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Santorum: High gas prices caused mortgage crisis, 2008 recession

Yeah, his mouth is beginning to catch up with him. His ten-point lead of a week ago is now gone, and Michigan, which looked to be in the bag for him, is now very much up for grabs. And why? Because people are actually listening to him now, and when they do, they conclude, like his home state did when they kicked him out of Congress, "That MF's crazy!"
 
Santorum has also stated that Satan has taken over some church (I think Protestant) and today his wife said that "God" has him on a "path" after being asked to explain how Santorum has such good poll numbers in Michigan, which is Romney's home state.

I wonder if she remembers Michele Bachmann, Herman Cain and Rick Perry each stating that "God" told each of them to run for President too.
 
I hate to defend Santorum.

I can't even tell you how much.

But though high gas prices did not CAUSE the mortgage meltdown and recession, they did help precipitate both.

When there is a marginal situation, where you are keeping the balls in the air but your business is close to failure, a change in the price of energy makes everything more expensive, and can cause enough business fall-off that you have to capitulate. I saw exactly this happen to several businesses.

And then people get laid off.

And they default.

And marginal banks fail.

And you get a snowball effect.
 
BenBurch said:
I hate to defend Santorum.

I can't even tell you how much.

But though high gas prices did not CAUSE the mortgage meltdown and recession, they did help precipitate both.

When there is a marginal situation, where you are keeping the balls in the air but your business is close to failure, a change in the price of energy makes everything more expensive, and can cause enough business fall-off that you have to capitulate. I saw exactly this happen to several businesses.

And then people get laid off.

And they default.

And marginal banks fail.

And you get a snowball effect.
Click to expand...
Shill. ;)
 
I'm just surprised he didn't blame birth control for causing the recession. He will, when he thinks of it.
 
Ben, you're just wrong about this one. Banks started in 1999 to loan out money as loans with 5 year balloon payments. Those loans should never have been made, but the banks had insured themselves with Credit Default Swaps. By the time the balloon payments came due, people who had taken out loans in the mistaken belief that their increased equity would pay for their refi simply defaulted. Banks were left with a massive default and immediately cashed in their CDSs.

Under this scenario, 2 buck gas wouldn't have made a bit of difference (well a bit) but the banks and their insurers like AIG were going down. They were holding trillions in junk loans, so how could it not end this way? The price of homes was artificially high and as long as the bubble expanded the system could go on but once it popped, it was lights out. Santorum is a liar, a fool, or both.
 
keale said:
Unprecedented levels of stupidity

http://www.latimes.com/news/politics/la-pn-rick-santorum-energy-gas-prices-20120227,0,5851109.story

"We went into a recession in 2008 because of gasoline prices. The bubble burst in housing because people couldn't pay their mortgages because we're looking at $4 a gallon gasoline," he said. "And look at what happened: economic decline."
Click to expand...

What the heck is he thinking?
Is he completely out of his mind?
Does he know what he is saying?
.
.
.
.
Happening in 2008, this couldn't possibly be Obama's fault.
 
SamWilkinson said:
Santorum has also stated that Satan has taken over some church (I think Protestant) and today his wife said that "God" has him on a "path" after being asked to explain how Santorum has such good poll numbers in Michigan, which is Romney's home state.

I wonder if she remembers Michele Bachmann, Herman Cain and Rick Perry each stating that "God" told each of them to run for President too.
Click to expand...

God is a waffler.
 
To be fair, Santorum is not the only one who has pinned high gas prices as the real culprit behind the recession. For example, Jeff Rubin, formerly the chief economist at CIBC World Markets, has also taken that view.
 
Except, of course, that the economy was already in free fall before gas prices even started rising.
 
Travis said:
Except, of course, that the economy was already in free fall before gas prices even started rising.
Click to expand...

Did the asteroid kill the dinosaurs, or was a mass extinction already in progress which it hastened?

Financial system collapse is almost always a string of bad events and bad choices. But remember the bad choices set you up for the bad events.
 
Travis said:
Except, of course, that the economy was already in free fall before gas prices even started rising.
Click to expand...


I don't think that's correct. As I recall oil prices soared in the summer of 2008, and economic growth slowed rapidly in the fall of that year. But I can be swayed by a chart which overlays the price of gasoline and economic growth on the same time scale.
 
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BenBurch said:
I hate to defend Santorum.

I can't even tell you how much.

But though high gas prices did not CAUSE the mortgage meltdown and recession, they did help precipitate both.

When there is a marginal situation, where you are keeping the balls in the air but your business is close to failure, a change in the price of energy makes everything more expensive, and can cause enough business fall-off that you have to capitulate. I saw exactly this happen to several businesses.

And then people get laid off.

And they default.

And marginal banks fail.

And you get a snowball effect.
Click to expand...

And with out it the bubble would have grown more and its popping would be worse.
 
Corsair 115 said:
To be fair, Santorum is not the only one who has pinned high gas prices as the real culprit behind the recession. For example, Jeff Rubin, formerly the chief economist at CIBC World Markets, has also taken that view.
Click to expand...

High gas prices --> people contract their spending --> recession occurs --> people lose their jobs --> people lose their houses.

Maybe. But what about people who didn't lose their jobs and had just gotten loans they couldn't handle because the bank's employees weren't doing their jobs in the analysis?

Or the banks that turned around and also lent them credit cards, then, after $15,000 was run up on them, decided the guy was a risk so jammed his interest rate to 35% even though he had never missed a payment, and now had no way to save money for the property tax coming up?



This is why those banks should have failed and not been bailed out.
 
Corsair 115 said:
I don't think that's correct. As I recall oil prices soared in the summer of 2008, and economic growth slowed rapidly in the fall of that year. But I can be swayed by a chart which overlays the price of gasoline and economic growth on the same time scale.
Click to expand...

Well, around here everything went to crap economically in early 2007. But gas prices remained stable until mid 2008. When gas prices crept north of $3 a gallon we already had a 17% unemployment rate (currently we are hovering around a 22% unemployment rate which is down from our high of 26%).

It probably varied a bit regionally.
 
SamWilkinson said:
Santorum has also stated that Satan has taken over some church (I think Protestant) and today his wife said that "God" has him on a "path" after being asked to explain how Santorum has such good poll numbers in Michigan, which is Romney's home state.

I wonder if she remembers Michele Bachmann, Herman Cain and Rick Perry each stating that "God" told each of them to run for President too.
Click to expand...

That Jehovah, what a rascal. He's always good for tricks like that.
 
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