Who caused the 2008 housing bubble to burst in the U.S.?

A number of books have been published dealing with the current recession and its causes. I have been perplexed as to why the Republicans (no, I dislike both political parties) are not responding to the accusation that this is Bush’s recession, and not the real cause—government’s insistence that as a racist society we were denying minorities home loan mortgages; thus setting in motion from 1990 to 2008 the eventual collapse of the housing market. Do-gooders sunk the ship, though bush’s extravagant wars did not help the situation. Excerpts from Meltdown is a succinct summation of what happened:

Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse (Thomas E. Woods Jr., 2009)

001—Fannie was also deeply involved in the politically instigated move to lower lending requirements in the name of helping “disadvantaged” groups. In September 1999, the New York Times reported that Fannie Mae was easing credit requirements on the mortgages it bought from banks. The initiative, the Times said, would encourage banks “to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans.” Fannie Mae had been “under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people.” Although “the new mortgages [would] be extended to all potential borrowers who can qualify for a mortgage,” one of the program’s goals was to “increase the number of minority and low-income home owners who [tended] to have worse credit ratings than non-Hispanic whites.” Even the Times understood the risk involved: “In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980s.”

002—Fannie and Freddie weren’t the only entities in Washington pushing for looser lending requirements. Government agencies of various kinds were pressuring lenders into making riskier loans in the name of “racial equality.” Not wanting to be on the wrong end of lawsuits demanding hundreds of millions in damages, these lenders did as they were told.

Charges of racial discrimination in lending helped spur this rush. In 1992, a study by the Federal Reserve Bank of Boston claimed to find evidence that even allowing for differences in creditworthiness, minority applicants were still getting mortgage loans at lower rates than whites. That study was widely hailed as definitive by those who wanted to believe its conclusions, that American banks were guilty of discrimination against blacks and Hispanics (though not against Asians, who got mortgage loans at even higher rates than whites), and should be forced to make credit more widely available to people in inner-city neighborhoods. Evidence later surfaced exposing the sloppiness of the study, and showing that no evidence of discrimination was found when errors in the data were corrected, but it was too late. The pressure groups had their bludgeon and intended to use it.

The Community Reinvestment Act (CRA), a Jimmy Carter-era law that was given new life by the Clinton administration, has received a great deal of attention and criticism since the housing bust began. That law opened banks up to crushing discrimination suits if they did not lend to minorities in numbers high enough to satisfy the authorities. But it wasn’t just the CRA that was pushing lower lending standards. It was the entire
political establishment. And according to the University of Texas’s Stan Liebowitz, one thing a scan of the housing literature from 1990 until 2006 will not yield is any suggestion that “perhaps these weaker lending standards that every government agency involved with housing tried to advance, that Congress tried to advance, that the presidency tried to advance, that the GSEs tried to advance—and with which the penitent banks initially went along and eventually supported with enthusiasm—might lead to high defaults, particularly if housing prices should stop rising.”

Shortly after its discrimination study was published, the Boston Fed also released a manual for banks on nondiscriminatory mortgage lending.

003—But in discussions of the mortgage meltdown there may in fact have been too much emphasis on subprime loans. Although the driving force behind abandoning traditional lending standards was the federal government’s political goal of increasing homeownership, particularly among preferred minority groups, lending innovations like 100 percent loans (mortgages with no down payments) became institutionalized features of the industry, particularly when the Fed had made banks flush with reserves to lend. The push for relaxed lending standards for low- and middle-income borrowers was so pervasive and systematic, persisting for a full decade, that it is no surprise that it should have spilled over into the standards for higher-income borrowers as well.

004—Make perfectly clear once and for all that there will be no bailouts, no looting of the public, on behalf of any firm, period. That would do more to jolt the financial sector into being sensible and cautious instead of reckless and irresponsible than all the regulatory tinkering in the world.

005—In October 2008 three economists for the Federal Reserve Bank of Minneapolis released a study showing that four major scare claims that had been advanced on behalf of the bailout were false. First, it was not true that bank lending across the board had declined sharply. Wall Street firms had trouble borrowing (except from the government), but not the rest of us. As of October 8, the data showed no decline in business and consumer loans. Second, interbank lending, which was being described as essentially nonexistent, was in fact “healthy” according to the data. Third, non-financial businesses showed no sharp decline in their ability to secure short-term loans (called “commercial paper”). Although commercial paper issued by financial institutions had declined, commercial paper issued by nonfinancial institutions showed essentially no change during the crisis. Interest rates on commercial paper rose for financial institutions, but not for everybody else (and even the rate for financial institutions was still considerably lower than it had been from 2006 through mid-2007). Finally, even if banks were lending less, that didn’t spell doom for businesses hoping to borrow; the study found that about 80 percent of business borrowing took place outside the banking system.

006—Meanwhile, the problems created by government’s monopoly powers and its central bank’s manipulation of money and interest rates are, hilariously enough, blamed on the “free market.”

007—This is what sensible economists mean when they say credit has to be based on real savings and cannot be created out of thin air. You can print up all the dollars you want, the Fed can give the banks as much money created out of thin air as it likes, but there is no avoiding the simple fact that there are only eight loaves of bread in existence. Ben Bernanke doesn’t have any loaves of bread, and none of the financial tools at his disposal can produce any, either. All the monetary manipulation in the world cannot defy the constraints mercilessly imposed by reality.

008—You do not win friends in the political and media establishments by proposing a monetary system that cannot be exploited by governments to enrich their friends, enable their addiction to spending and looting, and fund their bailouts. But when you ask a question that sends respectable opinion into hysterics, that’s often a sign you’re on the right track.

009—The executive branch first seized Fannie and Freddie, and Congress then increased the amount of money they could spend on mortgages. These zombie companies have already drawn enough of the mortgage market away from where truly free-market channels, unencumbered by firms with state-granted monopoly privileges like Fannie and Freddie, would have taken it. “The fact that government bears such a huge responsibility for the current mess,” argues Harvard’s Jeffrey Miron, “means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.” That means, at a minimum, “getting rid of Fannie Mae and Freddie Mac.” Miron is right: Fannie and Freddie should be put into bankruptcy receivership, and their assets auctioned off to private mortgage guarantors. Certainly its mortgage-reduction program, with all its unfairness and moral hazard, should be discontinued immediately.

People who disbelieved Barack Obama’s rhetoric about “change” were sternly lectured for their supposedly undue cynicism. But early indications are that the cynics were right: “change” means more bailouts and a less free market—the very same economic program of the presidential administration Obama so sharply criticized—and government personnel drawn from the same revolving-door pool of New York and Washington insiders who were blindsided by the crisis, including (as chief of staff) a former director of Freddie Mac. If Obama wants to prove he is serious about change and that his presidential tenure will be truly historic, he will pledge that under his watch there will be no bailouts of any private company for any reason.

010—As Ludwig von Mises once said, the history of money is the history of government efforts to destroy money. If ever there was a monopoly with which government could not be trusted, this is it. The temptation to debase the money and impoverish the people in order to benefit favored constituencies, hoping most people won’t know the source of their declining standard of living, is too great. The present monetary system encourages risk and recklessness, with financial firms accumulating ever-higher pyramids of debt on top of a small sliver of equity—just the opposite of the much higher equity ratios banks maintained even in the imperfect nineteenth century. And as we have seen, the central bank’s inflation of the money supply by its increases in bank reserves is responsible for the boom-bust cycle.

011—It has always, since the privilege of issuing money was first explicitly represented as a Royal prerogative, been advocated because the power to issue money was essential for the finance of the government—not in order to give us good money, but in order to give to government access to the tap where it can draw the money it needs by manufacturing it. That, ladies and gentlemen, is not a method by which we can hope ever to get good money. To put it into the hands of an institution which is protected against competition, which can force us to accept the money, which is subject to incessant political pressure, such an authority will not ever again give us good money.

012—Mises put it this way: “Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping toward destruction. Therefore, everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interest of everyone hangs on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us.”

Posted by Matt Nuenke on Tuesday, November 1, 2011 at 08:19 AM in
Comments (40) | Tell a friend

Comments:

Posted by Ex-Pro White Activist on November 01, 2011, 08:59 AM | #

And what is the major point? Is it Woods contention that everything is a-ok so long as two-working parent families are capable of somehow paying house mortgages consuming 35% - 40% of pretax family income?
It seems to be.

To me this is an unsurprising sentiment in a disciple of a cult (libertarianism) that claims a moral right to starve one’s own children. The most sacrosanct principle of Judeo-Libertarianism appears to be shylockery and the collection of usurious interest.

Posted by GenoType on November 01, 2011, 09:31 PM | #

To me this is an unsurprising sentiment in a disciple of a cult (libertarianism) that claims a moral right to starve one’s own children.

The surprise is that Woods is Roman Catholic. The surprise is short-lived upon our discovery that he is a Lutheran convert. As we delve into his thinking we discover that his conservatism and catholicism is of the small “c” variety. It becomes apparent that the difference between Woods and many self-identified liberals who also support the constitution, gun ownership, state rights, and low taxes for the middle-class is mighty close to negligible when it comes to white advocacy. We are not impressed by Woods’ simultaneous “value-free market” advocacy and “conservative” personal ethics, for at best this is merely a convenience enabling him and other nominal Catholics to have and eat their cake. At worst the incoherence is intended to undermine Church teachings. Either way jewish interests are served.

Woods and his ilk at MR would dismiss the above as caricature, just as they reject the term “homo economicus” as a caricature of Austrian economic thinking. However, it is precisely an economic man – an incessant cost calculator and resource allocator – that he and fellow Austrians in general describe as human. Furthermore, in rejecting this “caricature,” Woods retorts that “praxeology, the science of human behavior” takes the human person to be a “maximizer” of gain

“only in the tautological sense of maximizing his psychic income [Woods’ emphasis], which includes all the variables whose symbiotic relation constitutes the person’s sense of his own well-being.”

With this mouthful of self-serving crap Woods demonstrates just how far from traditional Western political economics and Catholic teaching he and his ilk have wandered in their devotion to the pseudo-science of Mises and Rothbard.

Posted by danielj on November 01, 2011, 11:16 PM | #

“The market is highly efficient, but it has no goal; its sole purpose is to produce more in order to consume more. No civilization of the past was ever ruled by such a blind, mechanical, destructive fatality.”

- Octavio Paz

Posted by Leon Haller on November 02, 2011, 04:51 AM | #

Matt,

Thank you for posting this. I hope it influences some, though the minds around here are pretty firmly shut (and incoherent on economic topics). I read Meltdown nearly 3 years ago - a slim but sound (and infuriating) read. The combo of CRA, strong-arming of lenders, Fannie/Freddie, and Greenjew’s loose money (as with Bernanke now), did in the economy. I wish there were a smarter, stronger-willed and forensically more talented GOP candidate than Ron Paul to be making this argument publicly throughout the land. The Great White and Dwindling Middle Class is ripe for racial education, esp re how in the USA interfering with the free market always helps minorities, and hurts whites.

Posted by Liberal Heresy on November 02, 2011, 08:24 AM | #

The combo of CRA, strong-arming of lenders, Fannie/Freddie, and Greenjew’s loose money

H, this sentence seems to excuse the securities (and securitization) industry of their critical hand in the process.

Who took those loans that they were ‘forced’ to make and repackaged them into derivatives and various other instruments. Sold these on and bought repacked and rolled others over again and again? Sold to clients and then bet against the same investments on their own account?

P.S. How hard is it to install a better capcha system that avoids the spam?

Posted by DJF on November 02, 2011, 11:13 AM | #

Yep, during the bubble years I must have received hundreds of offers from the banks for loans. Yet not one of them had any note from the CEO’s saying

“Help, I am being forced to give out bad loans to people who can’t afford them.”

They were up to their necks in this and this is shown by how much they tried to shove these debts onto others using all sorts of financial paper, most of which today is not worth the paper its written on.

As has been pointed out the modern corporation has but one reason to exist, to maximize the short term profits of the management and stockowners. It has even been given legal personhood status by the courts even though any actual person who thought his only reason for existing was to maximize profits would be considered to be mentally ill and probably insane.

As to the free market, it does not exist today and trying to impose theoretical free market principles in today’s situation without compensating for the massive government presence in the economy is going to end in failure. It would be like mixing two pure chemicals together to get a useful product while ignoring the fact that the chemicals are not pure. You will probably end up with at least a mess and might end up blowing yourself up.

The free market does not give you

Subsidized roads with unlimited right of travel
Freedom of movement on the seas
Freedom of movement in the air
Limited liability corporations
Federal Reserve giving special banks low interest loans.
Patent, copyright, and trademark protection

You must get rid of these and many others before you can even pretend that a free market exists. And just getting rid of these would get rid of most of todays corporations and what would be left would be far less wealthy and powerful

Posted by anon / uh on November 02, 2011, 02:14 PM | #

It has even been given legal personhood status by the courts even though any actual person who thought his only reason for existing was to maximize profits would be considered to be mentally ill and probably insane.

Defined as “Leon Haller” by some. “Perforce everyone” by others.

Posted by anon / uh on November 02, 2011, 02:19 PM | #

http://www.dailymail.co.uk/news/article-1379150/Family-12-refugees-handed-6k-month-UK-home.html

A family of 12 refugees is being put up in a vast house costing taxpayers nearly £1,500 a week, it has emerged.
The Ethiopian couple and their ten children are receiving a staggering £1,460 a week in housing benefit alone.
The jobless couple will also be eligible for other handouts such as unemployment and child benefits, which could potentially add up to an additional £1,300 a week.

Mo-movin’ on up ... to the East side ... to that de-luxe apotmin’, in da skyyyyy ...

The couple receive a weekly sum of £1,462.90, according to the council’s housing benefits claims department, meaning that the family will cost taxpayers £76,000 in housing benefit alone if allowed to stay in the property for 12 months.
The couple would realistically have to be among the nation’s top earners on wages of £230,000 before tax to afford to spend the same amount of money on rent or a mortgage.
First, the husband presented himself at a housing office in Tower Hamlets, East London, stating he was a refugee and homeless.

We finally got a piece of da piiieeeee!

http://www.popmodal.com/video/1348/THE-JEFFERSONS-TV-Series-Theme-Song

Posted by PM on November 02, 2011, 04:06 PM | #

This chap who talks about a ‘moral right to starve one’s children’ has been quoted quite a bit here, recently.

I would be inclined to give someone who said this the benefit of the doubt, and assume that, rather than being a monster who wants people to stop feeding their children, he simply fears the power of the State, which can destroy the life of a whole nation, more than he fears bad parenting, which at least only ever destroys the life of its own children. After all, ‘I’m from Social Services and I am morally empowered by the State to help you’ is surely one of the most terrifying things that any modern British parent could hear….

Remember the recent case of the parents who were threatened with having their child taken into care because they let her walk to a bus stop on her own to get to school—even though said bus stop was mere yards from her front door?

Posted by GenoType on November 02, 2011, 07:33 PM | #

XPWA,

1. Ever notice how “free market” advocates, when dismissing something as “caricature,” always parody themselves?

2. I’ve been taking Haller’s advice and reading Mises and the jew Rothbard of late. Convincing they are not. Their “law of marginal utility,” for example, turns out to be a mere platitude. All it really means is that man naturally chooses what is “highest on his preference scale” at a given moment. The only Austrian proof of this, if you can call it proof, is that the man has chosen it. The jew Rothbard even admits that because “praxeologists” do not claim to know the internal workings of the mind, they cannot tell us why a man chooses, but only that he has made a choice.” Unfrickingbelievable! Rothbard goes on to say it is “irrelevant for praxeology whether a man, in having decide between alternatives A and B, makes a choice firmly or decisively, or whether he decides by tossing a coin.”

Wow! This means the entire “science” of praxeology, including “the law of marginal utility,” can be captured by the following proposition: People do what they do. I could go on with more examples of this “science” but it’s unnecessary. Austrian “praxeology” turns out to be what we originally thought it was: a “science of human behavior” that has nothing to do with human nature – that is, at least in the sense that we understand human nature in the Western tradition. It’s pseudo-scientific judeo-business propaganda, pure and simple. I am happy to pursue it further, however, because the need for debunking is great.

Should we be surprised that philosophically-averse small “c” conservatives and libertards mindlessly repeat this bunk? No, we shouldn’t.

Posted by Captainchaos on November 03, 2011, 01:03 AM | #

*yawn*

reading Mises and the jew Rothbard of late.

Mises was also Jewish.

Their “law of marginal utility,” for example, turns out to be a mere platitude.

No, it is an aphorism.

All it really means is that man naturally chooses what is “highest on his preference scale” at a given moment.

This is self-evidently true.

Austrian “praxeology” turns out to be what we originally thought it was: a “science of human behavior” that has nothing to do with human nature – that is, at least in the sense that we understand human nature in the Western tradition.

It is a science which concerns itself with the study of the human behavior of economic transaction. It is one academic discipline among many which all focus on different aspects of “human nature”. Praxeology and other sciences which study human beings cannot strictly be said to be mutually exclusive, only having their particular focus according to how those various academic disciplines are defined. If an academic discipline can measure what it claims to be able to measue then it is scientifically valid, strictly speaking.

Posted by Captainchaos on November 03, 2011, 01:32 AM | #

According to GT’s ‘reasoning’ MacDonald’s academic writing on Jews is “pseudo-scientific” because, as MacDonald would doubtless say himself, the strong, weak, electromagnetic and gravitational forces are not considered germane to and therefore not accounted for in MacDonald’s work. LOL

Posted by Captainchaos on November 03, 2011, 02:04 AM | #

Moreover, Mises’ treatise on praxeology is no more pseudo-scientific than Salter’s treatise on ethnic genetic interests. Both assiduously avoid leaning on the naturalistic fallacy as the crux of their reasoning. Both leave it to the individual sentient mind, according to its values (and without making totally exhaustive statements about how those values are formed), to maximize the efficiency of economic transactions and ethnic genetic interests, or not, to whatever degree, respectively.

Posted by danielj on November 03, 2011, 02:21 AM | #

A life lived enslaved to virtue is preferable to and more honorable than a lived enslaved to fulfilling base wants by way of free consumption. The conservative’s god is his belly and he serves a pantheon of lesser deities (the hidden hand, less spending, externalities etc.) and furies (regulations). Richard Weaver was no Austrian friends. Certainly, he didn’t wax petulant or continually strike three bar-chords in praise of the unrestrained market, sounding like some awful Green Day song stuck on repeat.

Posted by Mr Voight on November 03, 2011, 07:16 AM | #

Daniel, thanks for mentioning Richard Weaver. I had never heard of him but he seems interesting from what I’ve since googled.

Posted by GL on November 03, 2011, 03:42 PM | #

Testing times.

Posted by Graham Lister on November 03, 2011, 03:55 PM | #

If an academic discipline can measure what it claims to be able to measure then it is scientifically valid, strictly speaking.

Really, so falsification has no part in science? In what way can marginal assumptions be falsified? Only a claim to measurability is necessary for scientific validity? Are you sure that is the only desideratum required by the scientific method?

Posted by GenoType on November 03, 2011, 06:43 PM | #

LMAO! MacDonald would never equate his work with physics or chemistry. Austrians do. Except when denying it. Sorry, but economics is a value-laden social science. You don’t have to like it, fellas. Keep bitching, if you like, but don’t go to a physics site and make the case for Mises. They will eat you alive.

Posted by GenoType on November 03, 2011, 07:16 PM | #

Really, so falsification has no part in science?

Falsification is one tool of several available to science. It is not comprehensive. As a scientist or technician (I assume you are one or the other) then you know this. As to the rest…I won’t be sidetracked. Haller’s “Austrian School” is one value-laden interpretation of a social science that is presented by its cultist devotees as objective science, except when denying this accusation as “caricature.”

Posted by always25 on November 03, 2011, 08:29 PM | #

“Falsifiability or refutability of an assertion or a theory is the logical possibility that the assertion (or the theory) can be contradicted by an observation or the outcome of a physical experiment. That something is “falsifiable” does not mean it is false; rather, that it in principle can be disproven by observation. In its most basic sense, falsification is a foundation of modern science”

Posted by danielj on November 03, 2011, 10:18 PM | #

A foundation. Not the foundation.

A reeeeeeally shaky one. It pretty much rules out universal truths and the whole idea of truth, writing the concept off entirely in exchange for a cheap pragmatism.

What a fucking joke. Scientists are technicians that should be enslaved to philosophers. The only problem is that it was philosophers that got us into this pickle to begin with.

Posted by Ex-Pro White Activist on November 04, 2011, 08:23 AM | #

All it really means is that man naturally chooses what is “highest on his preference scale” at a given moment. The only Austrian proof of this, if you can call it proof, is that the man has chosen it. The jew Rothbard even admits that because “praxeologists” do not claim to know the internal workings of the mind, they cannot tell us why a man chooses, but only that he has made a choice.”

GT,

Neither can the rest of them tell us from inside the tiny confines of their Jewish defined intellectual prison. The modern political-economy overflows with examples of things now legally traded that were formerly either outlawed or organized by society entirely outside the terms of monetary exchange. Sex and the family are examples of this. Look at how often in the modern era Judeo-feminists reduce sexual relations to monetary terms. The libertarded cultist simply goes with the flow.

@Silver

Dude, living standards have never risen as high as they have under the aegis of the mixed economy over the past fifty years (and longer, but use that).

“Dude”, most of these brain-bombed adherents even uncritically accept at face value the Judeo-Federal Reserve claims of ‘economic growth’. A great deal of that so-called growth merely monetizes highly destructive activities that were outlawed when whites really ruled. Pornography, prostitution, abortion and gambling are just four examples.

The “Austrian School” does not oppose the “Frankfurt School”. It compliments it. This is not an accident. Both of these intellectual currents were founded and propagated by immigrant Jews who were instinctively at irreconcilable war with their idiot white American hosts. Jew Rothbard admitted his philosophical system (for goyim) permits starving one’s own children in the pursuit of hedonistic satisfaction. He was still concealing something behind his superficial intellectual honesty. In formulating such a philosophy he was obeying the very highest imperative of the rebbes. This is to use all possible means to restrict the numbers of the gentiles.

Earth to Haller:

The Great White and Dwindling Middle Class is ripe for racial education, esp re how in the USA interfering with the free market always helps minorities, and hurts whites.

This is mere assertion offered without evidence. And the reason is you have no supporting evidence.

Q. If Libertard Theory is correct, how has the “Great White and Dwindling Middle Class” emerged during an era when the progressive structure of income tax rates was greatly reduced? This was one of the crowning achievements of the Zionist Astrologer President.

Your own whacky ideas aren’t even accepted among the mainstream of (way below replacement rate) libertards. This group is pro open borders and pro open legs for dark meat. They do not and

will not

accept your proposed restrictions. Their conception of “free market” includes the freedom to import and profit from the labor of low wage illiterates while dumping all the social costs onto their neighbors. It also includes the “freedom” to watch mudsharks engaged in bestial sodomy ala Sarah Palin.

However, the brain bombed adherents of the Judeo-Libertarian cult do uncritically accept certain limits on ‘liberty’. Two of these are uncompromising zero tolerance ‘anti-racism’ and ‘anti-anti-Semitism’. This is why you are littering these threads with your intellectual poop rather than other “Libertarian” websites.

Repeat. The “Austrian School” is a 100% compatible compliment to the “Frankfurt School”. It has absolutely no place in a healthy pro-white movement.

Posted by Ex-Pro White Activist on November 04, 2011, 08:50 AM | #

Dude, living standards have never risen as high as they have under the aegis of the mixed economy over the past fifty years (and longer, but use that).

Living standards for who? Jewish pornographers, financial swindlers and ambulance chasers? Prostitutes? Mulatto political fixers and influence peddlers? Labor arbitrageurs and “Free Trade” speculators peddling goods produced in one-party dictatorships? Childless homosexuals? Academic hoaxers specializing in tales of the holohoax, Boasian racial equality and anthropogenic global warming?

My first comment to this thread stated:

Is it Woods contention that everything is a-ok so long as two-working parent families are capable of somehow paying house mortgages consuming 35% - 40% of pretax family income?

Most white women would love to escape the two-income trap. It is a death camp for white children. And for them it entails long hours in hostile “day care” environments. And all too often these are staffed with the most sub-standard possible care-givers. Only the ignorant and the mendacious claim that political-economic developments since the early 1960s have been the least bit favorable for white children.

The claim that white net family income or living standards have increased since the late 1960s is a bald-faced lie. Both have gone down, not up.

Posted by Ex-Pro White Activist on November 04, 2011, 10:23 AM | #

@ Leon Drifting Through Outer Space,

Thank you for posting this. I hope it influences some, though the minds around here are pretty firmly shut (and incoherent on economic topics).

Do you even remember what happened yesterday? I ask because I haven’t see any evidence of this yet. The very premise of this title:

Who caused the 2008 housing bubble to burst in the U.S.?

is wrong. That seems to be a common occurrence when dealing with libertarian economic ‘thought’.

The US housing bubble had popped in mid-2006 when r.e. prices peaked. Prices had already been declining and mortgage defaults had been rising for two years by August, 2008. fyi, my wife and I lost a tidy little r.e. development related business because of this. We already knew there were severe problems emerging in mid-2005. Developers had already ceased committing to new projects then. Restating the time line here:

1. Mid 2005. New residential r.e. project commits stop in the ‘Sand States’.

2. Mid 2006. residential r.e. prices peak in most markets.

3. 2006 - all year. Overextended/undercapitalized r.e. developers begin imploding.

4. Spring, 2007. Subprime originator New Century Financial collapses. Other subprime mortgage originators start failing. Subprime RMBS market and its fictitious synthetic AAA rated “tranches” secured with credit default swaps begin collapsing. Developer foreclosure auctions reveal the terrifying fact that incomplete r.e. developments generally have a negative market value. i.e. there is no real collateral left securing most of the r.e. development bank loans.

5. Mid 2007. Commercial r.e. prices peak in most markets.

6. Fall 2007 Major US stock market indices peak. (Psst, ‘Adam Smith’ Haller: check out NYSE margin debt time series data. You might notice something. Start here. http://www.nyxdata.com/nysedata/asp/factbook/viewer_edition.asp?mode=table&key=3153&category=8 See if anything correlates with the SP500 monthly data. Should be a snap for a business & economics whiz like you say you are.)

7. Mid 2007 forward. Federal Reserve initiates its alphabet soup of ‘special’ lending and liquidity facilities.

8. January - June 2008. Huge commodities markets price bubbles form in all commodities.

9. July, 2008. Commodities markets bubbles pop. Fannie Mae and Freddie Mac enter effective receivership called “Federal Conservatorship”.

10. August 2008. System wide margin calls destroy trillions of fictional market equity as traders sell out leveraged positions to raise cash. International trade financing begins to vanish. International banks stop issuing letters of credit for freight shipments.

(psst. Leon. Starting this past August more ‘system wide’ margin calls have been issued to options writers and other highly leveraged players. Didn’t get the memo? Guess you aren’t on the distribution list. I am. But that’s because I actively trade listed puts and calls.)

11. September 2008. Lehman falls over with $900 billion of counter-party exposure.

Don’t ever imagine I don’t understand what you are yapping about. I just don’t have much use for your Judeo-monetized whorehouse world. GT & I see a better way for white people and white children.

Posted by Thorn on November 04, 2011, 04:49 PM | #

2. Mid 2006. residential r.e. prices peak in most markets

This is when Wachovia bought Golden West (owned by the jewish Sandlers). That particular acquisition was the main cause of Wachovia tanking. I.e. when the housing bubble burst, the toxic sub-prime mortgages which comprised the bulk of Golden West’s assets, turned out to be the demise of the once solid balance sheet of Wachovia.

LOL! The jews strike again!

Posted by danielj on November 04, 2011, 10:37 PM | #

Can somebody just buy a fucking pair of [removed] already!?

Posted by danielj on November 05, 2011, 12:24 AM | #

“We may face a scorched and lifeless earth, but they’re accountable to their shoulders shareholders first.

That’s how the world works.”

Posted by J Richards on November 05, 2011, 01:27 AM | #

The true cause of the housing bust and recession

@Matt Nuenke,

I know you’re sincere, but you must make a serious effort to acquaint yourself with the nature of money as you’ve inadvertently promoted nonsense and propaganda from those who present the greatest threat to us.

You can verify that since 1913, except for coins, all American money is created out of nothing, as debt, by banks. Most of this money doesn’t even exist as bills, but as computer entries.

So let’s look at the factors behind the housing crisis and recession [economic jargon in brackets].

People ask for loans to buy houses. Since nearly all money is created as debt and most money out there in circulation represents debt, it’s impossible for the vast majority of people to avoid taking out loans.

As noted, the bankers provide these loans by creating the money out of thin air [fractional reserve banking]. The bankers enjoy the interest payments, but why stop here? They sell mortgages to investors [collateralized debt obligations; CDOs], not telling them that there’s no way the debtors can pay them off as only the bankers get to create money, which they do out of nothing. But why leave it at this? They sell insurance to cover the risk of people defaulting on their mortgages [credit default swaps; CDS’]. Why not make more money? They gamble on the probability of defaults [speculation]. But there’s more wealth to be made.

Since nearly all money’s being created as debt, what happens when the bankers loan less and start recalling loans increasingly? The money supply shrinks and there’s a recession. Less money means more defaults. So now the bankers get to acquire the assets of those defaulting for pennies on the dollar. Via insider knowledge, the net effect of trade regarding CDOs, CDS’ and speculation is wealth transfer from the general stockholder population to those at the top of the food chain; note net effect, as superficially some of the big names will also be “losers.”

This general mechanism’s behind recessions, including the recent one. Bankers, through their agents and the media they’ve bought, give us all sorts of useless leads, but it’s they who’re responsible. It starts from fraudulent [invalid] loans, and there’s not a shred of truth in the housing crisis resulting from giving lots of loans to people who weren’t qualified or likely to pay them off as not one of these loans was valid in the first place.

It’s telling when you’re thanked by the likes of unambiguously malicious people, such as Leon Haller, for posting the article and hence bankers’ propaganda. Haller again reveals his malice, just like some of his heroes such as Rothbard, when he acknowledges the problem of fractional reserve banking and even calls for its abolition on more than one occasion, but when it boils down to it, which in this case is the propaganda you’ve posted, he doesn’t correct you that all loans were fraudulent to start with, that fraudulent loans were sold to investors, fraudulent loans insured, fraudulent loans gambled upon, fraudulent loans earned interest on, and fraudulent loans that defaulted when bankers voluntarily reduced the [fraudulent] loans in general they were giving out to shrink the money supply… he thanks you! This reveals his lip service to the notion of abolishing fractional reserve banking.

This money issue’s by far the most important of all issues that’ve been discussed at MR, and it’s terrible when bankers’ propaganda is promoted in such a prominent manner. The solution’s some sort of money FAQ at MR, complete with the statutes and regulations under which money’s created and maintained so that readers can verify for themselves the nature of money, disinformation agents such as Haller are effectively dealt with, and good-intentioned people don’t mistakenly promote bankers’ propaganda.

Posted by anon / uh on November 05, 2011, 04:37 AM | #

A surprisingly lucid comment by J Richards [weirdo conspiracy theorist].

Imputations of malice and disinformation are weak points. Someone might consider simply banning Haller. Not advocating that, but you are faced with a totally irreconcilable worldview in the person of a seemingly indefatigable exponent, so it makes strategic sense to be done with it — and have a Money FAQ.

Posted by Leon Haller on November 05, 2011, 09:25 AM | #

It starts from fraudulent [invalid] loans, and there’s not a shred of truth in the housing crisis resulting from giving lots of loans to people who weren’t qualified or likely to pay them off as not one of these loans was valid in the first place. (JRichards)

That sentence is completely nonsensical. By Richards’s ‘analysis’, what bank loan is ever NOT “fraudulent”?

@JRichards

You call the excerpts from Woods (a sound scholar as well as ‘popular intellectual’ writer, btw) “nonsense and propaganda”. Are you saying Woods is dissembling? Or that you simply disagree with the thrust of Woods’s case - that the “meltdown” was caused by the intersection of several different government policies (CRA, Fed monetary expansion, relaxed loan standards, etc)?

Posted by Leon Haller on November 05, 2011, 10:04 AM | #

Imputations of malice and disinformation are weak points. Someone might consider simply banning Haller. Not advocating that, but you are faced with a totally irreconcilable worldview in the person of a seemingly indefatigable exponent, so it makes strategic sense to be done with it — and have a Money FAQ. (anon/uh)

Well, it wouldn’t be a first. I’ve been banned at nearly every rightist-oriented site on the net. Why? My comments are usually more learned and better expressed than most others’. Often, there are individual commenters who respond quite positively to me. But always the same eventual result.

Why? Apparently, I am the very last of a breed - a true conservative of the American ‘old-school’. That is, I am an Occidentalist - someone who wishes to perpetuate traditional Western Civilization (European/North American Civ pre-1960s, the period of the “Great Disruption”), which I understand to be both white and Christian (and in the US context, essentially individualist/libertarian). Apparently my views, which were pretty much the mainstream of American thought (at least, conservative thought) for most of its history, are now universally anathema to the increasingly sectarian Right(s).

Though I agree with libertarians on most matters, I am banned (eg, from CATO, Mises) because I stress the primacy of race (ie, that individualism, to endure, must have racial boundaries).

Though I agree with Christians on most things, I am banned (eg, from First Things, various Catholic blogs) because I ask politically incorrect questions, which those ‘conservatives’ are too afraid to answer.

Though I really primarily belong amongst the paleoconservatives, I am banned (eg, from takimag, and even Chronicles - despite being a 25 year magazine subscriber!) for stressing the racial element of the West (exactly as Sam Francis did), as well as for my excessive “biologism” (ie, demanding that behavioral genetic insights be incorporated into conservative theory).

Each ideological tendency sees itself as wholly self-contained, and accordingly resents having outside insights brought to bear on its concerns. Thus, I would not be surprised to be banned here, too. WNs do not like Christianity, and many dislike free enterprise, too.

Truth, however, is not comprehensively captured by any single ideology.

Anyway, I’ve already begun exiting MR, and this due not only to my much increased work schedule of late, but also to the site’s loss of most of its better commenters, and concurrent hijacking by much lesser elements (surely you, too, have noticed the cognitive decline?).

What I need to do is to start formally publishing, perhaps transforming the occasional school paper into an article submission (I try to structure papers so as to further my eventual scholarship interests; eg, contra Lister, I’m not going to be taking a course or writing a paper on any aspect of Mariology, as that kind of theological issue has nothing to do with the Occidental political crisis, and thus is not what I came here to study).

Posted by Captainchaos on November 05, 2011, 11:13 AM | #

banning Haller

Wouldn’t it be more useful to keep him around as a foil? At least so Richards has something to make fresh hats out of, I mean.

Posted by danielj on November 05, 2011, 11:51 AM | #

Well, it wouldn’t be a first. I’ve been banned at nearly every rightist-oriented site on the net. Why? My comments are usually more learned and better expressed than most others’. Often, there are individual commenters who respond quite positively to me. But always the eventual result.

Priceless gem you! I, for one, hope you stay, accept instruction from people here who are very obviously your intellectual equals and superiors, learn some humility, eschew obfuscation and ideology and grow.

I still challenge you, nay defy you, to find in Weaver and the broader republican (ancient conservative) tradition any praise for commercialism; especially of the Austrian kind. The family is prior to the market.

Posted by Leon Haller on November 05, 2011, 03:35 PM | #

I, for one, hope you stay, accept instruction from people here who are very obviously
your intellectual equals and superiors
, learn some humility, eschew obfuscation and ideology and grow. (danielj)

Really? And these are ...?

I still challenge you, nay defy you, to find in Weaver and the broader republican (ancient conservative) tradition any praise for commercialism; especially of the Austrian kind. The family is prior to the market. (danielj)

I have Weaver’s books: Ideas Have Consequences, The Southern Tradition at Bay, a few others kept in print by the wonderful Liberty Fund (which likewise republishes Mises, Hayek, and others in that tradition, too).

Of course the family is prior to the market. I am a conservative. And I don’t particularly praise commercialism. I have merely asserted that the Austrian methodology represents the correct approach to understanding the economy; that it is value-free, as with any logic (or science); that capitalism maximizes wealth generation; and that recognizing the latter fact does not entail one’s becoming a libertarian (let alone replacing God or Western tradition with the metaphysical sophistries of Ayn Rand).

What is really interesting about my position is why it keeps being misrepresented here.

Posted by Leon Haller on November 05, 2011, 03:39 PM | #

Captainchaos,

JRichards is an exceptionally confused individual. I would not look to him if you seek genuine understanding about anything.

I can only wonder why GW has granted someone like that site admin privileges (what in the world were you thinking, btw, GW? want to lessen MR’s credibility?).

Posted by Leon Haller on November 05, 2011, 05:26 PM | #

Your biologism, respectable for its pluck though it be, stops absurdly short of the ecological plenum in which we exist. (anon/uh)

Please elaborate.

history has surpassed that paradigm. It appears to be a “disruption” only in proximate view. In a longer view, encompassing the Industrial Revolution and other big avalanche effects, pre-1960s culture was foredoomed by its own technology (ditto)

I’ve thought of that, though it is one of the Big Questions, perhaps unresolvable. I disagree, however. Ethical laws are eternal. For Christians, metaphysical truths are likewise timeless, as are physical laws for scientists. Moreover, cultures adapt to changing circumstance, whether technological, environmental, geostrategic, etc, without necessarily extinguishing their essences. Jews are still Jews, after thousands of years. Are modern Chinese so different from their ancestors? Are we (I mean non-PC whites)?

Historians like to emphasize the reality of both change and continuity. Whites in 1960 lived in a world utterly different from that of whites a century earlier (by contrast, our world is not so very different from 1960; eg, I just saw The Rum Diary, set in ‘61; I suspect, even in historical time, as against cinematic imagination, life in that year would have seemed reasonably familiar to us). Yet in many respects their outlook would have been likewise reasonably familiar to whites on the eve of the Civil War. I have friends, by no means as Far Right as I, whom I believe would have been tolerably at ease conversing with a Jefferson or Hamilton. I myself would be able to ‘relate’ to one of those men more easily than I can to most PC CA whites of the present.

No, I disagree that the triumph of race-liberalism and all its weird effects was inevitable. This was the product of a deliberate set of policies, themselves borne of particular power relations resultant from earlier struggles (eg, WW2 and its aftermath). Things could have turned out differently, and better. The question now, however, is whether these changes are irreversible, and on that matter, I venture no opinion.

Posted by anon / uh on November 05, 2011, 06:02 PM | #

Moreover, cultures adapt to changing circumstance, whether technological, environmental, geostrategic, etc, without necessarily extinguishing their essences.

Yes, but they become impossible to extract or separate from those adaptations. This idea has been going around the game blogosphere, especially at Chateau Heartiste and xsplat: the idea is that the behavior of modern women cannot be corrected system-wide because it is has arisen from their enfranchisement by various urban technologies; to correct women means correcting technology. To turn them all around would require the total extirpation of the Western “system” (impossible) and reversion to an earlier stage of society, symbolized by my pet imperative: “Vote Taliban”. Eternal verities exist as weeds poking through the cracks of great concrete slabs in the city; however many come up, one would have to remove the slabs to achieve full growth. And very few people, nearly all white, are willing to give up urbanism — while very very few would be willing to destroy it. I happen to be one, for what it’s worth. Imagine The Money Wrench Gang everywhere at once ... grain silos ... crops ... electrical grids ... roads, parliament buildings, autobahns ... rice paddies ... total assault not only upon civilization but before all its energic preconditions ...

The cacoethes of modern civilization must vitiate traditional and classical ethos. Look at me, another internet pundit!!

Jews are still Jews, after thousands of years.

... not quite though. Just today, in private correspondence, I was told we have to refine the way we speak of Jewish-Gentile relations with reference to biology. I fear the matter flies over my head, but my one contribution was that Jewish behavior has evolved significantly since their arrival in the Rhineland from the Roman exodus — that is their invasion of mainland Europe outside the Wandrin’s “mercantile latitudes” where they weren’t quite as controversial despite the elite Roman disdain for their manners. Their European advent is the dawn of the Age of Pogroms, the discrete sub-narrative of sanctions and expulsions they incurred throughout Europe, from the Rhine to the Volga. In functional terms they went from their remote origin as a marauder / mercantile people with a competing victim identity to a much fuller victim ideology that evolved under European “persecution” and confinement to the ghettos, despite all the wealth and influence accumulated in London trade and German professorships. Jews are still Jews, but functionally, they must be ordered as Jews₁, Jews₂ to properly account for this phenotypic mutation. The Ashkenazi diaspora in America would perforce be Jews₃ in this scheme as it represents the ultimate refinement of the victim ideology and its Gentile reflex in “political correctness”. Yes they are still sporting yarmulkes and forelocks, but they have not been completely static — not genetically, not behaviorally, not culturally or ideologically. Change and continuity, as you said.

I myself would be able to ‘relate’ to one of those men more easily than I can to most PC CA whites of the present.

That is a very attractive idea. It is certainly useful as a measure of how far one has “mutated” from some cultural norm. I would obviously have little to say to Jefferson or Hamilton, though I would surely sit quietly and listen to whatever homilies they might be disposed to deliver, while wogs and twogs would rebel in some fashion.

But what if your Asian girlfriend were with you, and what if the chat turned to economic matters? I very much doubt those gentlemen would take your tastes in stride!

Have you ever gone among relatively “primitive” people? Even among Uruguayans and Germans I felt rather like an alien with my gestures and “irony”. This is no trivial matter. As facile as it is to imagine a bureau-side chat with the Anglo-American greats, there are dozens of variables left out of account to allow for this fantasy, which I have found even with individuals of modern populations.

Things could have turned out differently, and better.

If you believe affairs could have turned out differently, you will be agnostic on the question whether affairs are irreversible. I well understand the attraction of the idea, which is basically hindbrain-compulsive, that affairs can be reversed. Technological linearity means they cannot be.

sincerely,
another conceited world-wide-web armchair pundit

Posted by Robert Reis on November 05, 2011, 09:03 PM | #

Problem and Solution:

http://www.zerohedge.com/news/guest-post-collapse-our-corrupt-predatory-pathological-financial-system-necessary-and-positive

http://www.washingtonsblog.com/2011/11/real-capitalists-move-our-money.html

Posted by J Richards on November 06, 2011, 09:54 PM | #

@Robert Reis

Those links you posted [@ 38] aren’t proper solutions. The zerohedge post recommends nullifying noncollectable debt, which’s the vast majority of debt. Since most money out there represents debt, nullifying most debt means removing most money and collapsing the economy, which the author realizes. But how is collapsing an economy beneficial when there’s no plan to replace the monetary system with a better design or is one naive enough to think that a better system will just emerge after the economy collapses?

The other solution recommends moving money from banks to credit unions. Whereas this’ll help slightly, it still doesn’t address the problem that the money being moved around still represents debt.

The correct solution’s to replace money as debt with debt-free money. A replacement process leaves the amount of money in circulation intact. The way to achieve this replacement is for the government to retire the national debt by printing debt-free money and simultaneously forcing banks to maintain 100% reserves [banks don’t get to create any money]. You can read up on the details here: http://www.themoneymasters.com/monetary-reform-act/

Posted by J Richards on November 06, 2011, 10:02 PM | #

@Haller

What’s nonsensical about the loans [mortgages] being fraudulent and how’s this [merely] my own analysis? Read the Federal Reserve Act on how banks come up with loans. You already know the answer as you’re familiar with fractional reserve banking.

A debt’s valid when the loan involves asset transfer, which isn’t the case here. The banks didn’t transfer their money to the people who took out mortgages but created this money out of nothing.

I’ve already answered whether I disagree with Woods that “the “meltdown” was caused by the intersection of several different government policies (CRA, Fed monetary expansion, relaxed loan standards, etc).” What government policies are being talked about here? The Fed’s a private bank that has nothing to do with the government. The loans were provided by banks, not the government. The government isn’t capable of loaning any substantial amount as the only money it creates is coins, and any government bailout/loan is simply the government borrowing money to provide it.

Regarding relaxed loan standards, the issue’s meaningless. If the bankers create loans out of nothing, what does it matter to them whether they loan to someone who makes 25k/year or 250k/year? The banks don’t have anything to lose as they’re not giving away their money, and in both cases they make money off of interests, more so in the case of the debtor with greater income, in which case they’re also able to extend the period during which they sell CDOs and CDS’ to naive investors.

It’s the bankers who create economic bubbles by relaxing loan standards. Since money’s created as debt, more loans means more money for discretionary purchases and there’s an economic boom. Blaming the government for pressuring banks into lending to unqualified minorities is completely misplaced as the banks never gave their own money to the people but simply created it out of nothing. These banks can repeat the same process today and create an economic bubble in days, but they won’t do that as they periodically loan less to cause a recession so that they can make many people default and acquire their assets for pennies on the dollar.

To hell with you Haller. You can’t dispute these facts, only come up with ad hominem. Wait till there’s a money FAQ here. I’ve already noticed that you’ve begun exiting from MR, and others have noticed the same. Good riddance.

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