|
Your donations keep RPGWatch running!
RPGWatch Forums » General Forums » Politics, Religion & other Controversies » Study: Paying for lobbyists pays off

Default Study: Paying for lobbyists pays off

April 9th, 2009, 15:18
So this is the first real public study on the effectiveness of lobbying that I have seen. Maybe this article if printed on the major newsites will get this issue into the minds of the public finally. This is a big concern, and a non-partisan one at that, because it brings into question the reality of a government by representation-by whom?, and whose agendas are really being addressed, the public or the corporations. Old questions can be viewed with more clarity such as are corporations really driving national, and international agendas, and is this good, is this serving the public interest or is it serving corporate selfishness. There are dozens if not hundreds or questions to consider, and how this effects our civilization and its direction.

Big companies that spent hundreds of millions lobbying successfully for a tax break enacted in 2004 got a 22,000-percent return on that investment — proof that for those who can afford it, hiring a lobbyist can pay handsome dividends.
…..
93 firms, $282.7 million
The study zeros in on 93 firms that spent as much as $282.7 million lobbying on the issue during that period, and ultimately saved a total of $62.5 billion through the tax change. Researchers used publicly available lobbying disclosures filed with Congress and financial statements submitted to the Securities and Exchange Commission to compare the amount each company saved with its lobbying expenditures.

"It calls into question what Congress did in 2004," said Stephen Mazza, who conducted the study with Raquel Alexander and Susan Scholz. "It clearly is a very lucrative field for lobbyists. Congress wanted to create jobs, and what they probably did was create jobs for the lobbyists."
…..
The results reflect one reason that lobbying — always a major industry in Washington — has experienced explosive growth in recent years. Companies and interest groups spent $3.42 billion lobbying Congress and the federal government in 2008, the last year for which such figures are available, according to the Center for Responsive Politics. That's a 14 percent jump from the previous year.

And there's growing evidence that companies get what they pay for — maybe a lot more — when they hire seasoned Washington hands to help them navigate major legislative fights. A separate group of business professors reported last year that companies that lobbied had better market valuations and investment returns than those that did not, and that those that did so most intensively had portfolios that consistently outperformed the market.
You can read it here:

http://www.msnbc.msn.com/id/30113628

To sum it up, I feel our space program ended up like this. "It's one small step for man. One giant leap for man kind. Oops I fell on my butt after that leap and can't get up anymore."
buckaroobonzai is offline

buckaroobonzai

buckaroobonzai's Avatar
VR nomad

#1

Join Date: Oct 2007
Location: Hungary and USA
Posts: 224

Default 

April 9th, 2009, 16:51
I've never quite understood the attitude that "good for corporations" and "good for the public" are mutually exclusive positions. As should be obvious to anyone collecting a paycheck, "good for corporations" IS good for the public. The common ground FAR outnumbers the few exceptions to the rule (pollution being the most notable exception).

Sorry. No pearls of wisdom in this oyster.
Dallas Cowboys: Division Champs! / / Detroit Red Wings: Another rollercoaster season?
dteowner is offline

dteowner

dteowner's Avatar
Shoegazer

#2

Join Date: Oct 2006
Location: Indiana, USA
Posts: 11,388

Default 

April 9th, 2009, 16:57
Originally Posted by dteowner View Post
I've never quite understood the attitude that "good for corporations" and "good for the public" are mutually exclusive positions. As should be obvious to anyone collecting a paycheck, "good for corporations" IS good for the public. The common ground FAR outnumbers the few exceptions to the rule (pollution being the most notable exception).
And corporations pay taxes too. They should get a voice at the table.

Besides, there's the argument to be made that the political climate in the US screwed up specifically BECAUSE the public gained increasing access to Congress. Thirty or forty years ago the public had virtually none and Congress actually did their job and worked cordially (for the most part) together. Now they have to constantly be running election campaigns because anything they do or say is uploaded to Youtube five minutes later.

If you can't tell I am a member of the "elected officials should do what is right and most benefits the nation", not "elected officials should do what their constituents want." The public is generally ill-informed, uneducated, and not capable of understanding most issues put before the government today. Why do you think the framers only allowed them to vote for local officials and their congressman? Voting for senators and playing a role in the electoral college is an aberration.
Rithrandil is offline

Rithrandil

I bent my wookie

#3

Join Date: Mar 2009
Location: VA
Posts: 2,299

Default 

April 9th, 2009, 18:21
I guess I have to hold up my end here.

Originally Posted by dteowner View Post
I've never quite understood the attitude that "good for corporations" and "good for the public" are mutually exclusive positions. As should be obvious to anyone collecting a paycheck, "good for corporations" IS good for the public. The common ground FAR outnumbers the few exceptions to the rule (pollution being the most notable exception).
They don't have to be mutually exclusive, but the need for companies to be profitable is a two-edged sword. If corporations totally get the bit between their teeth, they act in thier own interests always, and that may or may not benefit anyone else. Shipping jobs overseas, cutting payroll(the first thing any corporation does when things get rocky is get rid of the people making the least money—or cut their hours—I've never followed that one) closing American production facilities because you can do it cheaper and with less regulation in Mexico, ever-climbing salaries and perks for CEO's while workers salaries remain frozen or drop, etc…. What's good for corporations may be good for consumers in terms of offering product at lower prices, but I can't agree it's uniformly good for the country or the public, as we've seen with Wall Street. What was good for Bernie Madoff wasn't so good for his 'public.'

I don't see how corporations paying off politicians is any cleaner than the banks or anyone else doing it.

Originally Posted by Rithrandil View Post
And corporations pay taxes too. They should get a voice at the table.
Within reason, yes, but not one that shouts down everyone else at the table, and which is solely the result of buying influence.

Besides, there's the argument to be made that the political climate in the US screwed up specifically BECAUSE the public gained increasing access to Congress. Thirty or forty years ago the public had virtually none and Congress actually did their job and worked cordially (for the most part) together. Now they have to constantly be running election campaigns because anything they do or say is uploaded to Youtube five minutes later.
Can't find anything much to disagree with there. I think Congress is being pulled in way too many directions, and individual pols never need an excuse to waste their legislative time constantly grandstanding on every cable news channel indulging their egos and trying to suck up votes 24/7 with the ham acting.

If you can't tell I am a member of the "elected officials should do what is right and most benefits the nation", not "elected officials should do what their constituents want."
As the only living liberal in Oklahoma, I have to agree—I get absolutely no representation from my elected officials EXCEPT when they do what's right for the country.

The public is generally ill-informed, uneducated, and not capable of understanding most issues put before the government today. Why do you think the framers only allowed them to vote for local officials and their congressman? Voting for senators and playing a role in the electoral college is an aberration.
We had this discussion during the elections, and I also agree here.( Blatantninja also had some points about it.)

Unfortunately, things seem to be headed in the opposite direction. I think the result of Blagojevitch in particular will be to increasingly put everything into the form of a popularity contest…er, election. This will lead to more manipulation, grandstanding and dumbing down of issues and I don't know what the answer is afa turning it around other than education. Still, while I sometimes get upset that a staggering few eligible voters actually vote, it's also the lone bit of comfort.

Where there's smoke, there's mirrors.
magerette is offline

magerette

magerette's Avatar
Hedgewitch

#4

Join Date: Oct 2006
Posts: 7,929

Default 

April 9th, 2009, 20:07
Originally Posted by dteowner View Post
I've never quite understood the attitude that "good for corporations" and "good for the public" are mutually exclusive positions. As should be obvious to anyone collecting a paycheck, "good for corporations" IS good for the public. The common ground FAR outnumbers the few exceptions to the rule (pollution being the most notable exception).
In the end this is a non-party biased discussion, if viewed from an objective as possible, "form of government" viewpoint.

With that in mind, think of this: just because you are collecting a paycheck from a corporation does not give any corporate entity, or corporate think tank group free reign over the socio-politico-economic direction and ideology of a nation without being TRANSPARENT to scrutiny, discussion, and restraint if need be.

Sure, if there was uninanimous consensus on the goals of economic entities as aligning with national and constituent goals it would be almost arguable, almost but still not really.

One of the most striking implications of corporate leadership of the direction of nations, is that it is not people in itself that really define the goals of corporations. It is the the needs of an entity that has rights equivalent to a human being, yet whose purpose for being is selfish in the utter extreme. The goals and especially the final goal of any corporation is extreme profit for the owners or shareholders, everything else is secondary, that cannot be disputed. In and of itself, if extreme profit existed by itself on an island it would be manageable, possibly even able to brush off corruptibility. However in the complex environment it exists in, this extreme lust for profitability will not be hampered in the end by statutes, and checks and balances becasue in the end they control them.

It is impossible to say that any entity, human or corporation can control its lust or greed. This is not to say that it is a bad naughty thing to be lustful or greedy, its just a fact. The fact is humans proven through history cannot control their greed to acquire more money, especially when they have been exposed to the "wonders" it can bring to them. And the more money, and exposure to its purchasing power of goods, the easier it is to become greedy, and that greed gets pushed over the edge of accountability and what is accepted at certain crux and stress points.

Corporations, entities composed of humans, led by highly paid executives, already exposed to massive purchasing power of goods are easily congruent with the constitutions and dictates of the corporate charters. The corporate leadership is always fueled by the need to increase profit first and foremost, followed by increasing the market share and eliminating any competition.

Where is all of this leading to? Well, it leads to selfish motivations and acts by corporations which profit itself, and if need be to the detriment of anything else, humans, towns, counties, nations, and of course other corporations. There are countless cases of corporate wrongdoing, you can read about it everywhere, and there are even more that are not reported, as the wrongdoers were not caught.
The end goal of any corporation is to control the whole of the
market it is in. Microsoft does this without even being aware of it constantly on a conscious level. There expertise in runnin the OS market seeped into their desire to control web browsers by shipping IE with Windows.

If we look at the pharmaceuticals industry we can talk for decades, literally. I have a family friend who works for the manufacturer. He told us that prolonged use of Tylenol causes liver damage, he told us that 20 years ago. It is only recently that any of this information is being forced from pharma corporations. Pharma drug warnings and recalls usually only go into effect after lawsuits. Is this a good corporate leadership policy that is good for the citizenship and the country?

If you have ever worked long enough and through the different levels of large corporate structures, you will know as much.

To sum it up, I feel our space program ended up like this. "It's one small step for man. One giant leap for man kind. Oops I fell on my butt after that leap and can't get up anymore."
buckaroobonzai is offline

buckaroobonzai

buckaroobonzai's Avatar
VR nomad

#5

Join Date: Oct 2007
Location: Hungary and USA
Posts: 224

Default 

April 9th, 2009, 20:20
Originally Posted by Rithrandil View Post
And corporations pay taxes too. They should get a voice at the table.
The problem is they get the vast majority of the voice at the table. Lobby groups and citizen organizations take up the scraps…
If corporations were subject to charter, ideological, and behavioral reviews on a consistent basis by non-affiliated parties, this would make at least some sense. However politicians and corporate leadership are in each others pockets so to speak. The answer to how to mediate influence is difficult because you would need a non-corruptable entity, I don't really know if any people could fill the role-saints? haha, maybe a supercomputer or parallel processed network…

Originally Posted by Rithrandil View Post
Besides, there's the argument to be made that the political climate in the US screwed up specifically BECAUSE the public gained increasing access to Congress. Thirty or forty years ago the public had virtually none and Congress actually did their job and worked cordially (for the most part) together. Now they have to constantly be running election campaigns because anything they do or say is uploaded to Youtube five minutes later.

If you can't tell I am a member of the "elected officials should do what is right and most benefits the nation", not "elected officials should do what their constituents want." The public is generally ill-informed, uneducated, and not capable of understanding most issues put before the government today. Why do you think the framers only allowed them to vote for local officials and their congressman? Voting for senators and playing a role in the electoral college is an aberration.
Corporations and politicians themselves are also:"The public is generally ill-informed, uneducated, and not capable of understanding most issues put before the government today." as you stated Rith. It would require a cadre of independent corruption proof individuals or computers of equal vision and intellect as the orginal framers to provide true honest and beneficial leadership unbeset by the vexes of massive cash influxed lobbying.

I think lobbying groups, lobbying corporate interests, and ultra wealthy lobby funds from individuals need to be watched and reviewed. But they have to be reviewed by a group that will not be influenced by massive cash themselves…Who is invulnerable to mega cash incentives???? Maybe monks !

To sum it up, I feel our space program ended up like this. "It's one small step for man. One giant leap for man kind. Oops I fell on my butt after that leap and can't get up anymore."
buckaroobonzai is offline

buckaroobonzai

buckaroobonzai's Avatar
VR nomad

#6

Join Date: Oct 2007
Location: Hungary and USA
Posts: 224

Default 

April 9th, 2009, 20:38
Originally Posted by buckaroobonzai View Post
The problem is they get the vast majority of the voice at the table. Lobby groups and citizen organizations take up the scraps…
If corporations were subject to charter, ideological, and behavioral reviews on a consistent basis by non-affiliated parties, this would make at least some sense. However politicians and corporate leadership are in each others pockets so to speak. The answer to how to mediate influence is difficult because you would need a non-corruptable entity, I don't really know if any people could fill the role-saints? haha, maybe a supercomputer or parallel processed network…
Vast majority of the voice? Private citizens can vote. Corporations can't. In the modern era with, you know, the internet, there is no excuse for the "average person" NOT to run the table. But guess what? They don't really care to. They don't understand what goes on and they don't want to. I'm generally comfortable with corporations having a large voice at the table because they employ everyone and make things I like to own. And they're generally far more competent and far less corrupt than the federal government (the current economic crisis is an exception). If there is a quid pro quo arrangement going on then I think they should be thrown in prison, but if there isn't, then fine. Do you think the average citizen understands the economy? I am far better educated then the average citizen and I have no idea what the hell experts are talking about 90% of the time.

Originally Posted by buckaroobonzai View Post
Corporations and politicians themselves are also:"The public is generally ill-informed, uneducated, and not capable of understanding most issues put before the government today." as you stated Rith. It would require a cadre of independent corruption proof individuals or computers of equal vision and intellect as the orginal framers to provide true honest and beneficial leadership unbeset by the vexes of massive cash influxed lobbying.
I disagree with you. Politicians and corporate officers are typically well-informed over their chosen subject areas. They obviously can't know everything, which is why they have staffs. And it's why Congress has its own research/analysis staff to assist its members in understanding matters before them. If you want to say Congress is pretty ignorant, alright, I guess, but they are still exponentially better than the average American citizen.

And the "problem" of lobbying has grown with increasing access to elected officials. If you want to solve the problem, limit media coverage and access to elected officials and mandate they spend 9 months out of the year in D.C. like they used to. Things will get done and we won't have every politician on TV act like some angry harpy launching ad hominem attacks against their political opponents to score cheap points with the ignorant people who will vote for them.

Originally Posted by buckaroobonzai View Post
I think lobbying groups, lobbying corporate interests, and ultra wealthy lobby funds from individuals need to be watched and reviewed. But they have to be reviewed by a group that will not be influenced by massive cash themselves…Who is invulnerable to mega cash incentives???? Maybe monks !
I think lobbying groups need to be watched too. But only for breaking the law. Most of what they do is above the board and honest. I, for instance, think PETA are a bunch of scumbags who support terrorist activities (the WLF) and should be relegated to the same sphere that NAMBLA shares in public discourse, but they have a right to petition the government the same as any other group.

And these groups are monitored (poorly) - Look at the whole Abramoff thing, the Keating 5, Trafficant, or what have you. The problem isn't with lobbying or corporate interests, it's with Congress. Congress is responsible for monitoring and policing the actions of Congressmen. If you want to fix the problem, find a way to get an Amendment (since I am guessing the Supreme Court would strike down a statutory attempt to do this) investing those powers into an outside body of some sort.
Rithrandil is offline

Rithrandil

I bent my wookie

#7

Join Date: Mar 2009
Location: VA
Posts: 2,299

Default 

April 10th, 2009, 04:56
My parents' generation believed that business wasn't for everyone, that only special people had what it took to succeed in it. And that meant they had to have a certain special kind of intelligence matched with an equal certain kind of ruthlessness. It was understood that business wasn't for everyone.

Today people assume that anyone can succeed in business, that it's all basically good (or at least not basically evil) and that all anyone really needs to succeed at it is a good understanding of it. I can understand then how people might think what's good for business is good for everyone.

I don't see it that way, myself. I think my parent's generation had the right idea about business. Businesses are out for themselves, and we really ought to remember that. If our government representatives rely on lobbyists for anything, there's something wrong, IMO.

Oh, I wish I had a river I could skate away on. But it don't snow here. It stays pretty green. I'm going to make a lot of money, then I'm going to quit this crazy scene. — [Joni Mitchell]
Squeek is offline

Squeek

Squeek's Avatar
connoisseur of tidbits

#8

Join Date: Nov 2006
Location: Orange County, California
Posts: 1,807

Default 

April 10th, 2009, 05:10
There's over a hundred million citizens collecting paychecks from those evil, self-centered corporations. Perhaps those workers are deemed necessary evils, but I don't really see it, particularly since a fair percentage are employed in smaller businesses (having a personal relationship with ownership). If doing what it takes to be successful is bad, then we need to stop giving grades in school. No need to differentiate between achievement and failure if you don't feel fuzzy about those evil types of people.

Sorry. No pearls of wisdom in this oyster.
Dallas Cowboys: Division Champs! / / Detroit Red Wings: Another rollercoaster season?
dteowner is offline

dteowner

dteowner's Avatar
Shoegazer

#9

Join Date: Oct 2006
Location: Indiana, USA
Posts: 11,388

Default 

April 10th, 2009, 08:43
Originally Posted by dteowner View Post
There's over a hundred million citizens collecting paychecks from those evil, self-centered corporations. Perhaps those workers are deemed necessary evils, but I don't really see it, particularly since a fair percentage are employed in smaller businesses (having a personal relationship with ownership). If doing what it takes to be successful is bad, then we need to stop giving grades in school. No need to differentiate between achievement and failure if you don't feel fuzzy about those evil types of people.
Well, school grades don't really matter K-12 any more in public schools. Current policy is to promote kids to the next grade regardless of how they do (w/ some exceptions) because it is "damaging to the child's mental state" to be held back.
Rithrandil is offline

Rithrandil

I bent my wookie

#10

Join Date: Mar 2009
Location: VA
Posts: 2,299

Default 

April 10th, 2009, 19:02
I'll agree that's the functional reality in certain districts, but the step to supporting that as a global philosophy is a little bigger. Folks are very quick to take the "evil corporations" stance, but it's a little tricky how they go about supporting it.

Sorry. No pearls of wisdom in this oyster.
Dallas Cowboys: Division Champs! / / Detroit Red Wings: Another rollercoaster season?
dteowner is offline

dteowner

dteowner's Avatar
Shoegazer

#11

Join Date: Oct 2006
Location: Indiana, USA
Posts: 11,388

Default 

April 17th, 2009, 16:40
Originally Posted by Rithrandil View Post
Vast majority of the voice? Private citizens can vote. Corporations can't.
Corporations can't vote, but they and their executives (who have most of the money and assets) financially support lobby groups, political parties and politicians. Lobby groups propped by massive amounts of funds are what guide and direct public policy, by imparting massive influence on politicians.

Originally Posted by Rithrandil View Post
In the modern era with, you know, the internet, there is no excuse for the "average person" NOT to run the table. But guess what? They don't really care to. They don't understand what goes on and they don't want to. I'm generally comfortable with corporations having a large voice at the table because they employ everyone and make things I like to own. And they're generally far more competent and far less corrupt than the federal government (the current economic crisis is an exception). If there is a quid pro quo arrangement going on then I think they should be thrown in prison, but if there isn't, then fine. Do you think the average citizen understands the economy? I am far better educated then the average citizen and I have no idea what the hell experts are talking about 90% of the time.



I disagree with you. Politicians and corporate officers are typically well-informed over their chosen subject areas. They obviously can't know everything, which is why they have staffs. And it's why Congress has its own research/analysis staff to assist its members in understanding matters before them. If you want to say Congress is pretty ignorant, alright, I guess, but they are still exponentially better than the average American citizen.
The problem is that even though politicians, corporations, and even lobbyists are more informed then the general public, that knowledge is not use with impartiality nor objectivity. I don't know if it is humanly possible to do so, unless as I stated before you are an isolated monk in the mountains, or a computer. To be unaffected by the massive flauntings of power and money in political, corporate, and access to political-aka lobbyist positions is a whole field for psychology in itself. No, most people are not corrupt when they start off as politicians, or executives, but years of access to power to control people, laws, and vast wealth slowy seeps into even the most selfless, egoless individuals.

Lets look at the economic crisis, the political and economical forces leading the country were the ones that put the country and world economies into the mess. Look at my other thread:
The economic crisis causes in a nutshell
http://www.rpgwatch.com/forums/showthread.php?t=7021
""The Fed
The collapse of the Internet bubble, followed by the terrorist attacks of 9/11, threw the economy into recession and inflicted damage to the financial system. In response, the Federal Reserve, led by longtime Chairman Alan Greenspan, slashed interest rates and flooded the system with money. The economy slowly recovered, but the Fed kept rates low, providing the mortgage lending industry with a ready source of cheap capital. In 2004, near the peak of the housing bubble, Greenspan encouraged Americans to take out adjustable-rate mortgages."

Home buyers
As the housing boom turned to a bubble, buyers succumbed to the mania. Many were novice investors trying to "flip" real estate for a profit. Others, watching the American Dream recede as prices skyrocketed, justified home purchases that were well beyond their means. For some of those buyers, homeownership was simply not a realistic goal, despite the cheerleading from Congress, the White House and the housing industry.

The real estate lobby
A powerful force on Capitol Hill, led by the National Association of Realtors and National Association of Home Builders, this group championed policies to push homeownership rates to unsustainable levels. Congress and the White House went along; to vote otherwise was to oppose the American Dream. Real estate agents, armed with research from their trade group, fed the myth that home prices would continue to rise and that even if they took a breather, they would never fall by much.

Mortgage brokers
Mortgage brokers earned big commissions even if a loan eventually went bad, because their employers almost always sold the loans quickly. So some brokers stretched the rules to the limits - and beyond - to generate new loan volume. Some committed outright fraud. Others steered borrowers with good credit to higher-fee subprime loans. Borrowers were sold on the idea of overborrowing based on low-cost "teaser rates" - with the false promise that they could always refinance before the rate reset to unaffordable terms. Many mortgage brokers adhered to the letter of the law by disclosing ruinous terms in reams of closing documents, but then made contradictory verbal assurances.

Congress
Members of Congress have always been cheerleaders for homeownership, which after all is the cornerstone of the American Dream. Yet some critics have argued for limits on the virtually sacrosanct deduction for mortgage interest, which provides an incentive to buy more expensive homes. Some analysts have pointed to the Gramm-Leach-Bliley Act of 1999, which knocked down the last remnants of a Depression-era separation between commercial banks and brokerages. But others say the current crisis would have been worse without that law, which has allowed commercial banks to help rescue failing brokerages. In a bipartisan failure, Congress failed to tighten regulation over mortgage giants Fannie Mae and Freddie Mac, which ultimately failed at enormous cost to taxpayers.

Investment bankers
The idea of selling mortgages to investors originated in the 1930 with the creation of the Federal National Mortgage Association, or Fannie Mae. But those loans were made under strict guidelines; investors who bought them were reasonably well protected from loss. As the lending bubble picked up steam, aggressive Wall Street investment bankers used financial alchemy to turn risky loans to borrowers with weak credit histories into Triple-A-rated, safe investments. This fool's gold took two major forms: mortgage-backed securities and credit default swaps. The collapse of these investments is a major cause of the financial crisis.

Fannie/Freddie
As unregulated lenders generated huge volume, Fannie and Freddie wanted in. Fannie and Freddie, both of which had large lobbying operations, went to their friends in Congress and got the green light to jump into the pool of risky loans too. In doing so, the companies put profits for shareholders ahead of their original congressional mandate to serve the interests of home buyers. An accounting scandal in 2004 led to the ouster of Fannie Mae chief executive Franklin Raines and increased calls for reform, but Congress would spend five years debating how to rein in the two companies before the government takeover in 2008.

Appraisers
These professionals are supposed to prevent lenders from lending too much money when buyers bid more than a house is worth. Because they were hired by mortgage brokers, some appraisers abetted the price bubble by valuing houses based the loan amount — sometimes without even seeing the house. Some mortgage brokers would send out multiple requests for a single appraisal, giving the job to the first appraiser who could "hit the number." Some honest appraisers were forced to seek other work.

Federal regulators
Lax regulation of Wall Street and the mortgage industry have been blamed in part for the crisis. In late September Christopher Cox, chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged that failures in a voluntary supervision program for Wall Street's big investment banks had contributed to the meltdown. Yet ironically, an obscure accounting rule called mark-to-market, created in the wake of the 2001 Enron scandal, may have worsened the financial meltdown. Because many mortgage-backed securities cannot be sold, they are being priced as if they are worthless. That is forcing banks and investment firms to write down huge paper losses.

Unregulated lenders
Following a series of regulatory changes, the growth of this industry in the 1990s helped finance that decade's historic rise in homeownership rates. But as the economy recovered from the 2001 recession, and home prices soared in value, lenders had to stretch borrowers further to make deals happen. These lenders thought they bore little risk, because they quickly sold off mortgages to Wall Street investment houses. But when home prices stalled and mortgage volume dried up, bad loans soon swamped these lenders. Many of them are no longer in business.

Bond rating agencies
For decades, investors have relied on three companies — Moody's, Standard and Poor's and Fitch — to analyze and evaluate bond risks. A strong rating keeps borrowing costs low. But Wall Street bond issuers pick up the tab for these ratings, which created a conflict of interest for the agencies. Compounding the problem, these firms also offered 'consulting' services - including disclosures of their rating methodologies - to the Wall Street firms trying maximum ratings. That made it easier to design complex securities that got high ratings. Massive ratings 'downgrades' came too late to save investors.

The White House
The rise in the foreclosure rate is at the heart of the current meltdown; until it begins to fall, the housing market - and the securities backed by mortgages on those houses - will have a hard time finding a bottom. The Bush administration has opposed aggressive measures to stem foreclosures. Instead, in the early months of the crisis, it assembled the Hope Now hotline to try to prod lenders to work with troubled borrowers. As msnbc.com reported, readers told of long hold times, inconsistent advice and little help"

It was the real estate lobby, the fed's super low interest rates to mortgage lenders, appraisers, congress' cheerleading, investment bankers, federal regulators, fannie/freddie, unregulated lenders, bond rating agencies etc. etc. All the leaders of our economy who influenced the masses to do what they wanted, to buy more and more homes and goods at constantly rising unsupportable prices that the buyers could never afford in the long term. So the present system leadership that influences the direction of economic and political policy is faulty. It is not perfect of course, but it is not even the best system that can be devised. There should be discussion and ideas on how to improve and revamp the system. Mainly for starters there should be more unconnected regulators, and outsiders mingled into the insider lobby groups.

To sum it up, I feel our space program ended up like this. "It's one small step for man. One giant leap for man kind. Oops I fell on my butt after that leap and can't get up anymore."
buckaroobonzai is offline

buckaroobonzai

buckaroobonzai's Avatar
VR nomad

#12

Join Date: Oct 2007
Location: Hungary and USA
Posts: 224

Default 

April 17th, 2009, 17:02
I don't disagree with anything you wrote - I even think there needs to be strong independent regulatory bodies to monitor the system and slap down corruption/incompetence if it appears. I also have no problem with corporations/etc having a lot of influence. Lobbying serves a valuable function and citizens could easily organize grass roots efforts and start their own lobbying groups if they so choose.
Rithrandil is offline

Rithrandil

I bent my wookie

#13

Join Date: Mar 2009
Location: VA
Posts: 2,299
RPGWatch Forums » General Forums » Politics, Religion & other Controversies » Study: Paying for lobbyists pays off
Thread Tools Search this Thread
Search this Thread:

Advanced Search

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

Forum Jump

All times are GMT +2. The time now is 20:35.
Powered by vBulletin® Version 3.8.8
Copyright ©2000 - 2014, vBulletin Solutions, Inc.
Copyright by RPGWatch