Bank Collapse, Fannie Mae, Freddie Mac and the View From Neocons

by jhwygirl

Don’t want our readers to miss it: In an attempt to avoid the weekend news dump, at 4:30 p.m. MST yesterday federal bank regulators seized Indymac Bank. It is the largest bank collapse in United States history.

The second most largest bank collapse, incidentally, was in 1984, when Continental Illinois collapsed. The two most expensive failures (so far – we have yet to see what this current one is going to ultimately cost) were both in 1988: the American Savings and Loan Institution of California and First Republic Bank in Texas.

Gee, who was President of the United States in 1984? That would be Ronald Reagan.

And who was President of the United States in 1988? That would be Ronald Reagan also.

The U.S. has been racking up quite a list of failed banks since ole’ George Jr. took office. Take a look.

Indymac specialized in Alt-A loans – loans in which the buyers didn’t need to produce little, if any, evidence of income or assets other than the home they were buying.

That arrangement was peachy-keen, until what-is-now-today’s mortgage crisis began a little over 2 years ago. As homes began to loose value, with creditors owing more than the home was worth, investors in Indymac began to worry about those mortgage-backed securities. The rest is history in the making.

Meanwhile, on the larger front, Wall Street firmly implanted itself yesterday as a bear market: Investors fled from Fannie Mae and Freddie Mac securities. Here’s Piper Jaffray analyst Rober Napoli, on the collapse of Fannie and Freddie shares:

“Investors have lost total confidence in Fannie and Freddie and are looking for a government bailout. If Fannie and Freddie have to pull back substantially in their lending, we’re taking another leg down in the market and housing prices. There are no other lenders right now in the U.S. mortgage market other than Fannie and Freddie.”

Fannie and Freddie are backing $5.2 trillion in mortgages. That’s half of all U.S. mortgages.1 year freddie and fannie securitiesWith investors calling their stock worthless, we’re in deep doo-doo here, given even U.S. Treasure Secretary Henry Paulson is feeding the flames. And while that statement on Paulson might not seem fair consider this: He regulates these damned banks for God’s sake. What is he doing, just sitting back and watching the paperwork float through? We have banks that won’t do Stafford Loans – and given the confidence level in Freddie and Fannie, it’s going to be real soon that mortgages – given the magnitude of what Fannie Mae and Freddie Mac loans provide in mortgage backings – may simply to cease or at least be nearly impossible to obtain for virtually everyone.

Neocons, it seems are rejoicing in this stuff. Look – I read Missoulapolis just like she reads 4&20 – and her reports on the mortgage crisis, especially her local stats reporting, is good stuff to know – but it is the joy that she takes in reporting it and the gleeful comments that I can do without. Does she talk about this stuff with her neighbors and friends? Man, I try, with those that own homes – and it is downright uncomfortable. They don’t want to talk about it. I mean, start talking about housing or real estate and bring up the current stats and conversation screeches to a halt. People not only simply don’t want to believe it, they think it isn’t going to happen here in Missoula. No wonder – look at Carol’s June report on the local market. The year’s sales are down by 35%, and June sales are half of 2006’s – yet the prices haven’t dropped by even 1%. Realtors are feeding a whole bunch of real sweet kool-aid out there, folks. But make sure to check the comments to her posts – because that’s where the “gleeful” comes in, not only from her, but her readers. Then there’s May, and April.

She tags it all with “affordable housing” too. That’s the real kicker. She seems to forget the definition of affordable housing and is thinking that the median price of homes here in Missoula are going to dump to or below 3 times the median income. I doubt that is going to happen, considering that home values have been rising for more than a decade here – long before all those funky loans ever came around.

Then there’s Missoula’s other neocon, Dave Budge. Linking to a WSJ piece calling Fannie Mae and Freddie Mac socialism. There’s a 2nd piece – seems Budge couldn’t contain himself.

It shows some difference here….I hate bailouts, but at a point where the whole damned U.S. economy is going to collapse, something needs to be done – and having both sides work together instead of each side saying “my way or the highway” leads us to paths of extremes. Moderating the solution – and I agree, corrections based solely on the market certainly need to be made – would be better, no?

Of course, what I suggest above requires some regulating of the market that sent these real estate prices soaring. Easy money feeds on the greed of not only investors and CEO’s, it feeds on the greed of buyers who bite off more that they should.

I guess what I’m saying is that I’ll go for minimal bailout if neocons will go for reasonable banking regulations.

The free market and Ayn Rand be damned.


  1. it’s important to note that they say this is the second largest bank collapse in U.S. history, but it’s simply not true. They base that off of numbers that aren’t adjusted for inflation, which strikes me as kind of odd. I think it’s just the disaster-porn nature of our media, mostly. Not to say that this isn’t a big deal, it’s just interesting how that’s being bandied about.

  2. And while that statement on Paulson might not seem fair consider this: He regulates these damned banks for God’s sake. What is he doing, just sitting back and watching the paperwork float through?

    Fannie and Freddie aren’t regulated by either the Fed or the Treasury. They are regulated by the Office of Federal Housing Enterprise Oversight which is under HUD. Paulson has no jurisdiction over OFHEO. All he can do is offer advice to Congress on its regulation.

    Finally, you don’t seem to know what a neocon is or what my position on regulation. If you ask a question about what I think and why I’ll answer it. I have reasons that I don’t want “the Fed” to regulate all financial sectors, but you take that as I’m summarily against all regulation. I’m not.

  3. What advice is he offering, or is he just sitting back watching the paperwork float through (like I suggested)? Or is he out there fanning the flames of doom and gloom (like some might say that Carol and I and the rest of the media outlets are doing)?

    Privatization is the answer? Bailing out Bear-Sterns was OK?

    Unregulated free-market private banking practices were what put Fannie and Freddie where they are today. No one, it seems, was watching the banks – and Fannie and Freddie were buying the fruits of their ill-gotten (or ill-given) labor.

    Experts are saying we are merely in the middle of this mortgage meltdown. Montana falls behind the rest of American when it comes to a lot of things. Missoula is already a “distressed county” as mortgages go. Put those two tidbits together, coupled with realtors trying to maintain home prices, despite the significant drop in sales, and something tells me we are in for a very rude awakening here in Missoula.

    Now, to be clear, I don’t believe we will be hit as hard as some markets (like Atlanta and large parts of California and Florida), but we’re still going to take a hit. The Rocky Mountain’s are still desirable and Missoula has plenty of amenities to moderate the meltdown away from complete collapse. But we’ll still suffer, due in part to the nationwide mortgage meltdown.

    So, I’ll bite: Given you’re championing privatization of the two institutions that together hold 50% of all U.S. mortgages – just where do you stand on regulation?

  4. Well I’m glad you’re finally taking an interest in this now, j-girl. I was about to think you were going to ignore in completely. I saw you slugging it out over at New West recently. Why, I was proud of you, throwing all those facts and figues in Struckman’s face.

    Anything the Missoulian and the Realtors want so badly to play down is something I want to know more about. And it certainly shouldn’t be glossed over when considering any sort of affordable housing levy. This is a work in progress.

    We will never see another tragicomedy of stupidity, cupidity and greed like this in our lifetimes so we might as well laugh about it. Believe me I make no points with Republicans either by blogging about it.

  5. marketblog

    Before anyone gets too worked up professing how much they despise bailouts, take a moment and seriously consider the alternatives. If we remain committed to letting markets sort this out — no matter what — there is a significant chance that the international banking system would go over a cliff. Without financing, capitalism isn’t much different than socialism, at least economically. My point is that we don’t have many choices right now. Paulson and Bernanke aren’t slow to the party — they are just extremely limited in what they can do. They are smart enough to know it’s important not to overpromise, because underdelivering relative to those promises could spark a stupendous loss of faith in financial institutions. A run on the global financial system is not impossible, even in our modern age.

    — marketblog.wordpress.com

  6. I never supported the Bear bailout. I think they should have sunk. But people that might know more than me (and possibly you) thought differently.

    But that has nothing to do with FNM of FRE. Paulson is in a tricky place. If he said that he thinks the companies needed a different structure that could have sent bond holders running for the doors and sunk the whole system. Or it might have rewarded the stockholder if he implied that the bonds really are guaranteed by the U.S. – which, in fact, they’re not. He said what he had to say given that no plan is on the table for how to handle this.

    But right now the two businesses are in some kind of legal purgatory. They should have been privatized years ago but instead what we have is private owners getting the profits over the years and the taxpayers seemingly taking the default risk. Is that fair to the taxpayers? I don’t think so. Has it been fair that Freddie and Fannie have been able to borrow at low government rates providing high returns over the years and pass that to private individuals? This is government at its worse – filling the pockets of investors and passing the risk to the public.

    As far as regulation is concerned, I have no problem with things like capital adequacy, minimum reserves, credit quality standards, etc. But Fanny and Freddy aren’t capitalized as well as even poorly run banks. Congress hasn’t seen fit for over 70 years to impose the regulations on the GSEs that they impose in private institution. It’s the government’s neglect, not a lack of regulation by bank regulators, that put them in the place they’re in. That’s the problem here.

    So now we have a few choice in what to do with them. We can nationalize them – thereby increasing the national debt by $5 trillion. We can come up with a re-capitalization plan ala the WSJ to put them in a position to to be taken private and enforce capital and liquidity standards on them. We can open up the Fed discount window as a stop gap and leave the unfair risk distribution in place, or we can try something else like have the Fed and the Treasury try to broker a deal that gives them both capital and liquidity from the world capital markets.

    We have no choice as I see it. If they go down the world plunges into a depression. But if we nationalize them the taxpayers may end up heavily punished because it will deeply damage the credit rating of the U.S. besides removing all regulatory oversight for capital adequacy and liquidity. It likely would cause a greater moral hazard than exists in the GSEs today.

    It blows me away that these gems of New Deal policy are now being criticized by progressives as a failure of regulation by conservatives. Conservatives have been calling for greater regulation of GSEs for decades.

    Nobody is “rejoicing” in this stuff. For years I have been writing that the level of debt that we’re in is dangerously high. But the discussion has to transcend petty political name calling. This is serious stuff and if we let guys like Chris Dodd and John Warner whistle past the graveyard we’re all screwed. Congress, and only Congress, can address this issue for a permanent fix. The Fed can provide some temporary relief. Treasury can be a cheerleader, but the GSE’s are not part of the main stream financial system and neither the Fed nor Treasury has the jurisdiction to do much about it.

    Now Congress wants to make them bigger? Shouldn’t the downside risk be put off to those who are willing to take it?

  7. goof houlihan

    Hey, is anyone else struggling with blogspot? I would read Missoulapolis and Scoop with the intensity of four and twenty but neither will load.

    Blogspot’s the only thing not workin on the Tubes, near as I can tell, and I’ve even gone back to ole ‘sploder and still couldn’t load it.

    At any rate, I do think we will go below equilibrium, that is, have irrational despair, before we get capitulation from sellers and yes, jhwygirl, we will see movement of housing prices towards what’s supportable for wages.

    And it’ll be all the government workers practicing vulture capitalism because the private sector’s gonna be devastated.

    BTW, in Bend they’re considering deferring fees and allowing infrastructure not to be built until the housing is built and sold, yep, sidewalks and curbs and lights and road paving after the fact.

    All I’ve ever heard from the far left is complaints about “Bozangeles, Montucky” and how it’s so terrible all these private sector jobs have allowed people to move and live here, instead of the good old eighties when housing was cheap for government workers and the rest of us were all miserably underemployed. They’re gonna get their wish, as people once again throw their keys at the bank’s doors and run away. I see the glee from the left, not the right, jhwygirl.

    Affordable housing’s gonna be anyone who can grimly hang on and service their mortgage.

    Now, before you go pokin pretty hard at Carol, I’d hope you would consider my take. There are people takin joy at others’ misery, but I don’t think it’s the right, who value a strong private sector economy. It’s those who felt left behind in a strong economy who are relishing their neighbors’ downfall. I wouldn’t say it’s Carol, or you ladies’ here at 4&20, but it’s out there on the tubes and on the street.

    Bozeman’s seeing big layoffs in surveying, engineering, sand and gravel, and plus fifty percent drops in planning department fees per month. I know for certain that big ticket retail, cars, appliances, etc, are down significantly. Those are still leading indicators.

    Oh yes, a forty three percent increase in families served at the food bank too.

    Growth may not “pay for itself” but it’s sure as hell better at payin for itself, and the people in it, than shrinking.

  8. I’ll try a few quick ones: We’re going to have to go down pretty low. The current median price of a home here in Missoula is $212,500, down from $219,950 last May. With the median income here for a family of 4 right around $54,500, that means that home prices are going to have to drop by more than 25% to get the average home on the market to a $160,000 affordable-to-the-median-income home. And that means decent homes – not roof-needs-replaced, new-furnace-and-water-heater homes, and not ones with poor foundations and no insulation and failing infrastructure, etc. Decent homes. But yeah, you’re right Carol – any talk about affordable housing (I don’t know that a levy is the focus of the discussion) needs to closely assess what is going on.

    marketblog – I certainly realize the need/benefit of certain bailouts. I kinda state that – the core of what our economy relies on comes down to a few things – housing being one of the most major players. That’s the disgust I have with this situation – will we fix the real problem (I suggest it is the banking industry run amok) or will we bandaid the problem, and bail out primarily the bank’s problem, leaving the bulk of the buyout on the shoulders of the american public? I suggest we’ll probably end up doing the latter, when we should be doing the former.

    Budge lays out the conundrum there – nationalize or plunge the world into depression. Now, that might be an overstatement, for sure, but you all get the drift. The U.S. isn’t the only nation suffering – take some time tonight to listen to the British Parliament (usually on Sunday nights, CSpan) and they’re duking it out regularly on economic issues. (Always a lively discussion BTW.)

    We are in a pretty precarious situation here – between housing and oil, the margin for some real real bad doo-doo is slim.

    What I see is a whole hell of a lot of greed in the free market. I guess I think if any one (i.e., mortgage lender) is going to sell off loans to Fannie or Freddie, they are going to have to be pretty heavily regulated. No more whatever-they-can-dream-up in loans. Let the free market handle those. But the American taxpayer can’t – shouldn’t – be backing up loans that are driven more by the greed of banks that know they will eventually be bailed out (that does seem to the the modus operandi now, doesn’t it?) than sensible assessment of risk and loss.

    and Goof? Growth may not pay for itself – especially on the local level (despite the fact that no one seems to believe you or I when we say that) – but yeah, it sure pays a whole different role in the bigger picture.

  9. goof houlihan

    I think you’re using too “conservative” a percentage of MI for “affordable”

    And I’m thinking there will be a LOT of 160k condos and townhomes on the market, all the way down to 125k or so, and a strong balance sheet will make “affordable” a 200k house with that MI.

    That’s more or less the range, 42k–62k MI and 135–205k we are looking at here.

    there’s no “affordable single family home” guarrantee here in Bozeman, in fact, almost all the affordable housing ordinance’s contributions will be attached.

    And when I say growth doesn’t pay, um, commercial and industrial does have a positive contribution. But you know, shrinking’s gonna be much more painful, as Bozeman and Billings found in the mid 80s.

  10. Using the median income for a family of 4 (I get my figures from HUD, although I admit that the $54,500 is a 2007 figure) means a 3 bedroom home, Goof – – So yeah, maybe there will be $150,000 condos on the market – but those are going to be 2 bedroom….and if you go down to $125,000, well – those are going to be studios. Further, once you get into condo world, you have to factor in the HOA fees to the buying price to determine affordability.

    Affordability includes living expenses – water, sewer, garbage, basic utilities (i.e.,not cable or telephone), taxes, insurance.

    I guess what I’m saying is that an affordable unit has to match not only the income, but serve the household size too.

  11. F&F don’t have sub-prime loans on their books – only conventional conforming. The sub-prime, alt-A and Jumbos were bundled by investment banks and sold as CMO’s. FNM and FRE cannot buy sub-prime loans because of the regulatory rules that they operate under.

    The issue, and the argument for regulation if there is one, is that the fall-out from the sup-prime mess has caused real estate values behind prime loans to fall. With oil and a general economic slow down the default rate of prime loans goes up. It always goes up in recessionary times. Since there are few conduits for mortgages, because the investment banks have all but gotten out of the business for now due to liquidity problems, Freddie and Fannie now are getting 80% of the mortgage market. That has caused their percentage of capital (the cushion to absorb bad loans when the economy goes south) to become very small in relation to the amount of mortgages they hold or guarantee.

    Thus, if the economy goes into a significant recession and F&F have to cover losses from foreclosures of conventional loans, they won’t have the reserves to pay the bond holders what they are due. Get it? Also, if they don’t have the money to pay their “lenders” back they won’t have the money to buy more mortgages hence, with 80% of the market, no one will be able to borrow to buy homes. In turn that will cause the real estate market to further decline and, in effect, freeze up. At that point the whole economy looks like 1932.

    Analysts say that if the foreclosure rate on conventional mortgages goes up another 1% F&F will be in this quandary.

    I get the feeling that you don’t understand the market.

    I’m also not saying that there is impending doom. But the stock market is telling us that the situation is bad enough that confidence in the GSEs is going away. So the worry is how long will it be before bond investors lose confidence in F&F and will not buy bonds from them.

    If you want some good background read this.

  12. And for a more sanguine take read Brad DeLong.

    But I think he understates where the economy is heading.

  13. goof houlihan

    Scary stuff, Budge.

  14. There was a time, Dave, when I knew a hell of a lot more. I used to live with a broker for Lloyd’s of London, and given the weird hours for him, there was plenty of time for learning about the market. I could watch the NASDAQ ticker like some of you guys watch the sports ticker. Combine that with my addiction to all things news and I made a nice amount of cash when I used to dabble.

    Life’s a learning experience. You won’t find me saying I’m an expert – especially in this stuff.

    I wanna say I do get what you are saying, although it looks like I was wrong in assuming that Fannie and Freddie were backing funky loans. With private lenders hanging on the precipice, the only game in town is quickly becoming only Fannie and Freddie, and that ain’t good.

    I appreciate you having stopped over.

    Let me ask – since both FME and FNM back 50% of the mortgages, and we are in such a pickle due to unregulated or not-regulated-enough private lending practices, shouldn’t more regulation or oversight be the answer? Considering where these shoddy practices have gotten us?

  15. Boris Resnick

    Back in 2004, Senator Trent Lott was slated to give a speech he had given twice before. It was the premise that middle class home ownership was bad for the US economy. Lott had previously mentioned that the middle class mortgage interest tax deduction was unfair and that true tax reform could not take place until it was abolished.

    The idea that every American had a right to own his own home was a bad idea, both wasteful of land and resources and money that could be invested in businesses that would improve the US economy and bring profits to investors.

    The mortgage industry and the national Realtors did not want to hear this nor did they want the US middle class to believe that anyone, including the GOP, was against home ownership, especially during an election year. Lott did not give the speech given the pressure from lobbyists.

    It is interesting to note, however, that the decline of Middle Class home ownership is happening right now, thanks to the deregulation of the mortgage industry.
    Gee…it almost makes me think there is a conspiracy or something goin’ on.

  16. Just so you know, I make my living in the capital markets and have been in the financial services industry for a long, long time. Besides having a degree in finance I was a Senior Vice President for First Chicago Corp in the 1990’s. As I watch things I know that they’re much more complicated than they are ever reported.

    Now, about regulating sub-prime mortgages, et al. The fact is that there were many errors in this industry that caused the problem.

    First, there was a huge push by organizations for banks to make sub-prime credit available. Read this.

    Then there was grave mistakes at the ratings agencies. Read my long comment at Montana Netroots here.

    It was the ratings agencies mistake that caused much of the crap to be held in bank and retirement trust portfolios. If Moody, Fitch, etc, had understood what they were assigning as investment grade the various CDOs would have been priced much higher and not eligible for bank investments. I think they should be held liable but it wouldn’t recover much money.

    Next, since this meltdown, you can bet that market itself will scrutinize securitized loans much, much more rigorously. The damage has been done and no investor class wants to get caught with this crappy paper again. But that doesn’t mean we should make it illegal to write sup-prime loans. If regulation is in order it makes sense that CDO cannot commingle risk. In other words, the collateral behind CDOs should be restricted to having only one grade. Then the market could sell “conforming” CDOs and “non-conforming” CDOs instead of the mixed bags that they were producing. This would add a great deal of transparency to the market. In that case banks and retirement trusts would not be investing in such risk. But that could be done by administrative rule by the SEC. We don’t need a regulatory makeover for that to happen.

    But doing that is much different than regulating investment banks for selling such products. In the ’80s junk bonds were very popular but a fiasco followed because of crooks. No new regulation was needed because they were breaking existing laws. Today junk bonds are very important to the economy in providing capital to risky businesses. There are sophisticated buyers of those bonds who are willing to take the risk. But you won’t find them on bank balance sheets.

    My overall problem with the new advance for broader regulation and power ask for by the Fed is that the Fed is not representative of the electorate in any substantive fashion. The argument on the one hand is that this makes them independent. On the other hand it makes it difficult to change them if they start doing crazy things like flooding the market with liquidity – as Alan Greenspan did.

    At the end of the day, the biggest reason we’re having this problem is that the Fed, instead of simply managing the vallue of the currency as they were originally chartered to do, took it upon themselves to try to manage the business cycle by adjusting the money supply. After 9/11 Greenspan took interest rates down so low that money and credit became extremely easy and the market could take on huge risk without having to pay the appropriate premium for it. Your Lloyd’s friend knows exactly what this means. Ben Bernake is doing the same thing now and what has happened is that the greenback has gotten pounded. This is a material factor in the price of oil. Europe is paying roughly 30% less for oil because the the Euro is so much stronger than the dollar.

    Now the Fed is in a fix. If they raise rates they risk prolonging the economic downturn. If they don’t raise rates the dollar might continue to slip and import prices, including oil, will continue to go up -causing inflation. And this monetary policy is hurting us in spades. Import prices were reported last week as up 7% on an annualized bases – all due to the week dollar.

    So the question is, why should we trust the Fed with more power given the fact that the evidence is that they hold much of the blame for our current circumstance?

    I’d like to know.

  17. Boris, is it fair that people who can afford a house get a tax break but those who can’t don’t. Talk about a raw deal for the working poor…

  18. First of all – Dave, you better watch – you’re going to start confusing people.

    At some point last night I went into information overload – I bet I had about 15 pages open at once.

    So Thanks Dave – the links you sent were great, and they led me elsewhere, and so on and so on. Both the Bainbridge and the Delong links were good stuff.

    NYTimes and The WaPo also had stuff up last night too – WaPo Ripple Effects From Fannie and Freddie, and Freddie Mac’s Next Hurdle: Raise Cash, and NYTimes Long Protected by Washington, Fannie and Freddie Ballooned.

    There’s also this on in the NYTimes, detailing the reckless loans and and the work being done on modifications being done in an attempt to stave off foreclosure.

    On the privatization of Fannie and Freddie, it does look like everyone (or most, I guess I should say) does agree that it should have been done a long time ago. Both parties have run roughshod over the program with the knowledge that it’d be bailed out by the government taxpayer.

    And as for regulation v oversight, that’s another one that you are probably correct on, although I might use the term regulatory oversight. Strong regulatory oversight. You want the market to take on risk, and heavy-handed regulation stymies that. I just don’t want some oversight committee that steps in every 6 months or so, finds a problem, and then walks away worried only about scheduling the next meeting. There’s enough of that stuff out there in the real world.

    Yi Yi Yi….what a load of crap we’ve gotten in, when I read it all – the mother part of me wants to say let them all waddle in the mess they’ve created, but the practical part of me knows that can’t be done – there’s too much at stake.

    Too bad we can’t just take them all out to the woodshed before we step in a clear it all up.

    %*@&!

  19. Bob

    I don’t know any of you people and it’s probably just as well, because I don’t have anything good to say. I read most of your comments but couldn’t get through them all.

    Take a breath, stand back and look at the big picture.

    When the theatre ushers are trying to keep people calm in an effort to prevent a stampede for the exits, (similar to what our fearless leaders are doing now) it’s always because there is a damn good reason for people to get out of that theatre. Usually a fire or gas leak or something. Take advantage of the initial confusion of the next month or so and get the hell out early! That’s my advice. It’s too late to fix this mess. The theatre is going to burn to the ground.

    How low can housing prices go? Wake up! Ever see those scenic pictures of an old homestead out in a field rotting into the ground?…..Well back in the days before socialism came to this great land, there were times when people just had to abandon those old homesteads and move on, or starve to death. Some of them starved to death anyway, or died in a war. They lost ALL their equity and retirement funds, so to speak.
    That’s how low house prices can go.
    By the time this is only half over, there will be NO government money left to bail anything out. No government salaries. No pensions. Doodleysquat. You’ll be on your own. Get ready now.

    Wrap your heads around that one.
    Good luck.

  20. Mayor of Mayhem

    It sounds a little like the sky is really falling. But I wonder how every republican administration deregulates itself into financial anarchy.Then Democratic Presidents get the economy running like a race car, only to have republicans say it was thier policies that just took a while to work. Ayn Randian deregulated capitalism ain’t for wusses. Can anyone tel me who was the last Republican President who had a healthy economy, Please don’t say Reagan.

  21. The link above to Brad DeLong, Mayor, if you go to the main page, one of his more recent posts has some graphics running down the last 70 or so years of presidents and their contributions to the fiscal side of things. Pretty neat visualization on jobs and GNP, deficit, etc.

  22. sad note to add to economic collapse. Tipu’s Tiger is closing. found out a few hours ago.

    the local death watch begins: who is next? restaurants? certainly. car dealers? furniture stores? appliance stores? building supply stores?

    lots of jobs. sad- very sad.

  23. The Living Room down on S Reserve was closed today and wrapped (the whole frontage) in big orange construction fencing saying RETIREMENT SALE.

  24. saw that- but careful jhwygirl, retirement is not necessarily closure due to economic conditions. some of that is merchandising and promotions.

  25. Mayor of Mayhem

    Nobody retires when business is good, they give it to the kids, they sell it to optimistic investors, they sell to competitors. I don’t know but it sounds like they gave up.

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