Michele Bachman is connected to Wall Street through Steve Moore’s Club for Growth.
The club was founded in 1999 by Steve Moore, frequent guest of Larry Kudlow and a member of the Wall Street Journal’s editorial board.
Steve is a pretty nice guy. But the Club for Growth is anything but nice. The club has a PAC, and supports very conservative politicians, including Bachmann.
The Club for Growth supports supply side economics, which Herbert Hoover called “percolation” and Art Laffer called “trickle down”. Of course we have little demand in society so theoretically you could supply all the loans you want and no one would want them or qualify for them.
However, modern supply side economists, and Bachmann, will have a diabolical success if the key variable, credit scores, are loosened as a means for determining loan recipients. If you literally give money away to any warm bodies, you will have people borrow, and you will generate bubbles.
The only problem with this is that it undermines the stability of house prices and undermines the 30 year fixed loan. Your house could crash in price by the time your stable loan matures, with all the easy money that the Club for Growth apparently wants to flow. It becomes problematic to take out a fixed 30 year loan, the anchor of American greatness in property value, if your house value is subject to so much manipulation going forward.
Barney Frank was a part of the original housing bubble, kick starting it with the CRA. That bubble was then taken over by the shadow banks and investment banks, and became much larger between mid 2003 until the crash than it would otherwise have been have been. However, with Dodd-Frank, Barney has taken the traditional Democratic view that main street must be protected from the toxic loans that the supply siders want. We have this from Marketwatch:
“Michele Bachmann, the Club for Growth, and others in the right-wing coalition have now made their agenda for the financial sector very clear: they yearn to return to the thrilling days of yesteryear, so the loan arrangers can ride again – untrammeled by any rules restraining irresponsibility, excess, deception, and most of all, infinite leverage,” Frank said in a statement.
I have spent a lot of time here independently arriving at the same conclusion regarding Paul Ryan, Eric Cantor, and even the libertarians like Ron Paul. Libertarianism affords no protection from these greedy Republicans. Even Mike Huckabee calls the Club for Growth the club of greed. We all know he is no longer running for president.
The Club for Growth has instituted the RINO Watch. RINO means “Republican in name only”. People who do not support their easy money agenda are on the RINO Watch.
I have written about the desire of Jamie Dimon to seek the complete repeal of Dodd-Frank. Sorkin reported that on Kudlow a while back. The consistent financial view of Bachmann, Dimon, Cantor and his hedge fund buddies, Ryan and the other financial heavyweights is that Dodd-Frank stands in the way of predatory loans. Indeed, the consumer regulations were set up to educate consumers about the toxic aspect of easy money loans. But most Republicans just don’t want borrowers to know! And the crack cocaine of securitization is also another reason these people want the Dodd-Frank law repealed. The IMF wants austerity so that growth will come from ponzi lending! The Volcker Rule is a major component of Dodd-Frank. It stopped the casino as it relates to housing loans. The financial community wants to abolish it as their greed knows no bounds.
A particularly odious aspect of this greed is that many of the people who want to start the casino also are the first to tell the borrower that it is immoral for him to walk away from the toxic loan that he got in the last housing bubble.
But the difference between the last housing bubble and the next one is that the banks want guarantees for the next one. It would not surprise me that once the banks get what they want from the right wingers in repeal, that they will abandon them once the need for a blanket government guarantee of loans is demanded.
After all, they abandoned Obama and the Democrats once they got what they wanted out of them. Now they are floating articles about how Obama hates Wall Street and about how Barney Frank passes gas and how the S & P didn’t attack the Tea Party.
And no, Maria Bartiromo, Jamie Dimon is not a rock star. Rock stars usually don’t advocate hurtful loans, although I suppose we could ask Ted Nugent if he supports the predatory lenders.
We need serious infrastructure projects. Certainly the jobs program of these Republicans: ponzi, hurtful, toxic loans, can’t be the only solution.