It would be useful and interesting for either of the candidates to put forward legislation...

Umm... Ben Westlund already has. (PDF)

Considering Bend's housing market is in a complete meltdown, I would hope Ben would introduce some sort of legislation on responsible home buying. Afterall, his district is somewhat imploding when it comes to the housing market. Can we get a quote from Ben on how he felt when the housing prices in Bend were going through roof in mid decade? Just curious????

That's a bizarre thing to say, Mayor Leiken.

Considering, after all, that the Central Oregon Builders Association (generally a conservative bunch) has agreed that the region "should recover more quickly than the rest of the country..."

Not to mention that the Central Oregon Association of Realtors continues to issue http://www.centraloregonrealtors.com/data showing Bend home prices as remaining more stable (though still affected) than the rest of the country.

It's just odd that during session, when Westlund was working on this issue, the Reublicans tried their best to convince Oregonians that there was no problem requiring government intervention.

Now, come election time, they are apparently going to string up the Democrats for not acting quickly enough.

It boggles the mind.

(Of course, that URL is screwed up. I only meant to link to the home page; there is no /data directory.)

Legislation will create responsible home buying? Really?

The only way to create responsible home buying is for people who over extend themselves or speculate on rising home values is to suffer the consequences. The school of hard knocks (market forces) works. Generations of Democrats and Republicans understood risks - until now.

It's the government's reponsiblity is to regulate predatory lending, not to reduce people's risk or greed.

Government run institutions or private entities (Mac/Mae) don't work. Never have, never will although the political class whips people into asking for more government intervention.

The one thing Enron proved is capitalism & market forces work. Bad judgement & criminal activity will cause you to fail and go to jail.

On the other hand, Bears & Stearns, Fannie & Sallie proves socialism propogates failure, rewards bad judgement & criminal activity, and provides a spring board into the upper echelon's of the political class, providing more widespread havoic on people. (Compare Enron's accounting error's and salary/benefits for management with Mac/Mae's).

Obama owes Angelo a big favor. Imagine if Jim Johnson was still on his Veep search committee with today's meltdown of the entity that gave him millions and his political buddies favorable loans.

If capitalism purges the Enron's of the world and socialism propogates and increases the same failed policies in entities(Mac's and Mae's, Bears & Stearns of the world) - more capitalism please.

Since you're so ! (wooo! Scary noises!)

Freddie, did you ever play connect-the-dots as a kid? You know you have to connect them in some kind of logical order or it doesn't makeplugged in, I'm sure you know it's Bear Stearns... not Bears and Stearns.

So kiddies, remember the lessons for today:

1. If corporate greed bankrupts workers' pension funds, thank capitalism for rooting out that problem.

2. If a company should go under because of over-speculation, that is the specter of socialism a picture.

(Boy, did my post get its syntax screwed up.) :(

Kari

Thank you. I enjoy reading your posts in particular.

As for Blast from the past, that is exactly what the associations should be saying. As someone who has been directly involved in both the real estate and development business, I would want my associations to put a positive spin on the markets to attract home buyers to continue to look into my area. In fact, I would say Central Oregon has first class realtor and homebuilder associations in place if that is what they are saying.

I prefer Allen's Alley from the old Fred Allen radio program.

Bob Tiernan

Wait. I must have misunderstood. Did Mayor Leiken just say he's glad Bend realtors and homebuilders fought against legislation that would have stopped the "meltdown" in Bend's housing market?

I must be missing something. He now wishes Westlund had been able to do more, but he's glad that these groups effectively opposed him. Did he change his mind? Is it grudging respect for the tactics of one's enemies?

It kind of looks like he got hoisted on his own petard. He started out trying to subtly attack Westlund for not doing enough, then Blast from the Recent Past showed that Westlund tried, but was blocked by Mayor Leiken's political allies and Mayor Leiken had to punt by saying he agreed with both sides.

Is that what happened?

Sounds like it. Leiken basically said that the testimony given to the Senate Commerce Committee was simply a "spin" and as such, may have no relation to the actual situation at hand.

So - if I heard him right - Mayor Leiken is saying that it's OK to give false testimony to a Legislative Committee, so long as it's good for business?

(Also, it's the Democrats' fault.)

To Bert and Blast

I just read Mayor Leiken's posts and read yours and I don't understand your reponses at all. In Leiken's first post, wasn't Westlund a republican when Bend's housing market was increasing dramatically? I plan on voting for Ben but I also don't see a problem with him answering that question.

Leiken's second post was directly responding to Blast' comment on what the head of the Realtor and Home Builder's Associations comments were.

I'm lost now.

This thread went from discussing a candidate for State Treasurer and lenders to discussing realtors and home builders. There's also an effort to put the mayor in the dunk tank, as he does appear to be sitting on a poorly supported plank over cold water. Then there's this glassy eyes ranting about capitalist vs. socialism. Now there's something the peeks my interest.

WHAT IF Freddie Mae was to just scrape a little deeper into the issue and ask, where are the safety mechanisms to protect the investors who have these bankers irresponsibly loaning the investors' money to people who cannot afford to repay these loans? It's clear he does not give a rip about the borrowers.

Truth is, when I went to get a loan, they evaluated my credit worthiness. They also enticed me with an ARM suggesting my income would rise over the next few years to compensate for the rising interest rates, or I could refinince more favorably in the future before the rates rose. Fortunately we were smart and chose a fixed rate we could afford. Things just got easier after that when our incomes did rise rather then more difficult.

My point is that throughout the whole affair it occurred to me that we were at the mercy of the lenders' expertise. I'm not any sort of financial analyst. The lenders are, and they knew perfectly well what would occur if they floated loans to people of questionable means, and yet they developed the loans anyway and they expectedly failed. There is no reason to believe this actually surprised the financial professionals.

Now, to address they initial intent of this thread, I would only remark that it IS curious how seldom Republicans are willing to admit their party affiliation. Maybe this is just a political market correction, or maybe they just failed.

Glassy eyed rant, can't connect dots? Funny.

Congress' (both parties) action 10 years ago requiring lenders to accept riskier applicants help start this fiasco. Bankers, in part, reacted with riskier investments and rate structure schemes to cover defaults - pushing those ARM's, creating interest only loans. All is good when prices rise.

Whenever people talk about a new paradigm in mortgages, or the end of the business cycle as we know it, or that today isn't your Dad's/Granddad's economy, don't believe them.

My Granddad's generation would have laughed at financial advisor's who propose gimmicky loans. Today we act all confused and believe the person with the "credentials". Are we a dumber generation, more gullible or ????

The political class (R's and D's) have that "fatal economic conceit" that they can change the basic laws of economics. Create the problem and be the first to say that they are the only ones who can "fix it".

If private businesses run by the Federal Government (Freddie/Sallie) isn't socialism then what is it? Reminds me of that saying that true socialism really hasn't been tried yet.

The more things Change the more they stay the same...

I'm from Chicago and stumbled across your blog earlier today; there seem to be a number of well-writen articles here. That said, I do have two complaints this particular article.

Kari, I have a problem with your conclusion that the idea of intervening in the housing crisis ("I will work with financial services companies, not-for-profit organizations, and state agencies to promote the rights of homeowners and the tools available to them if they struggle to make home payments.") is lassez-faire because it doesn't involve more regulation of the mortgage industry.

Lassez-faire means hands off by the government in general. Working with state agencies to promote the rights of homeowners - rights first mentioned in FDR's New Deal, I might add - are distinctly socialist in nature, if weakly so by current standards.

The other nitpick I have is that you seem to be willing to gloss over some of the more socialist specifics Alley suggests: "I will also work with the Legislature to increase our financial reserves so that we can avoid financial crises that lead to the slashing of programs and services. These situations can be avoided with adequate reserves" mentioned here and denouncing this as the mark of a right-wing politician while ignoring similar tactics from the Democratic Nominee, Ben Westlund.

Westlund's site claims that he will "create a favorable economic climate for business by continuing to position Oregon to improve our bond rating", "Maintain Oregon’s strong tradition of fiscally responsible investments to earn the highest possible returns and save taxpayer dollars", and "Support school funding through the careful management of resources that benefit the Common School Fund". No strategy of how the CSF will be managed, no mention of how he will go about creating a favorable economic climate, no mention of how he'll ensure that the investments made are fiscally responsible.

One of his housing crisis policies, too, sound suspiciously like Alley's: "Teach financial literacy to protect consumers and help Oregonians make sound decisions and invest in themselves. Expand educational programs offered by the State Treasurer by partnering with non-profit organizations and businesses including information on home buying, credit reports, credit cards, payday loans and sub-prime loans." Sounds to me like the Democrat, too, is 'blaming the victim', as you put it.

You're hurting your own case by continuing to allow your vague uneasy feeling(s) to control your conclusions, and as a result you've made unsupportable points and have only reached pre-confirmed conclusions that - based on the apparent similarity of the candidates that I hope I've demonstrated - may cause you to vote for a candidate who is actually less close to your interests than you might believe from their party allegiances.

Hey Chicagoer...

You may not know that Westlund is a sitting Senator who has an extensive history of already working on most of these issues... so for him, the proof is in the pudding.

Alley hasn't ever been in front of the public before this race, so his website is really all there is in terms of his stances on these issues.

So what's your connection to Alley?

Stephanie,

Ok the start was more than 10 years ago:

The Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) and the Alternative Mortgage Transactions Parity Act of 1982 (AMTPA).

And The Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) and the Alternative Mortgage Transactions Parity Act of 1982 (AMTPA).

http://money.cnn.com/2008/01/30/real_estate/congress_subprime.fortune/index.htm

Politicians of any stripe won't (can't) fix the mess. Nor will government run private businesses.

Only "the people" can fix the mess if they can by re-learning what our grandparents knew - Buy only what you can afford and save your money and 'buyer beware'. Basic high school personal finance.

Imagine if people bought, borrowed in a prudent manner? We wouldn't need to increase taxes to bail out companies due to greedy CEO's (Jim Johnson) bad choices.

Walpurgis, you're right: I didn't know that Westlund has experience and that Alley does not. I missed that.

But my argument was that the arguments posited in the article are just as easily made against one candidate as they are made against the other; how can you confirm that uneasy feelings for a particular candidate are deserved if his opponent looks the same on the topics you choose to feel uneasy about?

The argument you make is significantly more logical: Westlund has experience, Alley does not. There is a difference between the two; one has a record, the other does not. Alley has not paid his dues. This is a very good reason to trust Westlund over Alley.

As for your accusation of a connection to Alley, I found your website following some links from here. No connections to Alley.

Chris Lowe, I apologize - you are correct in that government intervention is not always socialist.

Perhaps a better characterization of socialism would be government intervention that acts as a buffer between private interactions (be it between corporations, individuals, or an individual and a corporation) with the result that opportunities available to the populace as a whole are equalized.

If you agree this is a fair definition, then I'd like to make my case that the policy of promoting tools is weakly socialist: 1. The way things currently stand, many people would be homeless and unable to get a home. 2. The stated policy would increase the opportunities of these people to own homes. 3. The corporations' opportunity to foreclose on these homes (and thus own them totally) would be decreased by an equivalent amount. 4. This policy then equalizes the opportunities between the two groups, which, by the above definition, is a form of socialism.

This policy acts in the area between the corporation and the individual; the policy of educating consumers encourages effort on the consumer side and is slightly weaker than the promotion of these tools. The policies being suggested - regulation - are by far the most strongly socialist of the three concepts, as it puts the whole burden of opportunity equalization on the corporate side of the interaction.

Chris -

"One of the roles of government is to protect people from criminals. That includes from financial criminals. The way that's done is through regulation. Regulation is a good thing."

Absolutely and Agree 100%. I'd add all criminals including one in left leaning political parties. Here's a link showing investigations into Fannie were quelled by hmm, politicians? What now, further investigations? Were the regulators alseep at the switch? No - their pockets were being lined with taxpayer money through F/F.

http://www.ofheo.gov/media/pdf/FNMSPECIALEXAM.PDF

My beef isn't about regulations it's with government run private companies or Government sposored enterprises (GSE's) not regulation.

GSE and Regulations are two very different things.

RE: F/F, since they GSE's they access to cheaper money than competitors, used it to make large portfolio bets, and donate heavily to politicians who can shield them from regualation! They have given more than $800k to congressman and senators who oversee their legislation.

In 2002 Fannie/Freddie failed to produce accurate accounting statements. Sound familiar? Warning signs were there all along. All it needed was a housing downturn before these "big hedge funds" with taxpayer money came crashing down.

Players in F/F are Jim Johnson, Franklin Raines. They are not only in policial campaigns but out there saying nothing is wrong with F/F. One note: How can Jim Johnson make $21M in one year as a CEO of a taxpayer subsidized entity (GSE)? Sick. Talk about the Ultra-Rich!

same link: http://www.ofheo.gov/media/pdf/FNMSPECIALEXAM.PDF

I'd like to know how many Senators got sweet mortagage deals from these GSE's. It took some investigation to expose the Friends of Angelo club with Contrywide (Coburn/Dodd). Who got sweet dealing with F/F? We already know that Obama got a sweet deals from his real estate friend Rezko.

I am actually disillusioned. I thought things were going to be different in 2006 with the Dems. More of the same corrupt politicians getting thier goodies at taxpayer expense.

<h2>That's why I said the more things Change the more they stay the Same. It doesn't matter who you vote into office. Rezko proved that for me with Obama. Do people think it's a coincidence that Michelle Obama's hospital salary exploded after Obama was elected into the US Senate? Color me skeptical.</h2>