Ron Paul Questions Jim Carr of the National Community Reinvestment Coalition




Venue: House Financial Services Subcommittee on Domestic Monetary Policy and Technology
Hearing: Regulatory Restructuring: Safeguarding Consumer Protection and the Role of the Federal Reserve
Date: 7/16/2009
Jim Carr’s complete testimony (pdf)

Ron Paul: Thank you, Mr. Chairman. I have a question for Mr. Carr on how optimistic he might be about what we’re trying to do. I tend towards pessimism at times, and I think the problem is almost bigger than what we’re dealing with here and we’re just dealing on the edge of the basic problem.

So the system that we’ve had has been around a long time. We’ve had a system that some people referred to as capitalism that was unregulated. I happen to think that it doesn’t have much to do with capitalism. It has to do with corporatism where corporations seem to get the benefits of some of the programs that are designed to help the poor.

We have multiple programs that has been going on for a long time designed to help the poor and yet sometimes I think that is so superficial. The poor seems to become more numerous and poor and especially since the crisis has hit, but it’s always on the pretense to help the poor, and yet the corporations tend to make the money. So they make the money and they have the power and they have the insight with some of our financial institutions including the Federal Reserve and whereas bubble forms, they benefit and nobody complains too much if it seems to satisfy a lot of people.

But when the bust comes, then we have a bailout, but who is the bailout served? Do we immediately go out and bail out the people that we tried to get houses for? No, we immediately go and bail out the system. So the system is so deeply flawed, so they make money when the bubble is being formed and they get bailed out when the bubble bursts that we come along with a new system that we hope will work.

But the housing program, for instance, we want houses for the poor people, but developers make a lot of money. Builders make a lot of money. Mortgage companies make a lot of money. The banks make a lot of money and all of a sudden, the system didn’t work very well and the poor get wiped out and they lose their houses.

So if we don’t address that major problem, the structure of the system, this corporatism, which has invaded us, how can this idea that, “Well, we’ll regulate a little bit in order to protect the consumer.”

So, I guess, I’m rather cynical and I want you to tell me whether you share any of that concern, whether my cynicism sometimes is justified or not.

Jim Carr: Congressman, I appreciate the question because I agree with much of what you just said. One of the problems that we have in this country is that we have the financial system operating on one side of the ledger and we have special programs for the poor on the other.

The way the poor became solid middle class in this country was by having a financial system that built their wealth and public policies working with that financial system coming largely out of the Great Depression that built the vast majority of our middle class. We do not have that now. Instead we have a banking system that looks at consumers and says, “How can we exploit them?”

And that is problematic. And until we change that system such that when a bank and a financial institution is reaching to a consumer specifically to promote the economic mobility of that consumer and build their wealth, if that’s not their goal, if that’s not what’s going to be accomplished by their products, the poor will remain poor and all the federal subsidies in the world won’t help them. That is why it’s so critical to put into place an agency that actually combines the knowledge, the collective wisdom of people who understand the banking system, the financial system, and understand it as their mission to promote the economic mobility of this country.

Because once they’re working together, there will be no conflicts of promoting wealth and stability within working families with safety and soundness from the financial system, and then, Congressman, the other programs that you’ve talked about that had failed so miserably so often, those programs will now have a foundation by which they can actually enhance what’s happening. But if the markets don’t work for the general public, poverty will never be resolved.

Ron Paul: One other quick question. Would you have any objection personally to us knowing more about what’s going on at the Federal Reserve and have an audit of the Federal Reserve?

Jim Carr: I’m not familiar with the Federal Reserve audit. Okay?



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30 Comments:

  1. Pollsters, Put Ron Paul In!!
    http://politics.theatlantic.com/2009/07/pollsters_put_ron_paul_in.php

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  2. What is missing from this 2012 Election Poll?
    http://www.rasmussenreports.com/public_content/politics/elections2/election_2012/2012_match_ups_obama_romney_tied_at_45_obama_48_palin_42

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    • And this one?
      http://www.gallup.com/poll/121715/romney-edges-palin-huckabee-early-2012-gop-test.aspx

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      • Romney, the corporate guy. Perfect fit for the FED and the new world order. The FED elite want to run the world as if one gigantic corporation where the elite sit up top making all the calls while the rest of us work for them.

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  3. Audit Update
    http://www.youtube.com/watch?v=fbHI7vHms4k&feature=player_embedded

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    • Notice what pops up as 'Related Videos'

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      • Thanks for the link Louie. Wow, that really saddens me, to see the ever increasing corruption, attempts to control our minds, limit the availability of information and information sharing. The internet used by our government via youtube.

        We know one thing for sure from this. WE are on the right path of exposing the truth. We know they know it and they know we know it.

        It would be a wise choice for as many as possible to create blogs and websites, places for like-minds to stay connected, meet and exchange ideas and share information.

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  4. "The only way to become wealthy under Free Market Capitalism is to provide a product/service at the most competitive price."

    Or you could just take advantage of the free market system and pull the wool over people's eyes just long enough... (Chuck Prince, Stan O’Neal, Angelo Mozilo, John Thain, Richard Wagoner, Richard Fuld, Kerry Killinger, Alan Fishman, Daniel Mudd, Richard Syron, Jimmy Cayne, Michael Perry, Ken Thompson, et al… all become filthy rich by taking risks and not absorbing the losses.)

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  5. Ron Paul Q&A at House Financial Services Committee 7.16.2009

    1/3
    http://www.youtube.com/watch?v=-bibqOOS3oo

    2/3
    http://www.youtube.com/watch?v=U-9DM79snGI

    3/3
    http://www.youtube.com/watch?v=rZsozw1WSXk

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  6. Carr: "But if the markets don’t work for the general public, poverty will never be resolved."

    Carr, you ignorant slut. It's not up to any business entity to help anyone but itself. They do that by providing a product or service that the consumer wants in return for as much money as they can get. They are not charities! If you want to help poor people give them your money, not ours.

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    • Wow, unbelievable. Your philosophy IS the major flaw in our current financial crisis and it is pervasive throughout our financial system. May you never be a business owner in America!

      Greed is the main issue in all of our countries financial issues. The "more money" mantra has taken over the minds and hearts of those in charge our our financial stability...no matter what harm it does. Greed is what makes our current financial system corrupt.

      i.e. In the housing financial industry, most buyers cannot afford to pay cash for a home, so they need a loan, but when the loans programs are designed for consumer failure, they have failed to be an "American" product and service! Further, when the mortgages are bundled and sold as CDO with rating companies fudging the A-B-C ratings to investors and foreign countries knowing many of those mortgages will default, then the investment companies are no longer "American" companies.

      You see, American = the morals and values found in the constitution, bill of rights and the declaration of independence. When these values and morals are not used in business, in how we conduct ourselves in business, these companies do not meet the standards of companies in America and should immediately be made to cease and decist business in America.

      The fallout from the housing market in example above does not just affect the particular homeowner who defaults, it spreads to adversely affect the neighbors of the foreclosed home, the livelihood of builders, suppliers, home inspectors, real estate agents, appraisers, lenders, title, escrow, sellers, landscapers, painters, plumbers, roofers, brick layers, window companies, flooring companies, cabinet companies. This then affects the mortgages of all these folks because they are dependent upon their jobs (that do not exist) to pay their mortgages. So you see, your business philosophy is short-sited, selfish, self-centered and self-serving. Greed works for the elite only, but not for long.

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      • Greed didn't cause this financial crisis.

        Greed has been present since the dawn of humans. The free market automatically controls greed with risk. With market driven risk, and market driven interest rates, easy mortgage terms would NEVER of been available to the consumer. Investors would not risk it, banks would not risk it.

        The government took the risk away (Fannie and Freddie) and then forced banks to loan (CRA). Massive interference in the United States economy by the federal reserve and the federal government caused this crisis and every other financial crisis in American history, not greed.

        Financial crisis of 2007–2009
        more info: http://en.wikipedia.org/wiki/Financial_crisis_of_2007%E2%80%932009

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        • No one thing caused this Financial Crisis, absolutely greed was a component - greed to own a house (be it their first, second or just to flip it) by the consumer, greed to rake in fees initiating a mortgage, greed to sell them by packaging those crappy mortgages, greed to take that fat bonus creating a new product, greed to take in the commission selling those same structured products, greed in taking in insurance premiums 'insuring' those same structured products.

          I always thought this was a fairly accurate (and humourous) depiction of the web of greed that led to the subprime crisis:

          http://www.therealestatebloggers.com/2008/02/28/cdo-primer-or-how-the-subprime-mess-got-so-big/

          Yes, Fannie and Freddie did contribute, as did our government, the consumer, the Fed, free markets, etc... But you con't let greed off the hook that easily.

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          • Yes, I agree, greed is always there, always has been. It's just not the cause of this financial crisis.

            The free market limits greed through its natural risk, reward mechanisms. For instance:

            1. Banks want to take lots of risk so they can get rich fast.

            2. But in a totally free market, with no government guarantees, subsidies, or other types of interference, and no federal reserve to bail them out, they fear losing too much money, so they won't take too much risk.

            When the government interferes in the markets, forcing them to "help the people," those mechanisms no longer work. That's when normal greed and corruption, becomes rampant greed and corruption.

            Government interference is like getting AIDS, it destroys the free market immune system, letting greed and corruption run wild.

            The same can be said for unethical behavior. You can't stop it, but you can limit it with the free market mechanism of "lack of trust."

            But the government removed that mechanism. It gave guarantees, enacted regulations, and required certifications, giving people a false sense of security.

            "I don't have to worry about this mortgage broker (or stock broker), he's certified and regulated by the government. He couldn't deceive me, so I automatically trust him."

            Americans have become the the worlds easiest to dup. Just ask Madoff or the Prince of Nigeria.

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          • "1. Banks want to take lots of risk so they can get rich fast.

            2. But in a totally free market, with no government guarantees, subsidies, or other types of interference, and no federal reserve to bail them out, they fear losing too much money, so they won’t take too much risk."

            Problem with that outdated concept of compensation is, if the compensation scheme can be geared towards becoming filthy rich in (say) two years, what is this 'fear of losing too much money' you speak of? Opportunity cost?

            There is no clawback provision, so CEO's like Chuck Prince, Stan O'Neal, Angelo Mozilo, John Thain, Richard Wagoner, Richard Fuld, Kerry Killinger, Alan Fishman, Daniel Mudd, Richard Syron, Jimmy Cayne, Michael Perry, Ken Thompson, et al... all become filthy rich by taking risks and not absorbing the losses. And none of those companies were forced by the government to 'help the people' as you say, they were helping themselves.

            As Mr. Prince said "When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing," That wasn't government, that was greed, and an ousted Mr. Prince and an ousted executive team is sitting pretty these days while everyone else tries to pick up the pieces. What do they care, they have theirs.

            By the way, all of those companies basically imploded in one form or the other while the CEO's are surely sitting better than we are - and surely not caring what the government did with their failed company - i mean again why would you if you already got yours?

            Not sure how Madoff and Nigerian schemes work in with this, but those sure don't have any government guarantee, and people still invest in them... So maybe we are all suckers?

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          • Michael, these investment firms were not government guaranteed. Because of the extra risk, banks did not elaborate the leverage taken in on each subprime asset whenever they sold them. These bank created risky assets and sold them without detailed information. The banks passed the risk over to their consumers, or these investment firms. That was a HUGE problem..

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      • We can see that corporate bankers and greed have played a major role in our crisis. Why would we want to get rid of the governing fed and let these crony banks finally take over and gain all the powers and responsibility of the central bank?

        Instead of printing money to bail out the banks, we should just let them print the money themselves.. Real smart.

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      • The only way to become wealthy under Free Market Capitalism is to provide a product/service at the most competitive price.

        Market Forces will ensure that the price is fair.

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        • What is the alternative?

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          • How would corporate market(jedi) forces ensure low inflation? Why would banks want low inflation?

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          • The alternative to what?

            The Jedi Order controls inflation as they have since the dawn of the universe. They use mystical powers which our feeble minds can't even begin to comprehend.

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          • "The only way to become wealthy under Free Market Capitalism is to provide a product/service at the most competitive price."

            Is there some other way to become wealthy under some other system? besides quality which you left out.

            Don't you know that Jedi forces aren't real? So you think that the market place is obsolete to inflation. You have a lot to learn youngling.

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          • I thought businesses now compete with price and quality, what would be different in this very way about a "free-market economy?"

            Would not the same market "forces" apply to the wants and needs of consumers in all markets?

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          • I did leave out quality. I should have said "...provide the best product/service". Thanks.

            Indeed there are other ways to become wealthy under other systems. Take the Fascist/corporatist system we have right now as an example. There are plenty of firms on life support from the government, people use the government and the law(rather than free exchange) to take from others and enrich themselves. I'm sure you can think of plenty of examples. Have at it.

            "So you think the market place is obsolete to inflation" is
            unintelligible. The words simply do not make sense grouped in that way.

            In all seriousness, while "The Force" doesn't exist, market forces certainly do. Supply and demand are market forces. Best for government to get out of the way and to let them operate.

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          • hahaha! you should of said, "..provide the best product/service at the lowest cost."

            I'll correct mysef.. Do you think that inflation is obsolete in a free market economy?

            I really don't know which companies are receiving government subsidies, I thought you could provide an example.

            "The Jedi Order controls inflation as they have since the dawn of the universe."

            Are you trying to say from this quote that inflation can be controlled by the marketplace? Even though we have a market driven economic system of money. Oh wait, you don't know what that is because you don't understand credit or anything about our economy.

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  7. Did you notice his body language when you asked the audit question??, major nervousness and looking down, he is telling on himself, he is hiding something just like all of the other banking boys. More nonsense, trying to make us believe they are doing something to help the poor, hogwash.

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  8. Just cant stop my self to comment on your blog. Good post.

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