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http://www.beachwoodreporter.com/politics/nader_predicted_wall_street_me.php

Nader Predicted Wall Street Meltdown
By The Nader/Gonzalez Campaign
Posted on September 17, 2008

Eight years ago, consumer advocate Ralph Nader correctly predicted that the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) were on track to follow the savings and loan industry of the 1980s and 90s into a big financial heap of trouble. Nobody listened, and taxpayers are now at risk of losing tens of billions of dollars. Wall Street is being shaken to its foundation. American International Group Inc., the biggest U.S. insurer by assets, is now teetering on the brink of ruin after suffering losses of $18 billion in the past three quarters, largely due to its sub prime mortgage exposure.

"Nader Rips Mae and Mac," declared the Milwaukee Sentinel Journal on June 16, 2000. "Ralph Nader, warning of a potential taxpayer bailout similar to the savings and loan crisis, urged lawmakers to cut government benefits to mortgage-market giants Fannie Mae and Freddie Mac - which he called 'poster children for corporate welfare.'"

This year Nader, who is also running for president as an independent, is getting credit for his prescience.

"Give one presidential candidate credit for identifying the problem and getting the policy right - and doing so before the twin government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac went into the tank in mid-July," wrote Lou Dubose in The Washington Spectator on Aug. 1. Dubose went on to quote Nader's June 15, 2000 Congressional testimony about HR 3703, a bill that would have reigned in some of the most dangerous tendencies of GSE's, had it passed.

In a letter to SEC Chairman Christopher Cox in 2006, Nader also criticized the exorbitant salary of GSE executives Jamie Gorelick, Daniel Mudd, Robert Levin and Timothy Howard, and noted that their financial incentives were in direct conflict with consumer financial security because of the grave moral hazard created by accounting manipulations they sanctioned that benefited their personal wealth, with no penalty for being caught.

"As you continue to investigate the Fannie Mae accounting debacle, we are writing to urge you to seek civil sanctions, including disgorgement, from senior executives who profited directly from the misconduct at Fannie Mae, and that you urge the Department of Justice to give careful consideration to criminal prosecution of these individuals," wrote Nader.

Candidate Nader has called for an immediate halt to the increase in the national debt, an end to corporate subsidies and unconditional taxpayer bailouts of corporations, and a start to the aggressive prosecution of corporate criminals.

In his prepared remarks for New York Times editors in its Washington Bureau, Nader stated: "Given the contrast between the 'free market' ideology of the Republicans and the corporate or state socialism that is their increasing practice, the time is ripe for full Congressional hearings next year on the organized power, greed and lack of regulation that is shaking the foundations of Wall Street."

Nader added, "What we need to do now is find a just way to deal with the millions of homeowners facing foreclosure and make sure that this level of financial market manipulation does not happen again."

He elaborated a 10-point plan to cool off the financial markets meltdown:

1. No bailouts without conditions and reciprocity in the form of stock warrants.

2. No more lobbying for any company that is bailed out.

3. No golden parachutes and get out of jail free cards for guilty executives.

4. No bailouts without public hearings.

5. Reduce the moral hazard in U.S. mortgage markets by introducing covered bonds for the majority of mortgage products as they do in Western Europe. That gives institutions that finance mortgages an incentive to be prudent, because they cannot just unload them and wipe their hands clean of the liability, but are instead on the hook if the homeowner defaults.

6. Maintain neighborhood stability and housing security by passing a law with a sunset clause allowing below median-value homeowners facing foreclosure the right to rent-to-own their homes at fair market value rates.

7. Avoid future housing bubbles by removing implicit government guarantees for new mortgages that exceed thresholds of greater than 15-20 times the annual fair market rent value of the home.

8. Make the Federal Reserve a Cabinet Position, so it is accountable to Congress, as well as making sure all Federal Reserve Bank presidents are appointed by the President and answerable to congress.

9. Reduce conflicts of interest by taking away power for auditor and rating agency selection from companies and placing it in the hands of the SEC to be administered on random assignment.

10. Implement a securities speculation tax, starting with derivatives to deter casino-style capitalism.

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" It is important to recognize that this crisis was entirely forseeable and preventable ". Ron Paul saw this over six years a go but no one would listen then and they will not listen now because as most progressives understand, that the U.S. government is not a government for the people; by the people; of the people; and that is a canard that has been around a long time and what we really have is: a government for the corporations; by the corporations and of the corporations! The latest government exculpatory, bailout of some of America's largest financial institutions is just another epiphany of this truth. These financial,corporations were driven by greed and facile,egregious investments and now they want the U.S. taxpayers save them from bankruptcy! How many Americans have filed bankruptcy for medical reasons? How about giving these people a break for starters.

cosmobilly: "The only point that matters is why did nobody listen, and most still aren't."

No one listens to people who make sense is because they do not have the power to make people listen and influence legislation.

The way you influence legislation is not through writing letters and petitions - but through building power. (Or , if you are going to write a letter the legislator needs to know that you have power - and not just blabbering).

The way to build power is to send notice to your congress person and the presidential candidate, that if you do not listen - and implement policies - you'll be voted out and replaced by hunderds of people like Nader.

But what happens? Every four years, liberals bring out the nonsense of vote for a Democrat, or else the world will end next week. They demonize Nader, and destroy his credibility. In effect the liberals who want you to vote Democrat, for the war monger Obama, are the ones who are destroying your power and ability to influence events, and policy. And that includes sites like CD, where critical comments about the Democrats are only allowed to appear in the comments section, but are clearly forbidden in the main section.

You want change? Really? Seriously you want change. Tell Obama, you have made your decision, you are not voting for him, or any of the Democrats. If he gets a million or more such letters - you'll see him change. "Open letters" "petitions" "pleading" and so on will only lead to more of the same.

So long as liberals and progressive types pander to the Democrats, real thoughtful people who don't want to just keep building wars and more wars - will remain marginalized.

http://almusawwir.org/resistance/

Greenspan did warn us of FROTH.

Cosmobilly, Excellent comment. It seems that most Americans have little interest delving more deeply into important matters that affect their lives. Actually, this seems more of a universal phenomenon. If we humans were collectively more wise, we wouldn't be in so much trouble. But alas, humanity itself is in big trouble. What to do?

People aren't listening because all they know is the corporate "mainstream" media. I learned about this from sources outside of the mainstream, such as Democracy Now! Most people ARE very busy with their lives of work, play, their kids, marriages, watching t.v. - they aren't able to dig up the information sources they need to be well informed. This is why a total boycott of all corporate media and their sponsors is necessary. We simply have to take over the corporate media with sources of our own. We would have to pull together to do so.

It's the war, it's the war, it's the war!

The United States federal government has financed the war by borrowing several trillion dollars, first from foreign investors at interest, second from our state governments, third from our national infrastructure in a hundred ways.

We're going to have fewer trained engineers and more bridge collapses for 20 years.

States are cutting cities short. Cities are selling water companies for cash, knowing that the new private water monopolies will eventually charge 10 times as much for water if they feel like it.

Because our government has shorted its people, people have nothing to spend and now the economy is sick (to say nothing of the people). The foreigners who lent private companies money have all pulled back sharply. That's why our banks are collapsing. So now the government is borrowning a few hundred billion more and bailing out the banks.

The next wave is when they stop lending to our government too. That's the big one.

Too many accurate and to the point comments above. I can't stand it anymore. I'm going out as soon as I finish this comment and get gutter puking drunk. And when I get home I'm going to do several bongs. Don't worry. I'm taking a cab.

-- EKATON --

The on-coming financial collapse could be the catalyst that some of us have predicted will start the revolution that is long overdue. The pattern is predictble. When the people have nothing left to lose, they have nothing left to fear. The pattern is predictable. Look what happened in France in 1789, in Russia in 1917, Cuba in 1959. Fasten your seatbelts, we're in for a bumpy ride.

OK let me get this straight. The government through massive chicanery, illegal war (and war profiteering) etc. etc. has sucked bazillions of dollars out of the pockets of americans and into the pockets of a few CEOs and politicians. Now the Fed, a privately owned for-profit bank, is going to loan a ton of that money back to us, charging interest of course. WTF?? And no one is talking about it honestly in the media, of course. Economic crash my Aunt Fanny. This is all a well engineered rip-off. How are the personal fortunes of the Bushes, Clintons, Cheneys, Rumsfelds, McCains, etc etc? ALL GROWING at our expense.

At what point will americans get it that they have allowed themselves to be utterly scammed, and hold the thieves accountable? I know, I know, most people are too busy watching TV and believing what they are told to be as outraged as they have a right to be.

By 2002 the mainstream business media were SHRIEKING that meltdown was imminent in the mortgage market.

There’s no excuse for allowing the collapse of the U.S. economy to happen.

No amnesty, no pardons.

Pursue the Bush administration beyond January 20 until they are brought to justice.

FREE AMERICA

REVOLUTIONARY (DIRECT) DEMOCRACY

The MSM is selling the idea that this move will actually make money for us down the road a ways, they don't say how far down the road. In the meantime we still have a national deficit that nobody seems to be mentioning as part of the ecomomy. I have a feeling that they don't really know or care. Before 9/11 several millions went missing at the Pentagon. Did they ever find it? And then another few million go missing in IraQ. Did they ever find it? They hold a lot of hearings but does any one ever DO anything? This amount of money is just too good to be true and it will be a scramble of the century to be in on the take. Not to worry, we won't see any of it in this lifetime.

The point above about the war being a key factor is good.

Also, when the author states that the "central problem" is the housing bubble, he is missing more than just the war.

The entire market is completely insane. As MiMiCcSs recently pointed out in a link to another article, the derivatives "market" pretends to have a quadrillion dollars ($1,000,000,000,000,000) of value. This illusionary "value" is haunting every financier in the intertwined financial markets, which is underlying the sharp sudden massive government intervention to try to stabilize the overall market.

The "central problem" is deregulation, under Reagan, Bush, Clinton (especially Clinton), and Bush II. And it is so far gone, this collapse will not be stopped (even if they do manage to arrest the collapse temporarily with desperate interventions) until the entire financial system is in a pile of dust.

"Over the last twenty-eight years Republicans have hammered Friedmanisms into the heads of the unsuspecting public and professionals alike. The damage to the average worker and the public common has been so great that it will take more than a generation for us to work out of this hole. These bankrupt ideas have lead to a bankrupt financial system.

Now is the time to get together people who understand that economics is about more than a business cycle.

As the song goes, “We can work it out”

Origins of failed Republican policies can be found in the reference below.
Reference: Profits Without Production, by Seymour Melman a book from the 80’s"

Dean Baker continues the Greenspan-bashing that has become fashionable without criticizing the Fed itself, as though the private corporation, chartered by the government to be independent of the government were merely a tool badly used by Allan Greenspan.

Nader makes some substantial proposals concerning the Fed ( thanks to Nannie for making the effort to post them ) that might change the character of the institution. No other candidate challenges the Fed in any way and Dean Baker is no different.

Why is it not apparent to everyone that the Fed is a private club that serves the in-group first of all, and the people only secondarily? Isn't it clear now, in the midst of the crisis, that the Fed and its handmaiden, the Treasury, are dispensing largess to their insider cronies at the expense of the great mass of people while at the same time invoking the general welfare in the most egregiously hypocritical fashion imaginable?

Why is Dean Baker blind to the In Group character of the private banking system? PRIVATE BANKING SYSTEM. Get it?

Why doesn't Dean Baker criticize the Fed itself? Didn't it create the current situation because it gave credit to the wrong people for the wrong reasons?

And could this be because it is a private club dedicated to the welfare of its members and suck-ups?

Correction. Ron Paul challenges the Fed and the IRS.

We do not need CERN to create an all consuming Black Hole.

"AP – President Bush, flanked by Federal Reserve Chairman Ben Bernanke, left, and Treasury Secretary Henry … WASHINGTON – Faltering financial institutions whose toxic assets have brought markets to the brink of catastrophe could unload their bad debt on the government, and in turn the taxpayer, under a half-trillion dollar bailout being crafted by the Bush administration and Congress."

The Republicans under George W. Bush have beat the Europeans to it.

Check the link, this guy Reinhardt called out the stock drop 2
months ago to the day:

http://finance.google.com/group/google.finance.983582/browse_thread/thread/aad550b590f931bf

more...

http://finance.google.com/group/google.finance.983582/browse_thread/thread/a94b770683c1508c

Sophie Scholl-The Final Days

Thank God we still have socialism for the rich. How would they make the payments on their multi-million dollar mansions and Mercedes’ without a little helping hand from Joe Middle Class American Taxpayer. Like you, I often worry for the rich too.

The American Dream is failing because the American Dream has become the world's nightmare.

http://blogoffanddie.wordpress.com

So long Dubya, we'll always have debt and Guantanamo

Sioux Rose

CAVE DWELLER: You're right on.

I see the same debacle, by the way, with insurance firms. There was an opening article either on Yahoo or AOL that asked the question, "What would Florida DO if THE BIG ONE hit?" It answered that our insurance reserves may have 1 billion (if that), yet big hurricanes hitting major cities these days run up tolls well over 9 billion (in replacement costs).

I wonder if it's worth it to pay the insurance knowing that if the s--t hits the fan, the insurance companies can say there's no money in the pot. This reminds me of several medical cases I know of personally where persons paid each year and then when they needed the $ for surgery or some medical practice, the insurance company would have the audacity to state that THAT particular condition was not covered!

So there are parallels with big $/Wall St playing fast and loose with capital, and when push comes to shove, demanding PUBLIC support. Just as insurance companies may SAY they don't have the funds when citizens require them.

I took our $300 from my local bank and asked if a small bank would go down if the big ones did, if there was to be a RUN on the banks. The cashier told me not, it was federally insured. I said that if the FEDS don't have the actual $ to back these accounts, the insurance isn't worth anything. And closed by stating, "We're running on a severe deficit of INTEGRITY." I left her with that thought. Right now I am deliberating on the wisdom of paying $960 homeowner's insurance... I have NO just in any of these corporations. Another parallel is the greed-engine behind big pharma, and the drug after drug, heavily marketed to rope in quick profits only to result in the battery of case results emerging LATER, as if the public becomes the TRUE guinea pig test market of the safety of these chemical molotof cocktails.

DECENCY, integrity, honesty, accountability do not show DIRECTLY on any profit-loss sheet, but their bankrupty may well trump that of the ones we can enumerate more tangibly.

Sioux Rose

(typo correction, I have no TRUST/not just in these industries.)

Sioux Rose

I forget the poster who made the analogy that a Bush presidency was a lot like holding onto a marriage with an abusive spouse. Now we have the battering (Tasers at home, war abroad), bankruptcy ($ spent on war profiteers & cronyism of all sorts), and are left feeling TOTALLY demoralized. Pragmatists in our forum argue that at least Obama has a streak of THE human left in his soul, even if he servest he same interests as his blood thirsty/half cocked/half dead rival. Idealists say, "No more! We must show our unwillingness to go along further, and vote for the fledgling 3rd party candidate." What a tragedy that our selection process is as stream-lined (or nearly so) as that of a 3rd world dictatorship.

Seems to me, in that all things come full circle, we ARE being reduced to servants of the crown, serfs to the lords of plenty... even when that plenty has been absconded from us by hook, crook and fake legislation... like the new "eminent domain" laws. I wonder if those of us with gold crowns can lay claim to them much longer?

http://articles.moneycentral.msn.com/News/US-on-financial-turmoil-so-what.aspx

The majority have no idea what's happening to them! The MSN/Zogby poll above is proof that the patriotic flag waving people of this country will live in a bubble.

Wait till that busts too!

I dont think this is socialism for the rich..as some post, it is engineered ripoffs as others have posted. As a person far removed from those hi-level 'bailouts', It seems to me that the megafinancial sector have found just another loophole. It seems to me that they are simply buying, accumulating, and bundling all the very risky/failing instruments they can get their hands on...and dumping that dirty little part on the doorstep of their government partners. Does anyone believe that these megacorps just got caught flatfooted totally unaware? I conclude this because as the CEO from BearStearns testified infront of some congressional committee...that guy, that CEO claimed: 'we failed because of some rumors'. HAHHAA ...I nearly fell out of my chair as I watched the circus. OH THE POWER OF RUMORS. And so the story goes..Leamon Bros., & Merrill Lynch also have found the loophole, but I would hypothesize that all the 'good'/lively assets they own have long since been carefully separated and protected from the long arm of the law.
Run Ralph Run!!!

wild;)

Greenspan has always struck me a bit like Chance the gardener in BEING THERE. What ever unintelligible dribble he put out was always declared to be prophetic. If he said inflation and unemployment were low it was accepted even if prices were climbing rapidly and thousands of people were out of work or now in bad jobs with no benefits.

The world was great because he said so and this massive collapse is not his fault either. It is an accident of completely unpredictable cause! (all those people who had predicted this collapse were formally loony, now non-existent because the myth of Greenspan must continue)

The fed under Greenspan didn't regulate to it's full power, never asked for better regulation, and failed to warn anyone in a forceful and timely way.

Bernake (spell?) is not asking for regulation to fix the problem either. He is playing Curly of the 3 Stooges drilling holes in the bottom of the boat to drain out the water running in. All these bail outs may just delay a crisis that we could survive now but if allowed to grow by postponement may make the depression seem mild.

I must have been - and still are- awfully naive...thinking that government was here to protect me. It would, yes, if I was awfully rich.

In our town the first it was housing, then financial institutions, then car dealer ships, furniture stores, nurserys and any busniess dependent on the housing market. It is amazing to see them disappear. What is next?