Saturday, June 23, 2012

Where Krugman Went Right: On Housing Policy


Since 1999, when economist Paul Krugman started writing for The New York Times, he has been drawing the criticism of free market-oriented economists (and recently the president of Estonia) for glaring deficiencies in economic analysis and for writing what amounts to “fiction” (economist and Estonian expert Steve Hanke’s word to describe Krugman’s trashing of Estonia’s recent robust economic growth and counter Keynesian fiscal reforms). 

The Krugman-Estonia kerfuffle raises an interesting question: Has Krugman ever sided with free market economists against government activism in his Times forum?

In Back from Serfdom, my Atlanta colleague Robert Dell quotes a Krugman column from June 2008 to support the case for termination of government affordable housing policies.  The normally predictably partisan pundit Krugman appears here to be channeling AEI's Peter Wallison: 

“Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?

Listening to politicians, you’d think that every family should own its home—in fact, that you’re not a real American unless you’re a homeowner. . . . and that is reflected in U.S. policy (MP: Which drove homeownership to unsustainable levels and created the housing bubble, see chart above). Because the I.R.S. lets you deduct mortgage interest from your taxable income but doesn’t let you deduct rent, the federal tax system provides an enormous subsidy to owner-occupied housing. On top of that, government-sponsored enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — provide cheap financing for home buyers; investors who want to provide rental housing are on their own. In effect, U.S. policy is based on the premise that everyone should be a homeowner.

But homeownership isn’t for everyone. In fact, given the way U.S. policy favors owning over renting, you can make a good case that America already has too many homeowners.” 

We can only hope Krugman will direct a future critical blast toward the Government National Mortgage Association (Ginnie Mae) for continuing to promote home ownership on its web site

54 Comments:

At 6/23/2012 2:30 PM, Blogger Steve said...

Krugman economic theories are more complex than some give him credit.

 
At 6/23/2012 4:15 PM, Blogger W.E. Heasley said...

“Why should ever-increasing homeownership be a policy goal? How many people should own homes, anyway?

But homeownership isn’t for everyone. In fact, given the way U.S. policy favors owning over renting, you can make a good case that America already has too many homeowners.” - Paul Krugman


Why a homeownership policy goal and why so many should own a home? Because the same Krugman-advocated government policy became the central planning mechanism of the goal/number. The same Krugman-advocated few made the goal for the many through the mechanism of government.


“Because the I.R.S. lets you deduct mortgage interest from your taxable income but doesn’t let you deduct rent, the federal tax system provides an enormous subsidy to owner-occupied housing. On top of that, government-sponsored enterprises — Fannie Mae, Freddie Mac and the Federal Home Loan Banks — provide cheap financing for home buyers; investors who want to provide rental housing are on their own. In effect, U.S. policy is based on the premise that everyone should be a homeowner.” - Krugman


Sorry but government [I.R.S., Fannie Mae, Freddie Mac and the Federal Home Loan Banks] does not think and make decisions. Only people think and make decisions. Hence politicos through the mechanism of government allow deductions and cheap financing, not “government”. The deductions and cheap financing being the same few making plans for the many. The Krugman-advocated plans of the few superseding the plans of the many.

 
At 6/23/2012 4:56 PM, Blogger PeakTrader said...

The U.S. has the capacity to build hundreds of thousands of more houses each year. Instead, we have massive idle resources (including labor and capital). It's a huge waste.

 
At 6/23/2012 5:19 PM, Blogger PeakTrader said...

Krugman was correct that homebuilding would lift the country out of the 2001 recession and Bush was correct to begin a slowing of homebuilding in 2004.

 
At 6/23/2012 5:22 PM, Blogger Krishnan said...

A stopped clock tells us the correct time, twice a day.

If you create a computer program to create words, sentences, paragraphs, pages at random - there is a finite probability that some of it will make sense.

(So, he said something approaching sensible at some time - perhaps he was temporarily insane at the time - Remember that at one time Donald Trump also spoke about the wonders of globalization)

 
At 6/23/2012 5:28 PM, Blogger PeakTrader said...

What Caused the Financial Crisis
November 16, 2010

"Starting in the late 1990s, the government, as a social policy to boost homeownership, required Fannie Mae and Freddie Mac to acquire increasing numbers of "affordable" housing loans. (An "affordable loan" is made to people who normally would not qualify.)

By 2007, 55 percent of all loans made by Fannie and Freddie had to be "affordable." By June 2008, there were 27 million subprime housing loans outstanding (19.2 million of them directly owed by government or government-sponsored agencies), with an unpaid principal amount of $4.6 trillion."

"What we know is that almost 50 percent of all mortgages outstanding in the United States in 2008 were subprime or otherwise deficient and high-risk loans.

The fact that two-thirds of these mortgages were on the balance sheets of government agencies, or firms required to buy them by government regulations, is irrefutable evidence that the government's housing policies were responsible for most of the weak mortgages that became delinquent and defaulted in unprecedented numbers when the housing bubble collapsed.

The tragedy is that the financial crisis continues because Congress misdiagnosed the problem and came up with a 2,000-page "solution" that will only make matters worse."

******

Bush Administration Tried to Reform Freddie and Fannie Five Years Ago
CBS News
February 19, 2009

"Karl Rove, “We were briefed as far back as 2001 about the problems with Fannie and Freddie; in fact, we moved aggressively in 2004 to regulate Fannie and Freddie, actually got a bill through the Senate Banking and Finance Committee only to have it filibustered by [Sen.] Chris Dodd.”

Rove said Fannie Mae and Freddie Mac “accelerated their imprudent behavior after we attempted to regulate them. They bought almost as much mortgage debt from 2005 through 2008” as they bought in their first 30 years of their existence.

“In fact, in 2003, when we sent our first members of the Cabinet up to talk about this on Capitol Hill, Barney Frank had a hearing in which they basically beat up everybody we sent up there in pretty vociferous language."

 
At 6/23/2012 6:47 PM, Blogger Ron H. said...

This comment has been removed by the author.

 
At 6/23/2012 7:15 PM, Blogger Ron H. said...

Krishnan: "A stopped clock tells us the correct time, twice a day."

You beat me to it. I suppose it's nearly impossible for even Krugman to be wrong EVERY time, as hard as he tries.

6/23/2012 6:47 PM
Delete

 
At 6/23/2012 9:00 PM, Blogger VangelV said...

Krugman economic theories are more complex than some give him credit.

He is a fool who has become an activist. He ignores the economic area that he was good at and is spreading the usual Keynesian drivel as gospel even though it was discredited a long time ago.

 
At 6/23/2012 9:41 PM, Blogger L.A. said...

What's funny about all of this is Krugman's call for Greenspan to "create a housing bubble to replace the Nasdaq bubble" back in 2002 following the tech stock crash when the last double dip was all the rage. He doesn't know which way to go. Typically his stance is purely political, namely everything anti-republican.

http://www.nytimes.com/2002/08/02/opinion/dubya-s-double-dip.html

 
At 6/24/2012 9:20 AM, Blogger PeakTrader said...

A Gary Shilling (who has one of the best track records) predicts home prices will fall another 20% within a few years and the S&P 500 will fall to 800 later this year.

A. Gary Shilling received his bachelor’s degree in physics, magna cum laude, from Amherst College; earned his Master’s degree and Doctorate in Economics at Stanford University.

My comment: More wealth will disappear, and be destroyed, by falling housing and stock prices, along with below trend economic growth.

 
At 6/24/2012 9:28 AM, Blogger Seth said...

I'm so tired of the 'what Krugman said when' and 'what he really meant' games. Anyone who needs that much effort to understand and reconcile what he said at different times, just isn't worth it.

 
At 6/24/2012 9:31 AM, Blogger Zachriel said...

PeakTrader: The fact that two-thirds of these mortgages were on the balance sheets of government agencies, or firms required to buy them by government regulations, is irrefutable evidence that the government's housing policies were responsible for most of the weak mortgages that became delinquent and defaulted in unprecedented numbers when the housing bubble collapsed.


Quoting a blog that quotes an article that cites Peter J. Wallison doesn't constitute "irrefutable evidence." The article itself points out there are other proposed explanations.

The toxic securities were designed and marketed by Wall Street. Freddie and Fannie were late players to the game. They were the "greater fools." Just because you got holding the bag doesn't mean you engineered the scam (though it doesn't mean you're innocent either).

The majority of subprime loans were made by private lenders, and the vast majority of firms making subprime loans were not covered by CRA. The problem was a weakening in underwriting standards, in response to the huge demand for PMBS. The runup was a classic bubble, with people buying only in order to sell to the next sucker in line, with the public left holding the bag.

PeakTrader: What we know is that almost 50 percent of all mortgages outstanding in the United States in 2008 were subprime or otherwise deficient and high-risk loans.

That is simply incorrect, and uses a faulty definition of "subprime or otherwise deficient and high-risk loans".

 
At 6/24/2012 9:42 AM, Blogger VangelV said...

A Gary Shilling (who has one of the best track records) predicts home prices will fall another 20% within a few years and the S&P 500 will fall to 800 later this year.

Gary has been predicting a deflationary environment for more than three decades. I would say that he has mostly been wrong about that call. While I can see his call for a further price decline in housing being right I would use logic rather than appeal to his authority as support.

 
At 6/24/2012 9:43 AM, Blogger PeakTrader said...

Zachriel, Congress "engineered the scam," because it created a massive social program that it believed others would pay for.

Wall Street "recycled" dollars (at a time of contractionary fiscal policy and restrictive monetary policy) and diversified the risk globally.

 
At 6/24/2012 9:46 AM, Blogger PeakTrader said...

VangelV, I suggest you use scientific evidence before making your comments.

 
At 6/24/2012 10:08 AM, Blogger VangelV said...

Quoting a blog that quotes an article that cites Peter J. Wallison doesn't constitute "irrefutable evidence." The article itself points out there are other proposed explanations.

But the facts seem to be correct. Thanks to huge pressures by Congress and as outlet provided by foreign banks and the GSEs Wall Street companies were able to write a lot of bad paper that was purchased by banks who were advised by the Basel Accord rules to hold as 'reserves'.

The toxic securities were designed and marketed by Wall Street.

Yes they were. But there had to be a market for these securities. I recall that when the Basel rules were being created the banks' assets and off-balance sheet exposures were weighted according to risk. This was used to determine the capital adequacy ratio. The banks were encouraged to buy mortgage paper because it fell in the 50% category. (Note that they were allowed to hold Greek, Italian, Irish, or Spanish government bonds without setting aside any capital because sovereign bonds were supposedly safe. This explains why many of the large 'good' banks are insolvent at this time and need a bailout.)

Freddie and Fannie were late players to the game. They were the "greater fools." Just because you got holding the bag doesn't mean you engineered the scam (though it doesn't mean you're innocent either).

The people running Fannie and Freddie were not fools at all. They got huge bonuses by taking huge risks and booking fake gains. Since the government backed the GSEs there was no doubt that they would be bailed out by the taxpayer. Fannie and Freddie management do not really care about the taxpayer so they did what they should have done given the incentives and the financial rules.

The majority of subprime loans were made by private lenders, and the vast majority of firms making subprime loans were not covered by CRA. The problem was a weakening in underwriting standards, in response to the huge demand for PMBS. The runup was a classic bubble, with people buying only in order to sell to the next sucker in line, with the public left holding the bag.

You are missing the point. In a fiat world where CBs are flooding the system with liquidity supply is created to meet the demand created by the rules. If I loan $50 million to Coca Cola to build a new bottling plant I have to count the full $50 million loan when determining my CAR. If I buy $50 million in mortgage backed securities I only have to count $25 million when determining my CAR. Since leverage allows me to make more money I look more favourably on the mortgage paper than the safe loans to Coke. And if I really want to leverage up my balance sheet all I do is buy government paper and I don't have to worry about setting any of my capital aside in reserves.

The world responds to incentives. Clearly it was these incentives that created the whole housing mess. You can choose to ignore the evidence because it does not fit your narrative or see the truth as it is.

 
At 6/24/2012 11:08 AM, Blogger PeakTrader said...

I recall seeing Bush at the White House giving a speech to reporters about the housing crisis, while Obama and Biden were off to the side.

Both were watching Bush with the same disgusting and angry looks on their faces, like this guy created enormous damage and we'll have to clean up his huge mess.

Yet, Obama and Biden, unlike Bush, supported the programs in Congress that created the huge mess.

 
At 6/24/2012 11:50 AM, Blogger VangelV said...

VangelV, I suggest you use scientific evidence before making your comments.

I have. Look at the Basel rules and see how they encouraged banks to buy mortgage backed securities and sovereign debt. If I am allowed to set aside half the capital when buying a MBS than I am when making a loan to Coca Cola I will be much more likely to buy the MBS paper. And when the Basel rules are telling banks that they do not need to set aside any capital when I buy Greek, French, or Spanish debt is it a surprise that they load up on the stuff as they try to rebuild their balance sheets?

 
At 6/24/2012 11:52 AM, Blogger VangelV said...

I recall seeing Bush at the White House giving a speech to reporters about the housing crisis, while Obama and Biden were off to the side.

Both were watching Bush with the same disgusting and angry looks on their faces, like this guy created enormous damage and we'll have to clean up his huge mess.

Yet, Obama and Biden, unlike Bush, supported the programs in Congress that created the huge mess


Bush was a coward. He could have supported and passed legislation that took away the implicit guarantee from the GSEs but backed away when the Democrats used the housing loans as political capital. It was not just Obama who decided to bail out the GSEs. That began under Bush.

 
At 6/24/2012 1:46 PM, Blogger PeakTrader said...

VangelV says: "Bush was a coward. He could have supported and passed legislation that took away the implicit guarantee from the GSEs."

That's a ridiculous statement. Also, I don't recall the GOP had the House with 60 Senate votes. Moreover, Bush wanted to win reelection. Anyway, Bush wasn't a tyrant.

10 reasons why George W. Bush was a smarter world leader than Barack Obama

1. Bush never apologised for his country.
2. Bush identified and confronted evil.
3. Bush made the advance of freedom a key component of his agenda.
4. Bush defended national sovereignty.
5. Bush believed in the Special Relationship.
6. Bush cultivated key allies.
7. Bush understood the importance of missile defence.
8. Bush believed in fighting a global war.
9. Bush did not compromise US security.
10. Bush did not send mixed messages in the face of the enemy.

Nonetheless, I'm sure, you still want to throw shoes at Bush.

 
At 6/24/2012 2:13 PM, Blogger Bruce Oksol - oksol@yahoo.com said...

Peak Trader: great comment. Thank you. I agree 100%.

 
At 6/24/2012 3:07 PM, Blogger SteveH said...

Shilling predicted a significant selloff of stocks in November 2010 within the following 12 months. The market went on to rally another 200 points on S&P 500. And weak economic numbers mid 2011 sent the market down but from there the market rallied another 300 points and we are back down to the 2011 peak or 200 points above Shilling's 2010 prediction of a sell off. I wouldn't put too much money on his predictions. Shilling is predicting house prices to fall below their replacement cost and he is predicting equity values to be over 50% below corporate net worth which doesn't include patents and other knowledge.

 
At 6/24/2012 5:09 PM, Blogger Ron H. said...

Peak

"10 reasons why George W. Bush was a smarter world leader than Barack Obama"

Maybe I've missed something, but why has the discussion suddenly shifted from domestic economic policy to foreign policy? Was there a transition?

In any case, here we are with a new topic.

Could you please point out which of the 10 things on your list are supposed to be good things?

The reason I ask, is that #8, fighting a global war, seems like a bad thing, and it's really hard to believe #3 can be true, considering Bush's support of the draconian Patriot Act, which has the effect of reducing freedom, not advancing it.

 
At 6/24/2012 5:31 PM, Blogger PeakTrader said...

Bruce, thanks. I also wrote the following on the Bush economic record:

The "Misunderestimated" President:

Bush inherited the worst stock market crash since the Great Depression and a recession. However, the Bush Administration turned the recession into one of the mildest in U.S. history (which wasn't a recession based on annual per capita real GDP growth), after the record economic expansion and structural bull market from 1982-00.

Over a five-year period in the mid-2000s, U.S. corporations had a record 20 consecutive quarters of double-digit earnings growth, two million houses a year were built, 16 million autos per year were sold, U.S. real GDP expanded 3% annually, in spite of 6% annual current account deficits (which subtract from GDP).

The U.S. economy was most efficient, while Americans stocked-up on real assets and goods, and capital was built-up. It was one of the greatest periods of U.S. prosperity, the fourth longest economic expansion in U.S. history, and in a structural bear market that began in 2000.

The Bush Administration was adept at minimizing the recession in 2008, including providing a tax cut in early '08 for the Fed to catch-up easing the money supply, until Lehman failed in Sep '08, which caused the economy to fall off a cliff. However, appropriate policy adjustments were implemented quickly.

And if Bush could be reelected and had his way, the U.S. would've completed a V-shaped recovery in 2010, and we'd be in a strong disinflationary expansion instead of this on-going depression and "train wreck."

 
At 6/24/2012 5:39 PM, Blogger PeakTrader said...

Steve, Shilling's stock market prediction of the sell-off was when the S&P 500 was above 1,200 and within a year was below 1,100. He was also correct the economy would slow in 2011. Moreover, he predicted the 10-year bond yield would fall to 2%, which almost no one believed (including Bill Gross of Pimco) and further predicted it would fall to 1.5%.

 
At 6/24/2012 5:42 PM, Blogger PeakTrader said...

Ron, I guess, you missed the part where VangelV said: "Bush was a coward."

 
At 6/24/2012 6:05 PM, Blogger PeakTrader said...

Also Ron, here's what #3 says in the article:

"The spread of freedom and liberty was always a centerpiece of the Bush agenda. His critics derided this approach as unrealistic, or as a grandiose dream. But few would argue today that the people of Iraq were better off living under a monstrous tyrant like Saddam Hussein. In marked contrast, Barack Obama rarely mentions the word freedom, and the issue of human rights is far down his list of priorities. He has remained largely silent in the face of extreme brutality by the Iranian regime, has extended the hand of friendship to genocidal killers in Sudan and has turned a blind eye to repression in places like Burma. There is a name for this kind of strategy – appeasement – and it only serves to weaken America’s standing in the world and strengthen the brutal fist of its enemies."

And #8:

"One of the gravest mistakes of Obama’s first year in office has been his reluctance to describe the conflict against al-Qaeda and its backers as a global war. He dropped the idea of a War on Terror within days of entering office, which was subsequently renamed as an “Overseas Contingency Operation”. President Bush was right to rally his country behind a large-scale long war, one which may last for several decades, against an enemy that seeks the destruction of the West."

 
At 6/24/2012 6:08 PM, Blogger VangelV said...

That's a ridiculous statement. Also, I don't recall the GOP had the House with 60 Senate votes. Moreover, Bush wanted to win reelection. Anyway, Bush wasn't a tyrant.

He didn't need 60 votes. He needed the courage to support the bill that would have removed the implicit guarantees. He also could have had the regulators, which he appointed, to ensure that sound business practices were followed. But Bush was a coward who cared more about power than principle. As such he will be remembered as one of the worst presidents in American history.

1. Bush never apologised for his country.

I think that he should have apologized for lying about the WMDs and lying about the costs of the unnecessary conflicts that he supported. He should have apologized for being an unprincipled coward and for some of the things he did in the name of your great country.

2. Bush identified and confronted evil.

He did the bidding of his evil supporters.

3. Bush made the advance of freedom a key component of his agenda.

Is that what the TSA and DHS are advancing. Orwell would have been proud.

Nonetheless, I'm sure, you still want to throw shoes at Bush.

Not at all. Imbeciles are best left alone. He did his harm. It is now Obama's turn.

 
At 6/24/2012 6:17 PM, Blogger VangelV said...

Ron, I guess, you missed the part where VangelV said: "Bush was a coward."

I don't think that he did. And his questions are quite valid. Why are useless but expensive wars a good thing? And how does the growth of domestic surveillance, indefinite detention, Star Chamber execution orders, the DHS, TSA, etc., increase liberty when the evidence shows that they do the opposite? If the police can enter your home without a warrant from an independent judge, read all your e-mails, and listen to all your phone calls, how can you ever claim that you are freer than before?

Bush was a coward because all it took was a few idiots in a cave in Afghanistan to get him to give up on the liberty that so many brave Americans fought and died for.

 
At 6/24/2012 6:25 PM, Blogger PeakTrader said...

VangelV, you understand an activist Congress pushing for more subprime loans as much as you understand wartime presidents winning wars and keeping the country safe, i.e. zero.

 
At 6/24/2012 6:47 PM, Blogger VangelV said...

"The spread of freedom and liberty was always a centerpiece of the Bush agenda.

But that is not what he was doing. He actually campaigned on the idea of a modest foreign policy and campaigned against the Clinton idea of nation building. It was only after the WMD lie was exposed that he switched horses and got the neocons to spread a new message.

His critics derided this approach as unrealistic, or as a grandiose dream. But few would argue today that the people of Iraq were better off living under a monstrous tyrant like Saddam Hussein.

First, Saddam was your man and a buddy of the Reagan/Bush administration. Second, by defeating the Sunnis all Bush did was give the Iranians much more influence inside Iraq. And while there was no al Qadea presence inside Iraq before there certainly is now.

In marked contrast, Barack Obama rarely mentions the word freedom, and the issue of human rights is far down his list of priorities. He has remained largely silent in the face of extreme brutality by the Iranian regime, has extended the hand of friendship to genocidal killers in Sudan and has turned a blind eye to repression in places like Burma. There is a name for this kind of strategy – appeasement – and it only serves to weaken America’s standing in the world and strengthen the brutal fist of its enemies."

What kind of BS is this? Obama is serving out the third Bush term and doing pretty much that Bush did. In fact, the has gone off the deep end since he is now assassinating American citizens who have never been charged, all in the name of liberty.

"One of the gravest mistakes of Obama’s first year in office has been his reluctance to describe the conflict against al-Qaeda and its backers as a global war. He dropped the idea of a War on Terror within days of entering office, which was subsequently renamed as an “Overseas Contingency Operation”. President Bush was right to rally his country behind a large-scale long war, one which may last for several decades, against an enemy that seeks the destruction of the West."

I think that you are all confused. The US is backing al Qaeda in Syria and Libya in a very bipartisan fashion. Obama is being attacked by the GOP for not giving even more aid to al-Qaeda in Syria. there is no difference between the two parties. Both would drive the military spending higher and would support global conflicts. Obama has gone into Mali, the Suda, Somalia, and Yemen. That is even more than the cowardly Bush who talked a big game but was more cautious.

 
At 6/24/2012 6:53 PM, Blogger VangelV said...

VangelV, you understand an activist Congress pushing for more subprime loans as much as you understand wartime presidents winning wars and keeping the country safe, i.e. zero.

I understand that if Bush had done what I said there would be no way for the Democrats to avoid being damaged by their support of the GSE bubble blowing. The voters would certainly have a clearer choice.

Bush and Obama have not kept the country safe. By meddling across the world they have made a lot of people who would have ignored the US very angry and more likely to do damage to your interests. Imagine some Islamic extremist from the Philippines or Malaysia setting off a bomb in a Vegas casino or inside your friendly Wall-Mart. Think of the damage to the economy and to your general liberty even if very few lives are lost.

 
At 6/24/2012 7:33 PM, Blogger Ron H. said...

"Ron, I guess, you missed the part where VangelV said: "Bush was a coward."

In reference to his domestic economic policies. I didn't see an opening to introduce Bush's foreign policy to the discussion.

What about the list? Which ones are good?

 
At 6/24/2012 9:07 PM, Blogger Ron H. said...

#3 "The spread of freedom and liberty was always a centerpiece of the Bush agenda."

What nonsense. First of all, I'm unable to find anywhere in the Constitution, any authority given the US President to invade foreign countries without a Congressional declaration of war. Maybe you can point it out to me. A resolution saying "do whatever you think is necessary" just isn't good enough.

If upholding the Constitution - something every federal employee including the President swears to do - isn't enough of a barrier for some unknowable reason, then you will have to explain what legitimate purpose was served invading a sovereign state that was not attacking or even threatening the US.

Then, if you think making Iraqis better off based on your judgement, not theirs, is enough reason to overthrow an existing government, then you must explain why you aren't calling for the invasion of Cuba, Venezuela, North Korea, and half the countries in Africa.

And for #3 to be true, you must believe that the cause of freedom and liberty abroad can only be advanced by reducing freedom and liberty at home, as that's what has happened.

"His critics derided this approach as unrealistic, or as a grandiose dream."

His critics oppose this approach as unlawful nation building and expansion of empire unrelated to any direct or immediate threat to the US, and requires an extreme torturing of the concept of national defense. No matter how noble the goal, the actions were and are unlawful.

"But few would argue today that the people of Iraq were better off living under a monstrous tyrant like Saddam Hussein

That's not the point, and you would have to ask some Iraqis about that in any case.

#8. "President Bush was right to rally his country behind a large-scale long war, one which may last for several decades, against an enemy that seeks the destruction of the West."

Where do you get this nonsense? That's pure political doublespeak.

If you would cite the article you mention we could read it all at once for ourselves, instead of getting it in dribs and drabs spread over a series of comments.

 
At 6/25/2012 12:45 AM, Blogger PeakTrader said...

Fortunately, Presidents, with the exception of Obama, aren't as cynical as VangelV and Ron.

 
At 6/25/2012 12:52 AM, Blogger OBloodyHell said...

Even a broken analog clock is right twice a day... For one of those rare times, the universe aligned with Krugman... he didn't get it right, he just got lucky as a Texas Sharpshooter.

 
At 6/25/2012 1:17 AM, Blogger OBloodyHell said...

>>> What nonsense. First of all, I'm unable to find anywhere in the Constitution, any authority given the US President to invade foreign countries without a Congressional declaration of war.

Strange, Jefferson seemed to find reason to do exactly that.

You recall him, one of the Big Boys of the Founding Fathers?

=============================
On Jefferson's inauguration as president in 1801, Yusuf Karamanli, the Pasha (or Bashaw) of Tripoli, demanded $225,000 from the new administration. (In 1800, Federal revenues totaled a little over $10 million.) Putting his long-held beliefs into practice, Jefferson refused the demand. Consequently, on May 10, 1801, the Pasha declared war on the U.S., not through any formal written documents but in the customary Barbary manner of cutting down the flagstaff in front of the U.S. Consulate.[22] Algiers and Tunis did not follow their ally in Tripoli.

In response, "Jefferson sent a small force to the area to protect American ships and citizens against potential aggression, but insisted that he was 'unauthorized by the Constitution, without the sanction of Congress, to go beyond the line of defense.'" He told Congress: "I communicate [to you] all material information on this subject, that in the exercise of this important function confided by the Constitution to the Legislature exclusively their judgment may form itself on a knowledge and consideration of every circumstance of weight."[21] Although Congress never voted on a formal declaration of war, they did authorize the President to instruct the commanders of armed American vessels to seize all vessels and goods of the Pasha of Tripoli "and also to cause to be done all such other acts of precaution or hostility as the state of war will justify."


=========================

In short, Ron, you're a freaking ignorant, partisan moron.

Bush acted in a way that both Congress and the UN gave him permission to do, regardless of their after-the-fact "What, yu t'ought we wuz seryus 'bout dat?" responses.

There was nothing either illegal or immoral about what he did -- in fact, it was so blatantly NOT the "War for Oil" which it has been painted as. If it were just that, then clearly, the cheap thing to do -- in money, lives, and political ease -- would have been to go in, kick Saddam out, and then replace him with an America-friendly thug as had been in power in the ME countries for a century and more.


No, we went in and did the HARD THING -- we attempted to establish a proper government that gave power to the people who lived there.

Are/were they ready for that? Not sure -- the jury is still out on it -- but you can bet one thing... fail or not, there is now an entire GENERATION of Iraqis who have tasted freedom, and who will fan the desire for it in their children, come what may.

May it's hopeless, they aren't ready for it... but I'd rather TRY and give them freedom than to presume, arrogantly as you and people like you do, that they just aren't ready.

"Those poor ragheads just can't handle modern civilization. We shouldn't even try, we should just impose our will on them, and be done with it." -- nice attitude you have there.

Now sit down or I shall taunt you a second time.

 
At 6/25/2012 1:27 AM, Blogger OBloodyHell said...

>>>> then you will have to explain what legitimate purpose was served invading a sovereign state that was not attacking or even threatening the US.

Ron, I for one, am really really sick and tired of explaining this crap to imbeciles like you over and over and over again. Go read earlier comments -- now as much as EIGHT YEARS OLD -- on the topic.

Simply put: Saddam funded terrorists. Saddam operated THREE of the SIX known terrorist training camps in the world. Saddam fired at US planes in the No-Fly Zone, imposed to protect the KURDS from his blatantly-counter-to-international-law attacks using poison gas weapons.

The thumbed his nose at the US over and over again, flouting the very specific principles under which the UN and the allies in the Gulf War ALLOWED him to remain in power.

He violated those rules over and over again, and removed all legitimate claim to power he had.


Saddam rattled his sabers constantly, threatening us.

I have news for you -- you walk around threatening violence to your neighbors. You shout epithets and threats of violence at the police when they get called in. You then act like you're going to reach for a gun, so the police shoot your DUMBF*** ass off.

That's on YOU, not the COPS.

So trying to shift blame onto the USA -- the equivalent of the cops in this case -- and off the one shot by cops after hours (YEARS) of efforts to get sensible behavior from him (Saddam) -- is just flat out moronic on YOUR part.

Shut up and go to hell, you're nothing but a timewasting moron and troll with nothing to add but an endless rehash of old lefty talking points that have already been dealt with and debunked in a vast array of commentary here and elsewhere.

 
At 6/25/2012 1:32 AM, Blogger OBloodyHell said...

>>> Where do you get this nonsense? That's pure political doublespeak.

Read the above. You're a lackwit ass of a troll who has somehow missed an entire DECADE of dialogue over this point.

Not wasting any time on explaining something to someone who can't understand the explanation after the forty-fifth freaking TIME asking the same imbecilic questions.

Not because the answers aren't clear, or the explanations as simple and well-laid out as any rational individual would be capable of understanding.

Just because you're a congenital idiot does not obligate us to explain things to you over and over again until you, or we, DIE trying to help you comprehend the most basic aspects of geopolitics.

 
At 6/25/2012 1:37 AM, Blogger Ron H. said...

This comment has been removed by the author.

 
At 6/25/2012 1:50 AM, Blogger OBloodyHell said...

>>>> By meddling across the world they have made a lot of people who would have ignored the US very angry and more likely to do damage to your interests.

Vangel, by now, you, too, should know better than to try and pull out this BULLSHIT hoary lie of a meme and dress the turd up in gold leaf like it had any merit.

It's shit, you know it's shit, and the gold paint doesn't make it stink any less.

The USA does not have to do JACK SHIT to get enmity from others.

a) We are nominally about freedom and liberty and self-responsibility. There are ideologies which are diametrically opposed to those notions -- we could be Elwood P. Freaking DOWD and they'd STILL be out to create issues.

b) We are the top dog. There are ALWAYS those out there who would attack us solely for the purpose of "Counting Coup". DUH.

c) We are rich. If OWS crowd should serve to demonstrate anything, it's that there are ALWAYS those who would address their own failed circumstances by attempting to blame others for their failures, and resent and envy what they have. These people will use whatever force they have to STEAL or extort a piece of what the "rich" have. We can either buy them off (which invites further threats) or we can make it clear that anyone who EPHS with us will pay a much greater price than we will.

-- For most people recognize power only as the kind of blows you can give. Few recognize that there are two kinds of power -- the blows you can give, and the blows you can take. You can punch like Tyson in his prime, but have a glass jaw, and hence lack power. While if you can take Tyson's longest, hardest flurry of blows, over and over, and slowly beat him to the ground with a lot of small, weak, and individually ineffectual blows, you are the one with power.

The fact is, the USA has both kinds of power -- few have considered that the nastiest blow that our enemies could direct against us occurred on 911. 3000 deaths and roughly 10 BILLION in property and economic damage.

Within a single DAY, we had replaced those lost lives. Within a single DAY, our economy had shrugged off a blow that would destroy most economies, and recreated 10 billion in NEW WEALTH to replace the lost value.

The surprise of it, and our over-reaction to it -- actually produced more damage than the attack itself did.

That does not mean we should have ignored it... that is only to invite further, more extreme acts of violence.

Instead, we destroyed the forces of two out of the four primary inimical nations and the two governments that backed the attacks directly and indirectly.

The simple fact is, that within DAYS of our taking on Saddam, Khaddafi was falling all over himself attempting to assure us that he'd given up all of his nuclear ambitions.

That's one less government that was working too openly to do us harm.

 
At 6/25/2012 1:51 AM, Blogger Ron H. said...

""Just because you're a congenital idiot does not obligate us to explain things to you over and over again until you, or we, DIE trying to help you comprehend the most basic aspects of geopolitics."

Yeah, yeah, that's an impressive diatribe, but you didn't answer the question.

 
At 6/25/2012 7:58 AM, Blogger VangelV said...

On Jefferson's inauguration as president in 1801, Yusuf Karamanli, the Pasha (or Bashaw) of Tripoli, demanded $225,000 from the new administration. (In 1800, Federal revenues totaled a little over $10 million.) Putting his long-held beliefs into practice, Jefferson refused the demand. Consequently, on May 10, 1801, the Pasha declared war on the U.S., not through any formal written documents but in the customary Barbary manner of cutting down the flagstaff in front of the U.S. Consulate.[22] Algiers and Tunis did not follow their ally in Tripoli.

In response, "Jefferson sent a small force to the area to protect American ships and citizens against potential aggression, but insisted that he was 'unauthorized by the Constitution, without the sanction of Congress, to go beyond the line of defense.'" He told Congress: "I communicate [to you] all material information on this subject, that in the exercise of this important function confided by the Constitution to the Legislature exclusively their judgment may form itself on a knowledge and consideration of every circumstance of weight."[21] Although Congress never voted on a formal declaration of war, they did authorize the President to instruct the commanders of armed American vessels to seize all vessels and goods of the Pasha of Tripoli "and also to cause to be done all such other acts of precaution or hostility as the state of war will justify."


Your source is not exactly accurate. First of all, Congress had passes legislation (prior to Jefferson's inauguration) that provided six ships that, "shall be officered and manned as the President of the United States may direct."

Jefferson sent the ships to the Mediterranean on the basis of that legislation and authority. If the Barbary kingdoms were to declare war the ships would protect American ships even if that meant destroying and sinking the pirate ships. But Jefferson told Congress that was all that he would do without the required declaration of war.

Sorry but your neoconservative spin does not hold up to scrutiny. When dealing with foreign affairs Jefferson continually went to Congress because that is where the authority resided according to the Constitution.

Bush did not send troops to protect Americans or chase a few cattle rustlers across the Rio Grande. He invaded a country that did not pose a direct threat to the United States without a formal declaration of war. While he did that he took away liberty from people at home. Obama is even worse.

 
At 6/25/2012 8:14 AM, Blogger VangelV said...

In short, Ron, you're a freaking ignorant, partisan moron.

Bush acted in a way that both Congress and the UN gave him permission to do, regardless of their after-the-fact "What, yu t'ought we wuz seryus 'bout dat?" responses.


Since when does a US president take marching orders from the UN? And the Constitution is clear. You don't go to war unless Congress declares war. The Barbary war actually shows how that is done. Jefferson only sent troops based on the legislation that gave him the authority. But he would not escalate the conflict without a formal declaration of war by Congress.

There was nothing either illegal or immoral about what he did -- in fact, it was so blatantly NOT the "War for Oil" which it has been painted as. If it were just that, then clearly, the cheap thing to do -- in money, lives, and political ease -- would have been to go in, kick Saddam out, and then replace him with an America-friendly thug as had been in power in the ME countries for a century and more.

Sure there was. Bush invaded a country that had nothing to do with 9/11 and was not a threat to the United States. He succeeded in getting rid of the secular Ba'athist government of Saddam and Iraq now has a Islamic government that is a close ally of Iran.

No, we went in and did the HARD THING -- we attempted to establish a proper government that gave power to the people who lived there.

As Ron pointed out, there is no constitutional authority for that to happen. You do understand what the 'rule of law' means, don't you?

Are/were they ready for that? Not sure -- the jury is still out on it -- but you can bet one thing... fail or not, there is now an entire GENERATION of Iraqis who have tasted freedom, and who will fan the desire for it in their children, come what may.

After a hundred generations in Iraq most of the Christians have been forced out to Syria, Egypt, and Turkey. The Mandaean faith has existed in Iraq for 1,800 years and is the last surviving of the Gnostic faiths. Saddam protected the Mandaeans from prosecution but most are now gone from the country. Is that what you mean by freedom?

 
At 6/25/2012 8:33 AM, Blogger VangelV said...

Ron, I for one, am really really sick and tired of explaining this crap to imbeciles like you over and over and over again. Go read earlier comments -- now as much as EIGHT YEARS OLD -- on the topic.

Ron asks for logic and references to the Constitution. You respond with noise and name calling. The reason is quite obvious. You have no clue what is going on and are one of the useful idiots that the neocons need to support their overreach.

It is now clear that Bush and the neoconservatives were wrong. There were no WMDs in Iraq. The 'intelligence' was made up and clearly faulty, just as the critics said it was when they exposed the many errors in the official story. They were certainly wrong in thinking that Iraq would become a docile protectorate like Kuwait. When that moron Paul Bremer fired all of the Baath Party civilian bureaucrats, and military officers he destroyed the means of control and sparked a bloody and fierce resistance by Sunnis. These fighters were not defeated by the American military but by good old fashioned ethnic cleansing. The Shia majority created death squads that killed many Sunnis and Christians. Sects that Saddam has oppressed but protected from such ethnic cleansing were pushed out of the country because they could no longer be assured that the religious fanatics could be kept in check.

And no matter how you try to spin this story, it is about oil. The US government knows that there is a huge depletion problem and is looking to lock up supplies in producing nations. The problem is that the government is now unstable and favours Iran to the United States. In a few years most of the Sunni elements will be purged from the government and Iraq will become an even bigger nightmare for American politicians than it is already.

 
At 6/25/2012 8:34 AM, Blogger VangelV said...

But you didn't answer the question.

He can't if he hopes to win the argument. When logic fails the only thing that national socialists resort to is yelling and calling people names.

 
At 6/25/2012 9:02 AM, Blogger VangelV said...

The USA does not have to do JACK SHIT to get enmity from others.

Of course it does. Most people around the world have a natural admiration for the Untied States and its people because of the freedom that was guaranteed by its Constitution. It takes stupid and often violent government action to turn this admiration into hatred. When your drones kill innocent people who were attending a wedding you can be assured that the relatives of those people who may have not thought much about Americans will automatically turn into enemies. When your military occupies another country it is clear that the people will resent its presence and will do what they can to get rid of the occupiers.

Your knowledge of history is obviously very weak and your logic non-existent. A bit of reading might help you shed yourself of some of your ignorance. This may be a good start. For the record, no matter what the neocons that you will trot out to try and discredit the thesis it was shared by Allan Bloom, the teacher of most of the neocons who were responsible for the spin and faulty intelligence that led to the war. I recall him taking care to carefully teach about thymos and how it can be harnessed by those in power or behind the scenes. His example was the use of suicide bombers, not in the Islamic world, but by Marxists in Sri Lanka. What we have seen in Iraq and Afghanistan supports that thesis very well.

 
At 6/25/2012 9:28 AM, Blogger VangelV said...

a) We are nominally about freedom and liberty and self-responsibility. There are ideologies which are diametrically opposed to those notions -- we could be Elwood P. Freaking DOWD and they'd STILL be out to create issues.

Really? Ever hear of the Patriot Act? I don't know about you but I doubt that a free country would tolerate their president executing citizens who have never been charged.

And isn't yours the country in which the government tells you what kind of lightbulb you can use, what the shower pressure in your shower has to be, and how much water there can be in your toilet tank? Is that your definition of free?

b) We are the top dog. There are ALWAYS those out there who would attack us solely for the purpose of "Counting Coup". DUH.

You need to borrow money from the developing world in order to finance your wars and have a financial system that is dependent on foreign creditors. That is not exactly the definition of top dog.

c) We are rich. If OWS crowd should serve to demonstrate anything, it's that there are ALWAYS those who would address their own failed circumstances by attempting to blame others for their failures, and resent and envy what they have. These people will use whatever force they have to STEAL or extort a piece of what the "rich" have. We can either buy them off (which invites further threats) or we can make it clear that anyone who EPHS with us will pay a much greater price than we will.

Rich if you don't look at the mountain of unfunded liabilities. If you do you rival the Greeks for being broke.

The fact is, the USA has both kinds of power -- few have considered that the nastiest blow that our enemies could direct against us occurred on 911. 3000 deaths and roughly 10 BILLION in property and economic damage.

3,000 deaths is tragic but hardly a big blow. And note that the damage was done by 19 guys with box cutters. The fact that so few could do so much damage with so little shows just how vulnerable your system is.

Within a single DAY, we had replaced those lost lives. Within a single DAY, our economy had shrugged off a blow that would destroy most economies, and recreated 10 billion in NEW WEALTH to replace the lost value.

Really? I think that you better check your numbers. The total debt doubled since then, the deficit is five times higher and unfunded liabilities have exploded. Anyone with a brain and the ability to think clearly can see that wealth has been destroyed by the useless but expensive wars in Iraq and Afghanistan. But you don't exactly have the ability to think very clearly.

 
At 6/25/2012 9:43 AM, Blogger juandos said...

"I think that he should have apologized for lying about the WMDs and lying about the costs of the unnecessary conflicts that he supported"...

Still repeating your delusional lie, eh vangeIV?

Repetition of nonsense won't make it morph into reality...

"Is that what the TSA and DHS are advancing. Orwell would have been proud"...

Did you pull that nugget out of your private library vangeIV?

 
At 6/25/2012 10:03 AM, Blogger VangelV said...

Still repeating your delusional lie, eh vangeIV

Repetition of nonsense won't make it morph into reality...


Delusional? The admission comes from the horse's mouth.

http://www.youtube.com/watch?v=soohikNdbWs

http://www.youtube.com/watch?v=x7xyd_IRgGs&feature=related

 
At 6/25/2012 12:21 PM, Blogger juandos said...

"Delusional? The admission comes from the horse's mouth"...

Bush unlike your hero vangeIV understood the need for sercurity of intelligence sources...

Then again you libbies always thought Bush was a liar but now you want to believe him, eh?

LOL!

WikiLeaks Show WMD Hunt Continued in Iraq – With Surprising Results

Syria after Lebanon: The Growing Syrian Missile Threat

December 16, 1998 - STATEMENT BY THE PRESIDENT

Democrats on Iraq + WMD's

 
At 6/25/2012 4:07 PM, Blogger Ron H. said...

OBH

Or do you prefer Phineas T. Bluster?

This morning I reread your several lengthy comments searching for actual content amidst the emotional ranting and vitriol, and I'm frankly unable to find any.

Was there a point you wished to make, or some meaningful argument on some topic?

 
At 6/25/2012 4:55 PM, Blogger VangelV said...

Bush unlike your hero vangeIV understood the need for sercurity of intelligence sources...

Is that why Bush fell for the lies coming from Curveball? Or did not want Wilson pointing out that the Niger documents were fake? You are free to believe whatever you want. But if you want to understand the lies I suggest that you pay close attention to Bush's own words.

 

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