Financial Crises: Now and Then

Well, the crisis is here and swirling all around us.  You can tell by the pained and pinched looks on the faces of the members of Congress, Cabinet officials, and in particular Treasury Secretary Henry Paulson. All the king’s horses and all the king’s men—you know the rest of that one. 

You can’t tell a crisis is with us, here in this valley, by the throngs of people downtown last weekend, lining up for the Leonardo exhibit at the Tech and the Sharks game at HP Pavilion, those carrying shopping bags in Valley Fair, and thousands lining up at Farmers Markets from Santana Row to Campbell.

What crisis?

From the oddly mirthful look on George Bush’s face, to the brevity of his comments, to his faux crisis demeanor,  we have never seen a leader as calm as this. Unfortunately, it is the result of a disconnection and obtuseness that is as unique as it is frightening in the modern annals of the presidency.

When the going gets tough, Bush heads for the ranch. This can be quite a mistake in a mayor and an unmitigated disaster in a president.

In San Jose, we had a financial crisis in 1984, when our leveraged bond market investments nearly caused the collapse of the city’s financial health. I was mayor; I would have dearly loved to hide. Unfortunately, my ranch was on the other side of Mount Hamilton, and all the brush had been cleared—by someone else. There was no place to hide.

I went on television. I told our citizens that we had suffered a horrible financial disaster. I assured them it was a case of stupidity, not corruption. I told them we were going to be alright. I concluded with the old slogan: “We took a licking and kept on ticking.” I don’t know if it was the perfect thing to do, but it accomplished the goal of reassuring people, and letting them know that we indeed were going to persevere and come out alright.

Mayors and Presidents should never hide and must, by all means, look like they give a damn. It also helps if they look a bit engaged.

An economic Katrina is hitting every state and far too many households. It is man-made, vintage Bush, and we can only wonder how long, oh Lord, how long must we suffer this mixture of incompetence and arrogance that is bringing our nation low.


  1. Obligatory references to the Tech Museum and HP Pavilion?  Check.
    Obligatory Bush derangement rant?  Check.

    Not much else to see here.

    But here’s something interesting.

    Ever hear of ACORN? 

    ACORN is the activist “community organizer” outfit for whom (along with La Raza) the Democrats loaded much pork into the ‘bailout plan’ to steer money towards.  (By the way ACORN has been indicted for vote fraud in several states.)

    Never heard of ACORN?  Thought so.

    As it turns out, our man Obama has heard of ACORN.  In fact there is *much* direct Obama ACORN linkage.

    “Chicago ACORN sought out Obama’s legal services for a “motor voter” case and partnered with him on his 1992 “Project VOTE” registration drive.

    In those years, he also conducted leadership-training seminars for ACORN’s up-and-coming organizers. That is, Obama was training the army of ACORN organizers who participated in Madeline Talbott’s drive against Chicago’s banks.

    More than that, Obama was funding them. As he rose to a leadership role at Chicago’s Woods Fund, he became the most powerful voice on the foundation’s board for supporting ACORN and other community organizers. In 1995, the Woods Fund substantially expanded its funding of community organizers – and Obama chaired the committee that urged and managed the shift.”

    Why was Obama targeting banks?
    To force the banks to make loans in the name of ‘affordable housing’.

    And we all know how well that turned out.

    It’s amazing that the news divisions at ABCNBCCBSMSNBCCNNKRONKABCKNTV have missed this one.

    But I guess bigger news stories need to be investigated – like that tanning bed in the Alaska governor’s mansion.

    2008.  The year journalism died.

  2. You are absolutely right. Journalism has died and we now get editorials in the form of news articles. We are caught in the vortex of a depression and what makes it seem especially bleak is we can’t trust the news reporters who are suppose to be investigative and objective gatherers of the facts. Our countries moral and work ethics from the corporate heads of Wall Street, our politicians, and the media, have seemed to rot from the inside out and we see them all with a jaundiced and myopic view. The media has always been the check and balance from the other two, but no more. The media has been corrupted. Unchecked greed, whether for personal or financial gain, is the common denominator.

    Also, this recession/depression is BOTH the doing of democrats and republicans alike. Acorn, as Novice pointed out, is a corrupt organization pushing a socialist agenda, supported by Obama, which has gotten little coverage in the mainstream media. Obama has gotten a free pass on other issues and connections in his past.

  3. Always good to hear from Novice. Journalism died in 2008? I guess the piss-poor reporting on the crimes of the Bush Administration count as stellar reporting? Give us all a break, Novice. Even though you would like this to be some grand, left wing, media conspiracy, it’s not. Bush has gotten away with more in the past 8 years than he would have had their been proper press coverage. There is enough lack of reporting on both sides to go around, so please don’t make this a one-sided spin.
    Oh, and about that tanning bed—just who paid for that??

  4. Novice.. i’m sorry.. but the premise of the first link you posted is just silly.. SILLY!!

    WHAT exactly does a “community organizer” do? Barack Obama’s rise has left many Americans asking themselves that question. Here’s a big part of the answer: Community organizers intimidate banks into making high-risk loans to customers with poor credit.

    “In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes – and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers.”

    Really that is silly.  You really want me to believe this?? REALLY??  Those two paragraphs are enough to dismiss you as silly.

    REALLY THE BANKS WERE FORCED?? REALLY?? You’re a very silly person!!

  5. Actually, I had a different experience last weekend. I wanted to get a winter jacket for my son. So, we headed to Department Store A. Outside was a 1/2 off sale (It had the feeling of a fire sale), inside were very few customers and even fewer employees. The place felt very strange. Finally finding an employee, I asked “Are you going out of business ?” … “No” replied the individual. Things still felt strange. Not finding a jacket, we proceeded to drive to Sporting Good Store B in San Jose. Once inside we were surprised to find a complete department without any merchandise. Asking an employee what’s up ?
    The response was “Oh we’re just re-organizing”. Again, Things felt strange.
    Not finding our particular jacket here, we then drove to Department Store C in San Jose. Again, a small number of customers, all holding coupons and taking the 50% off
    savings. … Three places, all felt alittle strange. Just an observation.

    … I wonder what Christmas is going to feel like ?

  6. So with that logic.  If PETA would have pressured banks to give loans to dogs, the banks would have caved into the pressure, and then we could have blamed dogs for this mess?


  7. #5 I too had a different experience last Saturday.  While waiting for an appointment, I went into Happy Dragon, a thrift store in Los Gatos.  It was packed with customers of various ages.  I remarked to one woman about the amount of people, she said, “Must be a sign of the times.”  This was really an eye opener.

    #9, right on!

  8. The untold story is that reporters are depressed and cowed.  We don’t have reporters left at our local paper who really give a damn about exposing local leaders or businesses for their failings.  Everyone’s cozy.  Reporters fear that they may be job hunting so don’t want to piss off the powers that be. 

    It would be better if reporters were loyal to their institutional history and reminded themselves that they perform a public service by speaking truth to power.  Sure an editor or reporter may have fewer friends but the paper would have more integrity. 

    I can think of lots of examples of this but would rather ask others to weigh in as I have had my say.

  9. Let’s see if I’ve got this right: the government steadily erodes important banking safeguards, then the president, in a series of high-profile press conferences, directs the two most powerful government sponsored financial enterprises to make available mortgage funds (with traditional safeguards removed but race directives in place), thus creating a housing bubble that sends the mortgage industry and an army of race merchants into a feeding frenzy, and from this East Side Dre, spouting the liberal line, comes away confident that the meltdown was a simple matter of corporate greed.

    How is it that liberals, staunch and passionate proponents of the Evil Environment Theory (hostile workplace, sexually inappropriate atmosphere, good old boy network, siege mentality) have been so quick to zero in on the failings and excesses of the mortgage industry, while having next to nothing to say about the political and economic environment in which that industry has been operating? How is it that the same folks who would imprison an oil company president for the reckless acts of a negligent employee, or indict the police profession for the isolated actions of one officer, or retool an entire academic department for the politically-incorrect opinions of one professor, are so eager to ignore and deny the government’s gross and undeniable complicity in a disaster of such magnitude? 

    Why? Might it have something to do with the fact that the political engine that heated the market to meltdown was fueled by race pandering and class warfare—strategies too sacred to liberals to criticize no matter the cost. Congressional liberals had worked duplicitously for decades to increase Black and Hispanic home ownership because that’s what socialists do—work the rules to redistribute wealth (especially to themselves). Then President Bush joined the whore-us-for-diversity chorus for the same reason he does most things, because he’s stupid. The president actually thought that granting amnesty and easy home loans to Mexicans would turn them into Republicans. In other words, he thought that the way to attract Mexicans to the party ostensibly for limited government was for the government to be unlimited in giving them things. That’s akin to the idea that you can bomb and ravage a nation into loving your country for its peaceful ways.

    The mortgage crisis has an all-too familiar odor, that being the stench of rules surrendered, truth buried, chaos denied. It can now takes its place with education, immigration, health care, crime, and foreign policy as one more odoriferous element in the decline of a once great nation.

  10. New York Times
    September 30, 1999

    Fannie Mae Eases Credit to Aid Mortgage Lending

    In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders. Mae Eases Credit to Aid Mortgage Lending&st=cse

  11. It is…what we choose it to be.

    Politicians at both major parties, bankers, Wall Street, and those who chose to (re)elect the politicians while spending and borrowing beyond their means are to blame for this crisis.  All of this to pursue the so-called American Dream. 

    Thankfully, I learned growing up in New Jersey to never to spend outside my means, save as much $$$ as possible, invest wisely, use credit only where absolutely necessary and to pay it all back immediately when credit is used.  As a renter for life, while I have seen the effects of this crisis result in a 25% rent increase for me over the last 3 years, at least I don’t have a house or condo in foreclosure.

    Most importantly, I learned to do my homework before signing any contract – particularly a mortgage contract – by making a trip to my local library.  When I learned that a “zero-interest” rate would shoot the mortgage on the condo I was considering in Capitola to $3000/month within a year from $500/month, I immediately returned the contract and all related materials unsigned.

    I also learned to read news sources outside the USA.  (Two words: BBC America) Way too much spin from all the networks here for my liking with this current Presidential campaign.  I plan on voting for one of the “third party” candidates, as both Obama and McCain both played roles in the current crisis at the Senate level. 

    Words do not describe the joy I felt when I learned Congress rejected the $700 billion bailout.  Given how Congress’ email was jammed with protest letters from people like me who refused to help subsidize consumer and corporate greed, perhaps this country is slowly starting to wake up from its American Dream.  Let’s keep it up and not revert to the bread-and-circus mindset that greed and corruption feed on.  Bombs and guns can kill people.  Apathy can kill a country.

  12. Dre,
    It’s called a shakedown.  Here’s how they do it in Chicago.

    “Critics have also questioned why two of Mr. Jackson’s sons, Jonathan and Yusef, both on the board of the Citizenship Education Fund, received a lucrative beer distributorship from Anheuser-Busch although they had no experience in the beer industry. Mr. Jackson, who organized a boycott of Anheuser-Busch in the early 1980’s to protest its minority hiring practices, said his sons were qualified to run such a business.”

    It’s common knowledge that Chicago is the epicenter of “machine” politics.

    Anyone ever wonder or thought to ask or look into how the “Hope and Change” Messiah took on Chicago style corruption? 

    Anyone thought to investigate The Chosen One’s time in Chicago?

    Rezko?  Ayers?  Wright?  Now Talbott? 
    These are very interesting characters, no?

    Wait a sec, here’s one I just found. 

    “A $100,000 state grant for a botanic garden in Englewood that then-state Sen. Barack Obama awarded in 2001 to a group headed by a onetime campaign volunteer is now under investigation by the Illinois attorney general amid new questions, prompted by Chicago Sun-Times reports, about whether the money might have been misspent.”

    This is funny.

    Check out the media ‘coverage’ of tanning-bed-gate versus Obama’s botanical garden scandal.

    See a discrepancy there Jimmy?  The mainstream media’s interest in Obama?  Not so much.

    As for who paid for the scandalous, salacious tanning bed… Climb down off the ledge Jimmy.  Are you ready?

    “Palin had the apparatus installed in the mansion in Juneau, and a spokesman for the Alaska Department of Transportation and Public Facilities, Roger Wetherell, confirmed the account to Politico.

    “She paid for it with her own money,” Wetherell said in an email.

    You can rest easy now Jimmy.

  13. frustrated finfan #13,

    You are right on the money about the true roots of this, the latest mess caused by the liberal, no, socialist mentality that has taken over in this country- this country that fought a 40 year cold war against the very ideology that it is now naively and recklessly embracing.
    And why is it that the same Democrats who were practically wetting their pants over the thought of a Ken Lay indictment have nothing to say about the possible criminal behavior of Clinton appointee Franklin Raines? Hmmm? The Enron scandal was a pipsqueek compared to this crime.
    But as regards to Mr. Bush, I and many other conservatives have been extremely angry, annoyed, betrayed, and puzzled by his behavior over the last 6 years or so.
    You may be correct in attributing it to simple stupidity but I have been wondering if there isn’t a different dynamic in play;

    Ever since September 11, 2001, the single thing that has occupied Bush’s attention, rightly or wrongly, has been the war against terror. He has shown that he will go to just about any lengths in order to pursue this war. Perhaps the very non-Republican, non-conservative domestic positions and programs he has supported- positions and programs that have made him very unpopular within his own party-have been the result of capitulation to the Democrats in Congress- he gives them some of what they want in order that they continue to fund his war.
    I have no evidence other than circumstancial to support this theory, but it would explain a lot.

  14. – Rahm Emanuel was a former Freddie Mac board member?

    “According to House Oversight Committee staff, Emanuel has received assurances from Pelosi that she will not allow what he termed a “witch hunt” to take place during the next Congressional session over the role Fannie Mae and Freddie Mac played in the economic crisis.

    Emanuel apparently is concerned the roles former Clinton Administration members may have played in the mortgage industry collapse could be politically—or worse, if the Department of Justice had its way, legally—treacherous for many.”

    – Barney Frank’s lover was a director at Fannie Mae?

        “Moses was the assistant director for product initiatives at Fannie Mae and had been at the forefront of relaxing lending restrictions at the company for rural customers, according to the Feb. 23, 1998, issue of National Mortgage News (NMN).

    The Washington Post reported Frank, who is openly gay, had a relationship with Herb Moses, an executive for the now-government controlled Fannie Mae. The column revealed the two had split up at the time but also said Frank was referring to Moses as his “spouse.” Another Washington Post report said Frank called Moses his “lover” and that the two were “still friends” after the breakup.”

    We need nothing less than a McCarthy witch hunt and a march on Washington DC.

  15. Dre,
    More examples of how the shakedowns are done via the thugs at La Raza, ACORN, and Greenlining.

    Be sure to send them a Christmas card this year thanking them for their part in the bad mortgage spawned meltdown we’re in.

    “As with so many marginal ideas, this one is coming out of California. A proposed bill there would have required foundations with more than $250 million in assets to report the racial, gender and sexual orientation of their board members, staffs and grantees. The bill’s sponsors recently agreed to drop the issue in return for a political payoff of millions of dollars from 10 of the state’s biggest charities.”

    “Activist groups were encouraged to agitate by the Carter-era Community Reinvestment Act, which enshrined in law a kind of lending protection racket. Banking regulators were given the power to make trouble for banks that failed to lend enough money to so-called underserved communities. Banks that paid enough—whatever that means—got left alone, but banks that didn’t, got their legs broken.

    After CRA came into effect, Saul Alinsky-inspired “community organizer” groups such as Greenlining, ACORN, and National Council of La Raza got into the shakedown business.”

    And to bring it full circle.

    “Alinsky’s teachings influenced Barack Obama in his early career as a community organizer on the far South Side of Chicago.  Working for Gerald Kellman’s Developing Communities Project, Obama learned and taught Alinsky’s methods for community organizing.”

    Obama is nothing less than a shakedown artist in sheep’s clothing.

  16. #12 has it right. The lead of a story written by Dennis C. Theriault of the Murky News on 9/30/08 read: “Officers arrest 1,157 emigres”.

    First of all, the word “emigre” comes from emigrant, and means “a person forced to emigrate for political reasons”.

    An emigrant is one who LEAVES a country, not one who enters it.  One who enters a country is a IMMIGRANT.

    Further bluring the line—no, erasing it—between reporting and editorial opinion, the article doesn’t mention until way down the line that the arrestees were all either ILLEGAL immigrants, or persons legally deported who either hadn’t left our soil, or returned ILLEGALLY.

    Personally, I welcome everyone who comes to this country to work, and do not welcome anyone here, whether legally or illegally (even those born here) who wants to suck off the system.

  17. In this thread we see the latest version of the stab-in-the-back theory coming from the right: their new line is that liberals caused the housing crisis by forcing banks to loan to minorities.  This is pathetic and disgusting, not to mention totally disconnected with reality.

  18. Joe Buck,
    I’m not sure what you’re getting at.
    Is it the “minority” thing that you object to?
    Do you deny that this mess was caused by millions of people taking out mortgages that they shouldn’t have? What? Please tell us what?
    Those are a couple of questions I’d genuinely like to read your answers to because it’s so excruciatingly frustrating to listen to people who fail to understand something that to me is so patently obvious.

    Maybe you’ve got some questions for me too?
    I’d be happy for the chance at some dialogue.

  19. #20 Joe Buck,
    That is exactly what happened in the pursuit of everyone owning a home, even those that could not afford one. That is why Freddie and Fannie were created and the rest of the house of cards built on that has collapsed.

  20. Sorry to disillusion you, Joe Buck, but it was indeed Bill Clinton that started the ball rolling with loosening standards @ Fannie Mae so that poor people could buy homes.  It was reported in the NY Times in September 1999.

    That is not to say the Dubya’s administration didn’t continue it; but this is not just a party issue.  Deregulation started with Slick Willy & the ball ran downhill faster with Dubya and a Democratic controlled Congress.

    Now we’re all paying the price…well, all except the folks who made hundreds of millions.  They walk with their bonuses and golden parachutes.

  21. ACORN’s in the news a lot lately.

    “Nevada authorities have raided the Las Vegas office of the community-organizing group ACORN seeking evidence of voter fraud.

    Investigators seized records and computers from ACORN, the Association of Community Organizations for Reform Now. The office was unstaffed at the time.

    Secretary of State Ross Miller said fraudulent registrations included forms for the starting lineup of the Dallas Cowboys.”

    Now let’s link ACORN to Obama (again).

    “U.S. Sen. Barack Obama’s presidential campaign paid more than $800,000 to an offshoot of the liberal Association of Community Organizations for Reform Now for services the Democrat’s campaign says it mistakenly misrepresented in federal reports.

    An Obama spokesman said Federal Election Commission reports would be amended to show Citizens Services Inc.—a subsidiary of ACORN—worked in “get-out-the-vote” projects, instead of activities such as polling, advance work and staging major events as stated in FEC finance reports filed during the primary.”

    ACORN’s don’t fall from the tree?  Savor the wince.

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