to 'stated income, stated assets' to 'no income, no assets.' You can follow a link in yesterday's post to get more of the recent history leading to our current problems. That article conceded that, perhaps, 10% of the loans involved scammers who got in under the last mentioned criteria. I will also concede that point. But then I have to ask: what about the other 90%? Could that have been driven by the same mentality that made executives of AIG think they could give themselves a nice little spa/resort vacation AFTER getting that $85 billion bail-out? Gross does not let Fannie and Freddie off the hook. He very properly points out that they were a part of a business culture that was (is?) corrupt to the core. This paragraph I think sums up the problem: "There was a culture of stupid, reckless lending, of which Fannie Mae and Freddie Mac and the subprime lenders were an integral part. But the dumb lending virus originated in Greenwich, Ct., midtown Manhattan, and Southern California, not Eastchester, Brownsville, and Washington. Investment banks created a demand for subprime loans because they saw it as a new asset class that they could dominate. They made subprime loans for the same reason they made other loans: They could get paid for making the loans, for turning them into securities, and for trading them—frequently using borrowed capital."
I was surprised to notice one difference between the candidates last night. McCain continued to present the economic crisis as one which revolves around credit and housing. Fix those, he seems to think, and the whole thing will be fixed. Obama tentatively broadened the discussion. For the first time I heard a candidate mention jobs and the fact that fixing the housing and credit crises requires fixing the jobs situation as well. I am amazed by how little the job market has figured into any discussion of the economy.
I just read Fran aka Redondowriter and she made me aware of a niggling thought that passed with only a brief moment's awareness last night: McCain's reference to Obama as 'that one.' I think it didn't register more strongly last night because I was already mightily irritated because McCain was, again, so vague in his comments. I have felt, as I have said before, that McCain thinks of us voters as mushrooms. His vagueness and lack of specifics is simply reflects his disdain for the voters he is asking to send him to the White House. However, this is the second debate in which McCain has demonstrated an utter contempt for his opponent. I have to ask if it is really possible for McCain to effectively work with someone for whom he has so little respect.
I rather liked one interesting departure from the tip-toeing around an unpalatable question that has been so prominent in all the debates to date. In the first Presidential debate both Obama and McCain tried to avoid giving a straight answer to the one about what of their pet projects they might have to scratch or significantly delay because of the economic crisis. This time, however, in answering the question about what sacrifices they would ask Americans to make, Obama actually engaged the question. I think his answer, centering on energy usage, was a good start. But only a start. We do need to question, examine ruthlessly, our energy usage and think about ways to reduce it. But we also need to examine, equally ruthlessly, our entire way of life and make firm decisions to cut out the waste. I don't think we, individually or collectively, have any clear idea of what is 'want' and what is 'need.' We want whatever we see and we want it now. If we can't afford it now, we buy it on credit. We don't question that want. We don't think about how that want really fits into our lives and whether it will really be useful. I think about the two PDAs I acquired before I learned that the damned devices don't fit into my life, don't make my life easier or more efficient. They are taking up space in my drawer. Of course, if we all start examining our buying habits to weed out unaffordable wants and subjecting our needs to standards of thrift and efficiency, our consumer culture will have to change radically. Not a bad thing, I believe.