Spread the wealth how? Look at his past. Obama in this video, addressing his work with ACORN litigation against the banks and relating to the Community Reinvestment Act and the failure of Freddie Mac and Fannie Mae, as they relate to the current real estate and financial crisis, states that, and I quote:
"Subprime lending started out as a good idea, helping Americans buy homes who previously could not afford to. Financial institutions created new financial instruments that could securitize these loans, slice them into finer and finer risk categories, and spread them out among investors and around the country, as well as around the world. In theory, this should have allowed mortgage lending to be less risky, and more diversified."
"The original idea was a good one, which was, lets see if we can distribute risk more broadly, and make it easier to provide loans to people who otherwise might not be able to get one."
Listen for yourself. You cannot dispute the mans on words recorded live:
http://www.youtube.com/watch?v=Lr1M1T2Y314&feature=related
Obama in this second video is campaigning at a convention of Acorn and I believe two other Community Activist's organizations. Ask if he will be their ally if he becomes President, Obama says, quote:
"Yes, but let me say that before I even get inaugurated, during the transition we are going to be calling all of you in to help us shape the agenda."
See and hear it for yourself. Obama promised that Acorn and other groups like it will setting his agenda if elected:
http://www.youtube.com/watch?v=8vJcVgJhNaU
Below is a link to C-SPAN video clips of the Congressional hearings at roughly the time McCains attempt at S.190. to fix Fannie and Freddie. See for yourself who said what.
http://www.youtube.com/watch?v=_MGT_cSi7Rs
See also
http://www.newsweek.com/id/164732 from this web site. (oops!) stating that Freddie Mac was spending tax payer money to target Republicans in 2005 who were trying to regulate Fannie and Freddies fraud. Democrats were not targeted, as the were all in the tank with Fannie and Freddie to kill the regulations. Hear that, the article admits that Republicans were trying to regulate Freddie and Fannie, and Democrats were trying to stop it from happening as a means to facilitate the Community Reinvestment Act.
See also: http://www.newsweek.com/id/164972
Stating that Gramm-Leach-Bliley Act wasn't what caused the meltdown, and noting that "economists on both sides of the political spectrum have suggested that the act has probably made the crisis less severe than it might otherwise have been."
Why The Banks All Fell Down
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In Joseph Sargent's 1970 film "Colossus: The Forbin Project," the U.S. president loses confidence in his judgment about how to manage nuclear weapons and turns over control to a computer named Colossus. Soon after the change is announced, Colossus displays a message on its main console: THERE IS ANOTHER SYSTEM. It turns out the Soviets have done the very same thing. Soon the two machines are communicating with each other. After a struggle resulting in the detonation of two nuclear bombs, the computers gain complete control over both governments.
"Colossus" may have something to teach us about the current financial crisis. It is certainly more instructive than the two most common explanations. The first is that banks recklessly gambled in uncertain and unproven markets. The second is that regulators took a holiday while this party raged on.
But the banks didn't "gamble." Instead, they locked themselves, Forbin-like, into computer-based financial models that have an obvious systemic flaw. As Avinash Persaud, an economist and chairman of Intelligence Capital, argued in an award-winning essay almost eight years ago, the dominant models for market-sensitive risk management, whether they're run on computers or not, are missing a critical piece: herd behavior. When such incomplete models get wired into the investment houses of every major economy—with servers sometimes co-located to avoid the millisecond lag that bicoastal or intercontinental communication necessarily creates—this omission leads inevitably to the kind of terror we've seen the past few months.
The models governing our financial system were developed in the 1950s. They were built, as Persaud explains, upon the assumption that "each user is the only person using them." That assumption may have made sense when only the Rand Corporation (which developed the models) had the data to act upon them. But as Persaud wrote in the Financial Times in March, in "today's flat world, [where] market participants from Argentina to New Zealand have the same data," the assumption is nothing short of nuts. As the market shifts, the models used by all the major investment banks "throw up the same portfolios to be favored and those not to be." This is the Heisenberg uncertainty principle for financial markets: by being observed, the observed gets changed. The global, simultaneous and practically instantaneous "adjustments" lead "the herd" (a.k.a. our financial system) right off the cliff.
"But why," faith-based free marketers will ask, "doesn't the market figure this out? Why don't newer models outcompete the old?"
The answer is in part (and weirdly) cultural, and in part regulatory. To resist the models requires a George Soros-like confidence. Few have the courage to stand up to the "quants"—math geniuses, or engineering wizards, who feign certainty despite running models that largely omit the most basic John Nash-based insights into strategic thinking. The safe thing (for a financial manager) is to follow the numbers, even if that leads the financial system off the cliff.
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