Evaluating the Response

Friday, September 19, 2008

NY Congressman Gregory Meeks (D-6th), a member of the House Committee on Financial Services, discusses Congress' response to the financial crisis. Then, David Leonhardt, economic columnist for the New York Times, and Diana Furchtgott-Roth, senior fellow at the Hudson Institute, update the latest.


Diana Furchtgott-Roth, David Leonhardt and Gregory Meeks

Comments [94]

PJ from Wall Street

The problems of Fannie & Freddie were caused largely BY regulation, not the lack of regulation. If we want a market economy, we need free markets to work.

Sep. 20 2008 11:08 AM
mc from Brooklyn

I think it is interesting that the Bush/Republican talking point is now that government should stay out unless there is a crisis like now." We are here now because the investment banking industry convinced the government that they don't really need regulation. Now that they have pissed in the pool they are looking to the government to help out because of course, piss in the pool hurts everyone. Expecting Wall Street not to act greedy is like asking a fox not to eat chickens. It is up to us to provide proper oversight, whether they like it or not.

Sep. 19 2008 01:40 PM
chris_52 from nyc

To # 81 -- I have looked at you blog -- I will read more carefully later BUT, I definitely agree that we need a tax on the top 1% In recent years worker productivity went up 18% -- I didn't get an 18% raise, did you? Who do you think got that money? AND I have to say, if they let the CEO's of these failed institutions walk away with multi-million dollar packages, if stripping out that clause is not a rock solid requirement for any bailouts, how can we, the taxpayer have any confidence that government is really working for our interests?

Sep. 19 2008 01:23 PM
SF from NYC

Brain Lehrer is a poor excuse for a journalist. Every time i listen to this program I realize the the lack of questions which challenge and force the guests to explain their positions on a particular subject.
This show needs a new name.....

Sep. 19 2008 11:44 AM
Graham from Paris

RE : "[87]jrd"


Sep. 19 2008 11:40 AM
Leo Queens from Queens

To JRD: you say that the Gov't has to buy these assets - What assets? - The real estate mortgages being held by banks (80% of them are being held by Freddi and Fannie which are gov't owned now)? Only the defaulting ones or the overwhelming majority that are current?
Or are you talking about the TRILLIONS of 'assets' created by these financial institutions for 'derivative products' that don't really exist?
Subprime mortgages are being used as the scapegoat for a much more serious problem with US capitalism - The fact that 80-90% of the 'assets' being held by these financial instituations and funds DON'T EXIST!> The sub-prime problem (which is Real) is minor compared to the bigger problem. - The sub-prime crisis was just a match thrown into the putrid, fuel-soaked garbage being held by these institutions as 'ASSets'.

Sep. 19 2008 11:36 AM
KC from NYC

jrd: I'm definitely with you, re: no one on the left is actually represented in this allegedly left/right debate. This is typical of the mainstream media, where Phil Donahue was too "radical"(!) for MSNBC. You get a relatively objective observer from the center, verses a spokesman for the right. And that's the "debate".

As for my "how is this good for me" comment, yes, it was a bit hyperbolic, but my intention is this: Keep reminding people that this isn't the government doing this bailout, it is us. If this bailout fails to change the existing power structure, it will be a gigantic victory for the criminals at the top, and it will be our fault. I have a sinking feeling that the taxpaying public is going to dump all this money in and ask nothing in return; our democracy has reached that farcical point.

Sep. 19 2008 11:33 AM

Inspector Bucket:

The lack of diversity is exactly what I'm complaining about.

A right-winger and a reporter is not a diversity of views.

Sep. 19 2008 11:26 AM
Graham from Paris

Mr. Lehrer,

In my little battle _against_ the notion that you have little else but contempt for the people who comment here in your programme's blog, the _favorable_ view of you is now seriously losing ground.

Sep. 19 2008 11:23 AM
Inspector Bucket from Manhattan

To jrd-

No, the question is why you can't tolerate a diversity of views. Brian's commitment to this is what separates him from the rest of the pack.

Sep. 19 2008 11:22 AM

Jeff and KC:

Unfortunately, these claims are accurate. If the government doesn't buy these assets, the entire financial system will collapse and the U.S. will fall into a multi-year depression. Insured bank deposits might or might not survive the crash, but that alone wouldn't be enough to avoid a great deal of misery.

The only remaining question is, will the bailout achieve anything for ordinary people and ensure through regulation that this sort of thing won't happen again, or will it simply indemnify shareholders and executives and allow them to perpetrate another fraud 5 or 10 years from now?

With the Bushies in power, you can count on the latter.

Sep. 19 2008 11:21 AM
Bryan Jacobson from Nyack, NY

Leo great minds think alike. Hold this woman accountable for her ridiculously placeing blame on poor people. Hmm, I seem to have heard similar ridiculous explanations from RUSH LIMBAUGH!

Sep. 19 2008 11:18 AM
Steve Lazer from New Jersey

Lawmakers have personal stake in the outcome of the financial crises:

Sept. 19 (Bloomberg) -- The market storm that brought down Lehman Brothers Holdings Inc., American International Group Inc. and other pillars of U.S. finance may have also blown holes in the portfolios of House Speaker Nancy Pelosi, Senator John Kerry and more than 50 other members of Congress.

Pelosi, in her most recent financial disclosure form, reported that her husband owned between $250,000 and $500,000 of stock in AIG, which ceded majority control to the U.S. government this week in exchange for $85 billion of loans.

Kerry, the 2004 Democratic presidential nominee, disclosed that his wife, Teresa Heinz Kerry, had more than $2 million of AIG stock at the end of 2007, when shares were worth $58.30. AIG has fallen 85 percent this week to close yesterday at $2.69. The lawmakers' aides didn't respond to calls seeking comment.

Altogether, 56 senators and representatives had stakes in AIG, Lehman, Fannie Mae, Freddie Mac, Bear Stearns Cos. or IndyMac Bancorp Inc. -- some of the biggest casualties of the market bloodbath, according to the Center for Responsive Politics. The most recent annual disclosure filings list investments as of Dec. 31, 2007, and reveal the size of holdings only within a range of values. Lawmakers may have sold shares since then.

Sep. 19 2008 11:17 AM
mark Brown from AND

comments #36 yolanda.. har har har my wench, tis certainly a load of wishing there.

# 41: Greg : check out MY blog... I say that again and again (
#45 'voter': TOO big to fail:
Blame PHIL Graham policies..string him up by the scrotum... except who is he advising again? oh John McCain's financial advisor...

'nother reason to vote McCain?

#47. inquiring minds: My proposals to:
a) remove the current Alt. Min. Tax, and institute a new b) Minimum Millionaire tax
those with income OVER 5 million dollars will pay a MINIMUM of one percent of their gross income, rather then being able to WEASEL out of it. Go look HERE at my blog:

the top 10,000 taxpayers is way too high, you're right.

Sep. 19 2008 11:17 AM
Steve Thompson from Edison, New Jersey

Now, the the Government (read Tax Payer) is the owner/employer of all of these various companies, do we get to set the salary of the top execs? Can we say "No More" to the greed at the top?

Sep. 19 2008 11:16 AM
Bryan Jacobson from Nyack, NY

The commmentary of Diana Furchtgott-Roth from the neo-con Hudson Institute blaming this crisis on low income hoemowners and Freddie and Fannie is laughable. The ordinary mortgage markets where basic protections are in place and there is a reasonable debt to cash ratio is not the cause of this. In fact most of these federal programs have rules that would prohibit taking over any of this bad debt that was offered under irresponsible standards (no down payment, no income verification, etc., etc.)

The securitization of this bad debt which had high returns but even higher risk was too profitable for the greedy ibanks to pass up. These institution needed to follow some basic capital requirements to balance out all of this risky debt. Only better regulation will prevent this horrible irresponsiobility in the future.

Fannie and Freddie did get into this high risk derivatives game also but ultimately they are back stops for the mortgage market not the cause of this meltdown.

Sep. 19 2008 11:16 AM
KC from NYC

"If we don't bail them out, all of us get hurt."

I am very, very tired of hearing that. So if I fund these larcenous millionaires in their efforts to maintain a status quo that keeps them on top, that's good for me? Explain that, please.

Sep. 19 2008 11:16 AM
Jeff from Columbia University


I've been hearing that regular investors are protected from the big wall street collapses. How does this work. Am I really protected?

Sep. 19 2008 11:15 AM

Why does the Brian Lehrer Show, and the American media in general, have such a difficult time understanding that there's no balance in opposing a NY Times reporter against a former Bush administration official who's paid by the Hudson Institute to advocate right-wing views, and who would lose her job, if she failed to do so?

Is it that the show's producers share the right-wing assumption that all reporters are liberals, so opposing a right-wing propagandist against any reporter in the land is "balance" enough?

There aren't many left-wing economists around, because they have a hard time getting academic appointments, if they don't accept "free-market" dogma and the so-called "Washington Consensus". But even WNYC should be able to find one or two?

Sep. 19 2008 11:15 AM
Graham from Paris

Isn't this the same President who claimed solemnly that we were going to take care of things in Iradq? And, remember? He boasted that if necessary, Americans would do it without any others' help.

How'd that work out?, I wonder.

Sep. 19 2008 11:11 AM
lester from wash hts

diana's comment that part of the sub-prime problem was brought about because of a certain amount of low income housing requirements was not appreciated. many of the people legislation was enacted to support and help were DUPED by others who knew these loans would never be able to be repaid, and further, people who made tens of thousands if not hundreds of thousands of dollars on the backs of those people for whom the zero or no down mortgages were designed. shame on her for scape-goating the very people least able to have any impact on this crisis and for at least not explaining her statement.

Sep. 19 2008 11:07 AM
Phelim Dolan from village

I'm glad i'm not the only one incensed by her comments. They are just factually wrong. Why does she get the right to lie? That's not journalism.

Sep. 19 2008 11:04 AM
Leo Queens from Queens

I am really angry Brian that you have this woman making outragous statements and you are not even challenging them.
She is saying that a requirement that banks make loans to low income home buyers is the cause of this problem? that is BS!!. OUTRAGOUS> you are using poor people as scapegoats!!.
The reason for the collapse of the housing market is the pressure on the part of financial institutions to force all of these irresponsible refinances and mortgages with 0% down; no income verification and inflated prices. The regulations for the 90's which she claims caused this did not ask banks to look the other way when issuing mortgages - It did not ask banks to make reckless mortgages.
And AGAIN - if you add up all of the mortgages given to poor families ( the ones being paid and the ones defaulted on) this would not amount to even a Billion dollars!.
Does $1B = the $1Trillion in the losses of the values of the top 26 financial institutions. I think not.
With people like her doing the math one can EASILY see why where we are!!

Sep. 19 2008 11:03 AM
Jesso from White Plains

Give me a break. This woman is a complete shill for the administration. I also find it curious her assertion that "everything is doing well on Main Street" in light of her own think tank's headline "Wall Street Meltdown is Knife to the Heart of Main Street."

If you're going to spin your bs, you should at least get on message with your own people!

Sep. 19 2008 11:02 AM
Phelim Dolan from village

I can't believe you let Diana whatever her name was blame the sub-prime crisis on the community reinvestment act. Tough to leave that unchallenged.

Sep. 19 2008 11:02 AM
Voter from Brooklyn

Unbelievable. This speech was just like every speech we heard on terrorism and Iraq.
Now is not the time to lay blame, there will be time for that later…
The situation is critical, action is needed now…
Congress should act now to pass legislation with no conditions, add in, thinking, etc…
No time for partisanship, just do what I say and send me the bills or powers I’m telling you to.

Sep. 19 2008 11:01 AM
Matt from Manhattan

According to this, the SEC (and presumably the person running it) had no oversight on some of the things that fell through.

Sep. 19 2008 11:01 AM
Dan from Bridgewater, NJ

Where is the discussion of holding the financial sector employees (executives) accountable. The largess of their salaries and bonuses are as legendary as they are hyperbole. Why are we (the taxpayers absorbing the losses that have generated their compensation. It seems that we continually nationalize losses but allow profits to remain privatized!!! If a bailout is needed, I say go for equity and get a handle on the unrealistic compensation even if it means special segment compensation taxes!

Tired of wall street plundering!

Sep. 19 2008 11:00 AM
Susan Wheeler from West Village

Did she just blame this crisis on affirmative action lending?????

That truly takes the cake.

Sep. 19 2008 10:59 AM
Matt from Brooklyn

When you say Republicans tried to regulate Fannie and Freddy, what exactly did they try to do? And what was the Democrat objection?

Sep. 19 2008 10:59 AM
Greg from the Bronx

I cannot believe that your guest, Diana Furchtgott-Roth, just partly blamed the community reinvestment act for this mess. CRA ended redlining. The fact that banks decided to do crappy lending was not brought on by CRA. CRA loans perform very well. Tell her to do research.

Sep. 19 2008 10:59 AM

is there a new requirement that this show have a fair number of right wing ideologues? this woman is too much.

Sep. 19 2008 10:59 AM
David from Queens

MInority lenders are rsponsible for the crisis - what a CROCK

Sep. 19 2008 10:59 AM
Graham from Paris

_WHO_,I wonder, believes a single word of Bush's absurd attempts to reassure the public?

Surely this is the very _last_ guy on earth who has any place offering reassurances.

Sep. 19 2008 10:58 AM
Stuart Kaplan from Teaneck NJ

The President says that SEC chairman Cox is one of the people involved in controlling the crisis. Senator McCain has said he would fire Cox although the President cannot do this unless the SEC chair is involved in some criminal activity.

Sep. 19 2008 10:58 AM

Someone went to Communist China and came back with something besides an Olympics mug.

Crony Socialism, anyone?

All that's missing are the roads and dams...

Sep. 19 2008 10:58 AM
SuzanneNYC from Upper West Side

Bush making the best of situations he created himself. Exactly Right. And maybe not doing such a great job but somehow muddling through.

Sep. 19 2008 10:58 AM
Yolanda from Park Slope

I do believe it's high time to remind the voters of McCain's role in the Keating Five S&L scandal. Mr. McCain is trying to portray himself as the best person to reform the system, but it's useful to look at his entire deregulatory stance throughout his career. The Keating Five episode must not be whitewashed or airbrushed from his history. You know what they say about not learning from history...

Sep. 19 2008 10:57 AM
Steve (the other one) from Manhattan

"Those who violate these rules will be caught and persecuted."

Heh - now that's some serious Preznitin'. It's hard work!

Sep. 19 2008 10:57 AM
KC from NYC

Christopher Cox should be fired; it's the one thing McCain's said that I agree with. Cox has been nowhere, letting everybody else clean up the mess he made.

Sep. 19 2008 10:56 AM
Bobby G from East Village

Bush has no credibility. The "free market is dead! It isn't free any more; it's costing us (tax payers) a BIG bailout bill.

How about, from now, on a fair market ethic from government and business.

Sep. 19 2008 10:54 AM
scnex from harlem

What is interesting in this story, which has become the mantra of 'white intellect'; echos in the earlier guests concepts, for which the very same people not knowing what they were doing, better yet did not understand what they were doing- are the same people that are suppose to fix that what they do not understand.

Sounds a lot like the environment, but when that downturn becomes reality there will be no 'bale-out'; it will be extinction... This your (white) ideas:

Well, 'we' are ignorant that is ok, because we are of 'white mentality', this is ok, because we will fix what we do not understand.....

Sep. 19 2008 10:53 AM
John from Qns.

A new bushism: "They will be caught and persecuted."

Sep. 19 2008 10:52 AM
mark Brown from AND

presidental slip up...

if you perform illegal financial transactions, you will be caught and PERSECUTED!

good one 'w'

Sep. 19 2008 10:51 AM
Marna Garwood from Brooklyn

Every mortgage holder deserves to have a contact to discuss renegotiating their mortgage. Interest only - not principal

It is absolutely necessary that the golden parachutes be withheld. Recent already received bonuses should also be on the table for revocation. (I don't care that contrcts are involved; contracts have 2 sides and the executives didn't deliver their side.)

Sep. 19 2008 10:51 AM
mark Brown from AND

TO Quote the President:

We need to perform ROOT-Cause Analysis on the cause of the problem

THE PROBLEM IS NOT mortgage based securities

BUT the concept of the CDO (collateralized Debt Obligation)

Which will become apparent when the NEXT SHOE drops in the market (I think only 25% of the problem has revealed itself so far...)

markbnj @

Sep. 19 2008 10:49 AM
Inspector Bucket from Manhattan

Listening to the collective financial "knowledge" of Congressmen Meeks and Wiener, I understand how we got into this mess....and how unlikely it is that we will get out of it with these men as the stewards of our economy.

Sep. 19 2008 10:47 AM
Inquiring Minds

@32 Mark

"INCREASE TAXES on top 10,000 earners MINIMUM 1% alternative millionaire tax..."

This is ANTI-democratic.

As it is less than HALF of the voters pay ALL of the taxes.

The top FIVE percent pay SIXTY percent. What kind of democracy do you have when most of it "beneficiaries" have no "stake in the game"?

Sep. 19 2008 10:46 AM

Please correct Mr. Leonhardt statement regarding McCain"s actions re Fannie Mae & Freddie Mac, McCain was warning congress in 2003 & 2005 about excesses in these institutions and it's on the record! Obama has Franklin Raines & Tim Johnson as advisors and they are former heads of Fannie & Freddie how caused this mess! The Congressional Black Caucus successfully lobbied Freddie & Fannie to lower their lending standards so people who would not normally qualify would participate in the American dream!

Sep. 19 2008 10:46 AM
Voter from Brooklyn

Interesting. I suggested the exact same thing Mr. Leonhardt said to a friend last night. The reason why we have institutions that are “too big (or important) to fail” is because of a lack of regulation. Now, because of the irresponsibility of government to regulate “free markets” that everyone knew were imperfect or just plain jokes, we have a mélange of financial devices that, if they failed, would destroy the economy. The government should offer bailouts, bailouts with extensive regulations that would serve to untangle this mess and downsize these financial institutions so in the future, when this happens again (the bad actors in this will not learn any lessons) the government will be in the position to let anyone at fault fail, as they should.
As for if home owners should be bailed out... It’s a difficult question, however, Americans need to learn that responsible home ownership isn’t truly as universal as they’ve been lead to believe.

Sep. 19 2008 10:44 AM
mark Brown from AND

LOOK... THE GLASS STENGEL act needs to be re-instated...

AUGH... will someone please go read my blog and comment on it ??

YES we need re-regulation... ThAT's the MAJOR problem here

Sep. 19 2008 10:44 AM
anonyme from NY NY

everybody should see this video and pass it along if you want:

- just scroll down to see moneyasdebt. never mind the rest of the blog if it's out of your purview, the blogger didn't make the video,and reviews are good:

"The miracle we needed! Money as Debt is a masterpiece. Brilliant and of infinite value to mankind."Dr. Edward Hamlyn, British Association for Monetary Reform

This colorful and very entertaining video is the best I have ever seen to explain the problems and the solutions necessary for true monetary reform. Richard Distelhorst, Chairman Burlington, Iowa Chapter, American Monetary Institute.

Sep. 19 2008 10:43 AM
KC from NYC

If this doesn't "redefine the nature of American capitalism", it will mean we have failed miserably.

We should be demanding that this "redefines the nature of American capitalism", because, again, this is our money. The assertion that we should drop a few billion dollars and everything should just go back to what it was? That is an outrageous statement. Shame on your guest.

Sep. 19 2008 10:43 AM
Greg from the Bronx

The root cause of this whole problem is the securitization process because it removed the incentive for the lender to make loans to people who could actually repay them. The securitization process is what fueled the entire housing bubble. This is a problem created by the private sector, and the government (led legislatively by Phil Gramm) let it happen. Putting all this bad debt on the taxpayer is a bad idea, and will hurt our nation in the long run.

If there was a way to write down the debt on homeowners in trouble, we could slowly deflate the bubble letting both the corporate side and the homeowners share the burden of the drop in value. Meanwhile, homeowners would be able to pay their mortgages letting people stay in their homes, stopping home values from dropping further, while letting homeowners make their payment (meaning the investors get paid, just at a lower interest rate). See -- everyone shares the burden except for the taxpayers as a whole!

Sep. 19 2008 10:43 AM
joy-us from NYC

I think we should only protect big business.

Individuals ought not to get any benefit for being citizens. Government programs that help individuals should be ended.

Government should only exist to enhance the profits of our aristocracy.

Sep. 19 2008 10:43 AM
SuzanneNYC from Upper West Side

You vetted Obama's comments on the economic meltdown. What about McCain's. Maybe it's because he hasn't made any specific proposals just I'm right and my opponent is wrong. And oh yes, could someone please remind us of the Keating 5 -- savings & load scandal? Didn't McCain have a rather prominent role in this? We've been through this before -- all those institutions were bailed out -- EXCEPT a bank in Harlem which none of NY's elected officials could save. Talk about your double standard. Please revisit this.

Sep. 19 2008 10:42 AM
Nick from New Rochelle

Do the American people know where all this bailout money is coming from? I dont think they realize that by socializing our finacial system we are exposing ourselves to a 5 trillion dollar liability in just AIG alone. Do we really want to curb capitalism at the expense and risk of the american taxpayer?

Sep. 19 2008 10:42 AM
Demetri from brooklyn

this guest doesn't make any sense - why would a central government function be to bail out the financial industry and not be to provide health care?

Sep. 19 2008 10:42 AM
Yolanda from Park Slope

Wouldn't it be a nice gesture of goodwill if those who made off with millions and billions of dollars in profit deposited their ill-gained earnings into a fund that would help homeowners in foreclosure, for instance?
Think it would fly?

Sep. 19 2008 10:41 AM
Dat from Manhattan

Hi, honest question for someone that understands economics better. I heard someone (I think Greenspan) say that this isn't going to stop until housing stabilizes. Yet I hear more resistance to home owner bailout as opposed to these corporate bailouts. Why wouldn't you focus fixing it at the root if what Greenspan says is accurate?

Sep. 19 2008 10:40 AM
Lonnie from Brooklyn

A Lot of the homeowners facing foreclosure are NOT victims. Some bought more house then they could afford. Other's simply signed the dotted line for what they thought was an easy cash-out on the entire value of their house. They FOOLISHLY thought that that $300K would slide into their bank acct with no strings attached.
They should eat their crow. They can move out and RENT an APARTMENT.
To Bail these people out is to see them laugh in our faces as they run to the Bank.

Sep. 19 2008 10:40 AM
mark Brown from AND


Getting the COURTS to update the BANKRUPTCY laws
to let them order re-negotiation of the mortgage

wont work BECAUSE of the DIRTY tricks that the BANKING industry did to the consumer bankruptcy laws

We need EVERYTHING to be changed.


ALL the problems are INTER-CONNECTED
We need to juggle ALL of these TOGETHER

INCREASE TAXES on top 10,000 earners MINIMUM 1% alternative millionaire tax...

Sep. 19 2008 10:40 AM
Nick from New Rochelle

I believe that the American People are being mislead into believing that the American government has the money to bail out all the financial firms. They probably don't know that by taking over A.I.G. that we now have a possible 5 trillion $ debt on our hands, us the taxpayers. It is very important to keep in mind where this money is coming from, and evaluate whether or not we the american people are confident that this is a viable option

Sep. 19 2008 10:39 AM
john from upper west side

I suggest that NYPR find one of the traders in the type of securities that have caused the problem to explaine their actions and minipulation based on market models in real time that monitor world markets but do not monitor the trades between traders as they bundle up minllions of dollars paid for with insured borrowing over time... There is no way for the public or the finance committee understand the cancer, like a desease that consumes itself. If you close the hospitals and kill the doctors the patients will die for sure.

The finance committee controled by Barney Frand were well meaning but irresponsible. It was another way to create public housing without calling it public housing. Individual ownership is not public housing but assumes responsibility. Reality is difficult to deal with head on.

Sep. 19 2008 10:38 AM
Leo Queens from Queens

The answer to your question Brian: - Yes the Fed should get in to help because there is no other option - These financial institutions are made up of thieves, like your guests, who have pocketed millions through the creation of fake 'products' and 'assets' and they have now realized that they cannot keep the farse going. As a result the market is collapsing.
The Fed needs to step in and try to bring the markets back to reality and punish the individuals responsible for this and institute real oversight and regulation. These thieves should be stripped naked and packed to planes with one-way tickets to Guantanamo.

Sep. 19 2008 10:37 AM
Tom from Upper West Side

Does anyone see the irony of another "small-government" Republican administration's again expanding and enlarging the federal beaurocracy?

Sep. 19 2008 10:37 AM
Craig from Astoria

We keep hearing this conversation about public policy based on so-called value judgments.

We could not save Lehman Brothers because of "Moral Hazard". Should we help people with mortgage problems? Well – are they in trouble "through no fault of their own"?

What would a pragmatic public policy be if we considered the situation without the color of moral judgement?

Sep. 19 2008 10:36 AM
John from Brooklyn

With all the talk about how this proposed legislative response mirrors the federal bailout of the S&L industry in 1989, can someone please say "Keating Five"?

After all, it was the Keating scandal -- and, lest we forget, John McCain was one of the Five -- that brought the S&L crisis to a head and prompted the 1989 legislation.

Ironically, McCain now proposes, as a response to the current crisis, a new oversight bureaucracy called the "Mortgage and Financial Institutions Trust" -- and he cites as his model the Resolution Trust Corporation created by the 1989 law to deal with the S&L crisis.

But McCain himself refused even to CO-sponsor that 1989 legislation.

Adding to the irony, the sole Senate sponsor of the legislation -- Don Riegle, a Democrat -- was one of McCain's fellow Fivers.

McCain's refusal to join Riegle in sponsoring the 1989 legislation is a check on his repeated claims to be a bold bipartisan reformer.

Sep. 19 2008 10:35 AM
Mike from NYC

Why do you keep calling it a bailout? It's a loan, and all experts agree that the taxpayer will get their money back.

Sep. 19 2008 10:34 AM
Leo Queens from Queens

Does your guest REALLY Belive that the cause of this meltdown is due to a couple of million people who bought houses they could not afford (most were duped)? - The default on these sub-prime mortgages are not the cause of crisis. The cause of this crisis is that these companies have very inflated balance sheets with all of these 'assets' that DO NOT EXIST>!
These are derivatives taht are nothing more than billion dollar 3-card monty!

This Woman also claims that there is this program to help homeowners to refinance - This program that was passed is Strictly VOLUNTARY on the part of the banks - It is helping somewhat but not as much

Sep. 19 2008 10:34 AM
KC from NYC

The government "probably should" help families out?

OK, I am not one of the people who signed onto this crazy bubble, but this phrasing reminds me what's driving me crazy about the mainstream media's (NPR included) coverage of this:

It's not just the government's money; it's OUR MONEY.

We should be getting everything we want from AIG, because WE now own it. "We" couldn't afford a single-payer healthcare system (the system preferred by a majority of Americans), but we can afford this? Hey, I've got a great idea for what we should demand next from AIG, in exchange for all our money that we just gave them.

Sep. 19 2008 10:34 AM
mark Brown from AND

Oh Brian/Staff:

You need to make sure that these (partisan) people (like this woman) Identify themselves as such (let me guess.. Heritage foundation??) gee.

Sep. 19 2008 10:33 AM
Alex from bk

Are we still in a free market democracy? This is a bandage on a bullet wound. The Fed should be held responsible for the mess it has created. Or maybe the fed wants to inflate the dollar to point of non-existance. They'll soon convince us to embrace the AMERO. (Mr. Bernake does not want to answer any questions about that though)

Sep. 19 2008 10:32 AM
Steve Mark from NYC

On a going forward basis, State Bar Associations should create a pro bono division consisting of volunteer lawyers to help those kind of homeowners who went forward without knowledge of what they were doing and didn't have the money or awareness to hire an attorney.

Sep. 19 2008 10:31 AM
Alan from Long Island City, Queens

The government is buying all the toxic debt to bail out these venerable financial institutions.
Should we not demand that the government actually take over the entire assets of these institutions since by their own admission, they are no longer viable on a market basis? This way the taxpayers would not only get the bad debt but also the good assets.
Should not the criminals who run these institutions to the ground be rounded up and put on trial? (stripped off of their golden parachutes?)
Why can't we have an emergency bail out to fix the public education system in NY? or blighted communities in East New York, or the collapsing national infrastructure or to create good union jobs?

Sep. 19 2008 10:28 AM
Peter from Flatbush, Brooklyn

If there would have been some meaure of fore-thought and pro-activity our government should have been able to see the sub-prime fall out on the horizon. If they had acted to freeze rates on subprime mortgages and allow home-owners to re-negotiate affordable loans we could have stayed out of a large part of this mess. The willingness of washington to inject funds to bail out banks and lenders supirses me, when this mone copuld have been granted to home-owners to help them cover some of the loan expenses during the re-negotiation.

Sep. 19 2008 10:26 AM
Bobby G from East Village

Where is the gov. supposed to come up with all this bailout money?

Don't we have the biggest deficit ever? Don't we have the biggest national debt ever? Aren't we spending $10 to $15 Billion every month on Bush's wars? Aren't the baby boom Medicare and Social Security obligations coming due?

What will this do to our national solvency? What are the consequences? Talk about living within your means!!!

Sep. 19 2008 10:26 AM
Inquiring Minds

in the interest of bipartisanship and putting the blame (equally) where it belongs...

US House Committee on Financial Services

Chairman, Barney Frank (D-MA)

top five industry donors:
Real Estate $179,851
Securities & Investment $168,900
Lawyers/Law Firms $154,018
Insurance $126,298
Misc Finance $52,700

data from

Sep. 19 2008 10:24 AM
Demetri from brooklyn

The financial industry goes from record profits from 2005 to 2007 and now the taxpayer needs to bail them out - let them hang and let the chips fall where they may

Sep. 19 2008 10:22 AM
AWM from UWS

So, you gotta sift through $60 trillion in toxic and intangible debt and find and extract something with potential value, something worth risking between $800 billion to $1 trillion of taxpayer money on? Good luck, Hank.

Sep. 19 2008 10:21 AM
mark Brown from AND


We Need to get a LAW to REPEAL the recent industry re-written BANKRUPTCY laws.

The next part of the crisis will be consumer credit hitting the decks.

Sep. 19 2008 10:21 AM
shc from Manhattan

Assuming we're all able to get through this (whatever that means), does anyone see the people responsible for this getting punished in some way, like the past folks who got punished for falsifying books or sending around emails saying they did something they shouldn't have? Or are there just too many people involved for this to be a realistic question, especially with government taking such a large role? Of course, I am asking this of a system that pays incompetent leaders to leave with several million dollar packages.

Michael Greenberger on Fresh Air the other day put it succinctly: America privatizes profits and socializes losses.

Sep. 19 2008 10:20 AM
Demetri from brooklyn

privitizing profits; socializing losses
if the children don't get punished, they will do it again. no discussions of responsibility. This is all making me sick. The lack of responsibility is embarrassing.

Sep. 19 2008 10:18 AM
Leo Queens from Queens

Congressman Meeks - any BAILOUT should be targeted to help taxpayers and legitimate businesses - they money laundering institutions should not get a free ride after pocketing billions through these non-existing 'products'. ANY Proposal should ban and make illegal things such as Naked short selling and some of these other dubious 'derivatives'.

Sep. 19 2008 10:16 AM
Inquiring Minds

in the interest of bipartisanship and putting the blame (equally) where it belongs...

US Senate Committee on Banking
Chairman, Christopher J. Dodd Chairman (D-CT)

top five industry donors:
Securities & Investment $4,245,796
Lawyers/Law Firms $1,976,063
Insurance $1,416,972
Real Estate $1,262,791
Commercial Banks $850,544

Sep. 19 2008 10:15 AM
mark Brown from AND

banning NAKED short selling would be SOCIALISM.

People have accused ME (

of being a socialist. (JUST like FDR! and the NEWDEAL)

Sep. 19 2008 10:15 AM
Leo Queens from Queens

Why is the SEC now temorarily suspending Short selling for some financial institutions when this did not work before? -
The SEC had suspended short selling this spring for 19 key financial institutions. - Why is this not suspended for ALL companies or institutions traded?
Also, - why isn't NAKED SHORT SELLING made illegal? this is blatant speculation and gambling - What benefit does Naked short selling bring to the credit and investment markets as you are essentially selling shares that are not owned? - We have allowed organized crime to take over our financial and credit institutions which were originally created to pool and facilitate money for legitimate businesses needing capital to invest.

Sep. 19 2008 10:11 AM
mark Brown from AND

YES: (#3) BUSH=Hoover and ??? (not McCain) = FDR.

And MY proposals (see blog will wind up being a GOOD start to rebuilding the country

I said we were facing a DEPRESSION and we're about a quarter of the way there.

Wait until the CONSUMER credit (CDO's) HIT

That will make THIS look like a PIECE of CAKE!!!

Sep. 19 2008 10:11 AM
Steve Mark from NYC

From Wikipedia:

Robber baron is a term revived in the 19th century in the United States as a pejorative reference to businessmen and bankers who dominated their respective industries and amassed huge personal fortunes, typically as a direct result of pursuing various anti-competitive or unfair business practices.

What's old is new again.

Sep. 19 2008 10:10 AM
RA from CT

No government bailout without paying a penalty!

If the government buys out the "toxic" debt, then the institutions that get this relief should be required to pay the tax-payers back. Structure it as a loan or warrent or however. In 2-3 years, they have 20 years to pay it all back. With an interest. Banks and financial institutions aren't so generous when the people get into debt. Time for them to be subject to the same rules.

Sep. 19 2008 10:10 AM
CH from Staten Island

With the alleged suppression of voters in the battleground states of Michigan, Ohio and Wisconsin over "caging" practices (the list of foreclosed homes to target voters, lack of readiness for the verification of newly registered voters, and the "Do Not Forward" mailings designed to create mayhem on Nov.4) it shouldn't be surprising that the right doesn't want to help keep voting families in their homes, especially in areas where they are more likely to vote economy vs. national security issues.

Sep. 19 2008 10:08 AM
Peter from Flatbush, Brooklyn

Where is the Preisdent? I assume there is a NOVEL about a Goat and he is engrossed.
I know he spoke yesrerday, I was listining to this show when I sneezed, the earbud fell out of my ear, I took a quick phone call and when I came back, 1 mintue and 30 seconds later, President Bush was finished and wasnt taking questions.
I litterally sneezed and miss the President address the nation on the economic crisis.

Is it me or is Presdient Bush James Buchanan mixed with Herbert Hoover.

Sep. 19 2008 10:04 AM
Charlesbklyn from Park Slope

I cannot believe this republican administration has transformed America from a capitalist system to a socialist system in two days. What happened to the idea of risk reward and the market system? This is a shameful and pathetic use of taxpayer dollars to ensure the weathiest Americans and corporations are relieved of their responsibilities in this matter. We are bailing out the rich at the expense of the middle class. What in the world has happened to this country?

Sep. 19 2008 10:02 AM
Chris from Long Island

This is a bad, bad, bad idea. Sure the markets responded positively. The financial institutions, run by those very smart people, are getting to pass off their ill concessive, very profitable, illiquid assets onto the tax payer. Does this sound like a good idea?

Realize this, if this plan does go through and the government and tax payers end up owning these assets, and the properties associated with them. As the newest owners, we will be responsible for the various taxes (property, school and special districts) for those properties. Does this sound like a good idea?

As free marketers, the financial markets wanted government to have a hands-off attitude while they made these decisions and profits, now the government should remain hands off. I think Sen. Schumer, who I agree with rarely, is partially on the right idea. Force these financial institutions to restructure these loans so that the buyer could afford to live there. They were so intelligent to believe that the fundaments behind these assets were sound and profitable to create or buy them. They should be prevented from selling them to someone else.

Let the free market take care of this situation, they made these decisions; they should live with these decisions and they should fix these decisions -- themselves.

Sep. 19 2008 09:39 AM

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