The carbon trading scheme that passed the House and is making its way to the Senate is a new derivatives market set up at the behest of Goldman Sachs and other major Wall Street financial firms. Out of curiosity, how did the last financial derivatives market turn out? And yes, it is also a regressive tax, (Who do you think is hurt most by higher energy bills?).

Like the title says:

Here’s a very interesting article in the New York Times from 1999. Steven Holmes discusses how Fannie Mae was reducing its lending standards and increasing the issuance of subprime loans. This was a big cause in our current financial crisis, however, back then, everyone thought it was just dandy:

As seen in Part 1, political terms, such as liberal, conservative or libertarian, are muddled enough. Unfortunately, political organizations, popular terms and ideologies have many of the same issues. The political parties in the United States have gone through whole sale shifts in political ideology. Republicans used to be the party of tariffs and protectionism, now they are avid free traders. Democrats were the party of slavery and Jim Crow, before becoming the party of Civil Rights and Affirmative Action.

Inflation was thus misinterpreted as wealth, leading American consumers to borrow more and more, especially against their overvalued homes. Total mortgage debt in the United States is now around 12.5 trillion, up from $1.5 trillion in 1980! Total household debt was around 50% of GDP in 1980 and is over 100% today. And the personal saving rate was around negative 1%, for most of the last decade.

…from what I have gathered, our current president believes we need to change a few things. Well, I agree with him. I thought President Bush was a disaster. Unfortunately, though, other than the ridiculous hero worship and cult of personality that Obama’s got going, it really doesn’t seem like much of anything is changing.

In eight years, Bill Clinton only increased the budget from 1.41 trillion to 1.86 trillion, a 32.2% increase which is notably not adjusted for inflation. As a percentage of GDP the budget fell from 21.4% to 18.5%. Under eight years of Bush the budget increased from 1.86 trillion to 3.11 trillion, an uncanny 66.8% increase.