Median income is on the rise again. Another result of Obama's economic policies.

It's all good!

Which policies?

poor armed victim wrote:

Which policies?

His economic policies. Duh!

Obama rules! wrote:

It's all good!

Maybe not. IIRC, average (mean) income is rising faster. That implies that the incomes of the rich are rising even faster. I mean, it's good that median income is up, but there's more going on.

Earth to nimrod wrote:

poor armed victim wrote:

Which policies?

His economic policies. Duh!

What economic policies? Name them? You can't because he has none.

poor armed victim wrote:

Earth to nimrod wrote:

His economic policies. Duh!

What economic policies? Name them? You can't because he has none.

That chart isn't adjusted for inflation. Even if it were, all it proves is that we're less wealthy than when GWB was in office.

Can we start modifying the constitution to allow a 3rd (and 4th) term already? Get with it, people!

jamin wrote:

That chart isn't adjusted for inflation. Even if it were, all it proves is that we're less wealthy than when GWB was in office.

What inflation?

Clinton was the one responsible for the housing crisis.

In fact, Bush tried to get those laws reviewed on 3 separate occasions due to them being dangerous and was told no by a democratic held house or senate.

No one was going to stop the poor from getting housing (which should be a good thing, right?), even if it meant bad loans! Not even president Bush.

i'm still making minimum wage flipping burgers, what's on the rise?

So medium income was around 53,900$ when Obama took office and reached a low of around 49k in 2011. Now they are rising again. That's good, but they are only just again getting to recession levels. Not much to be proud of.

It's Obamacare. Man, that Obama is a fool he has no clue and Obamacare is ruining our economy.

Oh WAIT!!!! The economy is strong and getting stronger.

Never mind. I'll make something else up about Obama to make him look bad. I know!!! I'll watch FOX News!!!!

dynomite wrote:

Clinton was the one responsible for the housing crisis.

No, people who bought more house than they could afford were responsible for the housing crisis.

Ole Timer wrote:

dynomite wrote:

Clinton was the one responsible for the housing crisis.

No, people who bought more house than they could afford were responsible for the housing crisis.

They wouldn't have been able to get subprime mortgages without Clinton, his wife, Obama, and Barney Frank forcing the banks to open up credit lines to people who were not qualified for them.

In July 1993, President Clinton asked regulators to reform the CRA. Discussing the reasons for the Clinton administration's proposal to strengthen the CRA, Lloyd Bentsen, Secretary of the Treasury at that time, said, "The only thing that ought to matter on a loan application is whether or not you can pay it back, not where you live."[19] The CRA regulations were substantially revised - using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain to banks and regulators when banks did not meet their CRA obligations; allowing community groups that marketed loans to targeted groups to collect a fee from the banks just like other loan product marketers.[11]

In May 1995, the Office of the Comptroller of the Currency also revised its regulations concerning CRA implementation. The new regulations allowed lenders subject to the CRA to claim community development loan credits for loans made to help finance the environmental cleanup or redevelopment of industrial sites when part of an effort to revitalize the low- and moderate-income community in which the site is located.[20]

During March 1995 congressional hearings William A. Niskanen, chair of the Cato Institute, criticized the proposals for political favoritism in allocating credit and micromanagement by regulators, and that there was no assurance that banks would not be expected to operate at a loss. He predicted they would be very costly to the economy and banking system, and that the primary long term effect would be to contract the banking system. He recommended Congress repeal the Act.[21]

Responding to concerns that the CRA would lower bank profitability, a 1997 research paper by economists at the Federal Reserve found that "[CRA] lenders active in lower-income neighborhoods and with lower-income borrowers appear to be as profitable as other mortgage-oriented commercial banks".[22] Speaking in 2007, Federal Reserve Chair Ben Bernanke noted that, "managers of financial institutions found that these loan portfolios, if properly underwritten and managed, could be profitable" and that the loans "usually did not involve disproportionately higher levels of default".[5]

Howard Husock, vice-president of the market-oriented conservative Manhattan Institute and author of a book on American housing policy, writes that once in effect, the new rules substantially increased the number and aggregate amount of loans to low- and moderate-income borrowers for home loans. The Senate Banking Committee estimated that as of 2000, as a result of CRA, such groups had received $9.5 billion in services and salaries. As of that time such groups also had received tens of billions of dollars in multi-year commitments from banks to loan to local communities, including the Association of Community Organizations for Reform Now (ACORN) housing advocacy organization $760 million; Boston-based Neighborhood Assistance Corporation of America $3 billion; a New Jersey Citizen Action-led coalition $13 billion; the Massachusetts Affordable Housing Alliance $220 million..[23]

According to a United States Department of the Treasury study of lending trends in 305 U.S. cities between 1993 and 1998, 467 billion dollars in mortgage credit flowed from CRA-covered lenders to CRA-eligible borrowers. The number of CRA mortgage loans increased by 39 percent. Other loans increased by only 17 percent.[24]

[edit] Legislative changes 1999

In 1999 the Congress enacted and President Clinton signed into law the Gramm-Leach-Bliley Act, also known as the "Financial Services Modernization Act," which repealed the part of the Glass-Steagall Act prohibiting a bank from offering a full range of investment, commercial banking, and insurance services. The bill was killed in 1998 because Senator Phil Gramm wanted the bill to expand the number of banks which no longer would be covered by the CRA. He also demanded full disclosure of any financial deals which community groups had with banks, accusing such groups of "extortion." In 1999 Senators Christopher Dodd and Charles E. Schumer broke another deadlock by forcing a compromise between Gramm and the Clinton administration which wanted to prevent banks from expanding into insurance or securities unless they were compliant with the CRA. In the final compromise, the CRA would cover bank expansions into new lines of business, community groups would have to disclose certain kinds of financial deals with banks, and smaller banks would be reviewed less frequently for CRA compliance.[25][26][27] On signing the Gramm-Leach-Bliley Act, President Clinton said that it, "establishes the principles that, as we expand the powers of banks, we will expand the reach of the [Community Reinvestment] Act".[28]

From the NAACP Percentage of Subprime mortgages

Compare the above graphs to the time-line below.

September 1999 Under pressure from the Clinton Administration, Fannie Mae Corporation eased the credit requirements on loans that it will purchase from banks and other lenders.

"Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market."

September 2003 The Bush administration proposes oversight and regulation of Fannie and Freddie.

September 2004 The Office of Federal Housing Enterprise Oversight submitted a list of remedies and warnings that something was amiss at Fannie and Freddie,

May 25, 2006 McCain co-sponsors Federal Housing Enterprise Regulatory Reform Act of 2005. Vote was on party lines, Democrats kill the bill.

March 22, 2007 Obama-come-lately writes to Paulson and Bernanke to convene a “a homeownership preservation summit with leading mortgage lenders, investors, loan servicing organizations, consumer advocates, federal regulators and housing-related agencies to assess options for private sector responses” to the wave of foreclosures.

“Regulators are partly responsible for creating the environment that is leading to rising rates of home foreclosure in the subprime mortgage market,” Obama, the Democratic presidential candidate, said in the letter. “We cannot sit on the sidelines while increasing numbers of American families face the risk of losing their homes...

This doesn't look like a warning to me, it looks like he's complaining about the regulators.

Oct 2, 2008 Joe Biden claims that Obama warned about the sub-prime mortgage crisis two years ago. He did not.

Clinton Administration Changes of 1995

These revisions[5] with an effective starting date of January 31, 1995 were credited with substantially increasing the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. These changes were very controversial and as a result, the regulators agreed to revisit the rule after it had been fully implemented for seven years. Thus in 2002, the regulators opened up the regulation for review and potential revision.[citation needed]

Part of the increase in home loans was due to increased efficiency and the genesis of lenders, like Countrywide, that do not mitigate loan risk with savings deposits as do traditional banks using the new subprime authorization. This is known as the secondary market for mortgage loans. The revisions allowed the securitization of CRA loans containing subprime mortgages. The first public securitization of CRA loans started in 1997 by Bear Stearns. [6] The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent. [7] [8]

Other rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks. By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market. [9]

George W. Bush Administration Proposed Changes of 2003

In 2003, the Bush Administration recommended what the NY Times called "the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago." [10] This change was to move governmental supervision of two of the primary agents guaranteeing subprime loans, Fannie Mae and Freddie Mac under a new agency created within the Department of the Treasury. However, it did not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enabled them to issue debt at significantly lower rates than their competitors. The changes were generally opposed along Party lines and eventually failed to happen. Representative Barney Frank (D-MA) claimed of the thrifts "These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis, the more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Representative Mel Watt (D-NC) added "I don't see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing."[11]

The Democrats Added Massive New Provisions

"Part of the increse in home loans was due to...lenders like Countrywide...using the new subprime authorization..

The revisiions allowed the securitization of CRA loans containing subprime mortgages."

Subprime mortgages tripled in 1998 and 1999, REMEMBER THAT?

Fannie Mae and Freddie Mac sold those bad mortgages to Wall Street.

2004 Fannie Mae subprime loans - 92% were ARMs!

2005 91% were ARMs!

Before the Community Reinvestment Act Expansion of the Clintons (1995) housing values tracked with inflation.

After the CRA expansion [1995 and beyond], home prices became unhinged from inflation.

In 2003 the Bush Administration tried to overhaul the housing finance industry, by supervising Fannie Mae and Freddie Mac. The Democrats stopped any attempts at regualating Fannie and Freddie.

In 2005 John McCain warned about the inevitable collapse of Fannie and Freddie. The Housing Enterprise Regulatory act of 2005.

Fanny and Freddie wrote:

They wouldn't have been able to get subprime mortgages without Clinton, his wife, Obama, and Barney Frank forcing the banks to open up credit lines to people who were not qualified for them.

I don't blame pols for personal failings of the citizenry. Too many people bought homes above their price points (and knew it), plus too many people bought homes as "investments" assuming housing values would always go up. Just because you CAN buy something doesn't mean you should, the government (be in Obama, Clinton, Bush, or whoever you want to blame) forced no one to buy a home above their means.

I don't know about cause and effect of policies but this would be an important turnaround if it gains momentum.

Most trends economically are going in a positive direction.

In the mid 2000s most spending was debt fueled and based on cashing in on growing home equity. And that spending provided growing revenue for companies to pay more.

That's gone now. Lending is tight and spending is based on consumer earnings to a greater degree than before with much less spending through debt.

So we had a correction.

This is the baseline of our economy and we just have to keep taking those steps forward.

They are small steps but based on real value.

The presidents are getting too much blame and credit for this.

Bush did a great job of stepping in, listening to his economic advisers and helping prevent a more serious collapse in the fall of 2008.

Obama did a great job of pushing more stimulus in 2009 to get things turned around.

Now we're on our own to do our jobs and spend money.