Moon of Alabama Brecht quote
March 20, 2008

Radical Policy Solutions - Yes, but will they come?

Some thoughts on Prof. Roubini's important piece on the Need for Radical Policy Solutions to the Crisis published yesterday. (His site now requires subscription, so I'll quote liberally with bold added.)

It is now clear that the US and global financial markets are experiencing their worst financial crisis since the Great Depression. And in spite of desperate and radical actions by the Fed this crisis is getting worse.

The Fed took extreme action by now lending not only to Fed-regulated banks, but also to unregulated financial institutions and by taking assets (mortgage backed securities - MBS) of dubious value as collateral.

We saw a bailout of Bear Stearns and a gift for JP Morgan as the Fed accepted to carry the risk for $30 billion of Bear Stearns bad assets. This move was similar to actions taken in Japan in the 1990s that led to 10+ years of economic problems.

But despite the Fed's action, says Roubini, all numbers show that the credit-market situation is getting worse and will have severe consequences:

[W]ith [interest] spreads [between treasuries and] even “safe” AAA agency and private label debt and MBS being so wide expect another round of massive writedowns that will lead to the bankruptcies of a wide range of leveraged institutions (hedge funds, broker dealers and other members of the shadow financial system).

Today we are facing a massive margin call on highly leveraged US capital markets and a massive de-leveraging of the financial system following fire sales of marked to market assets in vastly illiquid money markets, credit markets and derivatives markets.

Two weeks ago I explained the De-leveraging Spiral phenomenon in some detail.

There is a run on the 'shadow' financial system, i.e. the unregulated brokers, hedge funds, etc., that will wipe out most of these and some of the regulated institutions too. This run has only barely started.

The lack of trust of financial institutions in their counterparties is surging in spite of all the Fed actions as panic is setting in money markets and credit markets.

Now what to do? The reaction to the Fed's provisions has proven beyond doubt that the Fed is incapibale of stopping this. What is urgently needed is political/policy action. Without it, the meltdown will overshoot. Prices of all financial assets and houses would sink far below their real value and the financial destruction would have even more very severe social consequences then those that are already in the making.

[T]he piecemeal approach to crisis management taken by the Fed, the Treasury and other financial authorities is going to fail miserably. A severe recession and a severe financial crisis cannot be avoided at this point. Only much more radical government action will limit the financial meltdown and start to put a floor on the financial markets collapse. This government intervention would not be aimed to prevent the necessary adjustment of asset prices; it would be aimed at ensuring that the necessary adjustment is not disorderly.

So Roubini calls for the inevitable takeover by the taxpayer, while urging to avoid moral hazard and punishing the guilty. There are three parts to this (underline in the original).

Such radical policy action includes a government plan to purchase – at a significant discount to minimize its fiscal cost – hundreds of billions of dollars – possibly trillions – of mortgages, effectively a nationalization of mortgages. Once purchased by the governments at a significantly discounted price these mortgages could be restructured to reduce their face value, reduce the interest rate on the mortgage and allow distressed but solvent borrowers to avoid foreclosure.
This plan also include a formal nationalization Fannie and Freddie as the ongoing farce of pretending that these insolvent institutions are private sector firms is being revealed: [...] if these bankrupt institutions need to be used for public policy purposes – as they may need to – let us formally nationalize Fannie and Freddie – and put transparently on the public sector balance sheet the costs of bailing out the mortgage market.

This plan would also include the closing and/or nationalization of banks and other systemically important financial institutions that will fail in droves during the current financial crisis (they can then be privatized again after proper restructuring as many countries did after their banking crises). Again moral hazard distortions can be minimized by wiping out 100% the shareholders in these institutions and firing – with no sweet severance packages - all the reckless senior management that created this mess.

A agree with Roubini. The government takeover is unavoidable and if it doesn't happen now, it will happen later with much more severe consequences.

It should be pointed out that such a move would increase the federal debt of the U.S., currently at some $9+ trillion, by several trillion dollars. I still have to think through the international financial and political consequences of this. They will likely be very severe.

Roubini closes:

A market solution to this crisis does not exist; those who believe in such markets solutions are deluding themselves as markets left alone will melt down and enter into the mother of all meltdowns, margin calls, cascading collapse of asset prices, massive credit crunch and liquidity seizure and severe economic recession.

Of course the price adjustment in overpriced asset prices should not and cannot be avoided: home prices will have to fall at least 30%; equities will need to sharply correct in a bear market; risk spreads will have to widen sharply; many institutions will go bankrupt as they should. But what we risk today is a systemic financial meltdown where negative feedback loops lead asset prices to collapse much more than justified even by the much lower fundamental value of such assets.

We are facing now the risk of the mother of all financial crises and meltdowns. Moral hazard can be realistically address by wiping out reckless investors and lenders, having the government buying assets that need to be restructured at low prices closer to their fundamental value and limiting the mortgage debt reduction to truly deserving borrowers who were victims of predatory lending practices.  But radical and coherent policy action needs to be taken urgently and without further delay as there is now the risk that the US will experience its most severe recession in decades and that the US and global financial system may melt down.

I completely agree. The nationalization, which must include significant 'haircuts' for everyone involved, should happen immediately.

But it will likely not happen anytime soon.

The political constellation does not allow for such a huge nationalization project. Bush and most Republicans in congress will not agree to it. It will take another year until a new president settles in. Then the government takeover of the system will come. But by then the crisis will be so deep, that even nationalization will not help much.

Therefore the "worst financial crisis since the Great Depression" may well become worse than the Great Depression.

Let's all hope that I am too pessimistic here.

Posted by b on March 20, 2008 at 18:40 UTC | Permalink


Roubini sees the disappearance of the State, something that was forecast quite a while ago. He is still under the impression that there is such a thing as property, but property disappeared a long while ago when mortgages at 30 years prevailed and cars could be financed until they rusted into oblivion. We are going through a period of revelation , I mean a period in which what seemed to be mine belongs to all and what seemed to belong to all belongs to me. The genius of capitalism has been to erase all difference, children are treated as adults and adults as children, men and women are considered to be the same, holy days and workdays have fused into perpetual purchasing, languages disappear subsumed into English, borders of nations fade away not without resistance from those still set in ancient modes of thought and feeling. The world "collapse" is meaningless, there is a transition some people will adapt and we will know they adapted because they created a new system of thought and behavior and thereby persisted. Everybody will be entitled to health care and education and vacation and that will not be called socialism but something like a "post capitalist paradigm". There is no interest in China for the destruction of the USA and viceversa. Now the FED is going to consider brokers as if they were bankers,a demonstration of the deletion of differences, they will also accept any kind of collateral demonstrating again that good credit and bad credit are identical in post capitalistic conditions and so on. I am not making this thing up, I read the Internet that is all.

Posted by: jlcg | Mar 20 2008 20:32 utc | 1


A truly jaw-dropping post. I just wish the kind of bold action you outlined above was possible, but you are O so correct that any action other than Bernake shoving billions out the discount window is not likely to happen any time soon.

Posted by: Lizard | Mar 20 2008 22:24 utc | 2

The current people at the helm of the government are so incompetent I fear they would only make things much worse.

Posted by: mikefromtexas | Mar 20 2008 23:39 utc | 3

I fear they are incompetent mostly because their real expertise is in brazening out robbery while claiming they are just "helping you invest".

Posted by: citizen | Mar 21 2008 0:09 utc | 4

I hope you're right, because that's what it will take to stop the country's authoritarian drift - or at least mute the worldwide effects if it can't be stopped.

Posted by: ...---... | Mar 21 2008 0:13 utc | 5

We all know who is going to pay for this:

Equities? They liked it, finishing up over 400 on the Dow, with no small part of it, I suspect, being Pimco and others ranting that The Fed will buy Mortgage securities.

In a word - bull! That is explicitly ILLEGAL folks. Against the law. Barred by The Federal Reserve Act. For that to happen there would have to be a bill introduced into Congress, pass both House and Senate, and be signed by The President.

Just read his latest post. As long as there are still lots of suckers out there the bankers will stay in business. Bear Stearns went down but the executives will be kept on. The old boys club will still stand. Lots of electrons will disappear (the magic money created in diversived investment products) but the people will pay. When the TV tells them to buy they will.

Posted by: Sam | Mar 21 2008 0:27 utc | 6

Today an emergency Treasury Department (Office of the Comptroller of the Currency or OCC) rule was published that essentially allows certain national banks to exceed the established limits on lending to any one entity.

"Description of the Interim Final Rule
The interim final rule adds a new
§ 32.8 that permits an eligible bank,2
with the written approval of the OCC, to
make loans and extensions of credit to
one borrower subject to a special
temporary lending limit established by
the OCC, where the OCC determines
that such loans and extensions of credit
are essential to address an emergency
situation (such as critical financial
markets stability), will be of short
duration, will be reduced in amount in
a timeframe and manner acceptable to
the OCC, and do not present
unacceptable risk. In granting approval
for such a special temporary lending
limit, the OCC will impose supervisory
oversight and reporting measures that it
determines are appropriate to monitor
compliance with the standards
contained in new § 32.8. The § 32.8
special temporary lending limit is in
addition to the amount a national bank
may lend to one borrower under § 32.3,
i.e., the combined general lending limit
and applicable exceptions."

Maybe this is just being rushed out to retroactively make legal the JP Morgan acquisition of Bear Stearns engineered last weekend, or maybe to get out in front of the approaching tidal wave. If the latter, doesn't seem like the Treasury is looking at radical solutions - just more of the same.

Posted by: Maxcrat | Mar 21 2008 0:28 utc | 7

Actually, with a clever leader who really knows what he's doing, Roubini's plan has the potential to begin the true systemic revolution that is sorely needed.
I mean, with millions of foreclosures and evictions, banks have plenty of properties they own. Banks that'll be nationalised. Add to that a truly massive pile of mortgages, many going down the drain. So, when you've nationalised all this, the "nation" is basically in possession of a very sizable portion of the whole national territory.
The next step is obvious, and tantamount to heresy for all the "property is sacred" capitalist and libertarian crowd: let nationalise the whole fucking land and do away with the whole housing market and all the related speculation.

And I don't see where you're pessimistic, B. Frankly, the whole financial system has to go down in a way or another, if mankind is to survive. Sure, many will suffer, but then, who here really expected everyone to be able to live happily through the coming catastrophe, who, deep down, expected things to be able to change nicely and mankind to enter a new golden age without paying the price of millennia of madness?

Posted by: CluelessJoe | Mar 21 2008 1:36 utc | 8

A market solution to this crisis does not exist. A market solution to this crisis does not exist. A market solution to this crisis does not exist.

ding ding ding... we have a winner.

Besides, wasn't "usury," a sin at one time?

I predict, the Office of Faith-Based Initiatives receives a $2.5 billion grant to solve the subprime mortgage crisis. The money will be earmarked to offer prayers for those who lost their homes to foreclosure, welcoming them into the Lord's house. Thereby, the protestant work ethic will be used to bring back debtors prison for those of whom should wash themselves of the sin of laziness, whether they want to or not. Praise Allah!

"Prediction is very difficult, especially about the future."
—Niels Bohr (1885-1962)

Posted by: Uncle $cam | Mar 21 2008 2:15 utc | 9

It seems to me that to attribute our present problems to some kind of malice of bankers or brokers is to look for scapegoats without actually solving a problem. Bankers want to save their jobs and their livelihood exactly for the same reason that people that have a sick child want him cured or want their obstructed coronary bypassed, or their broken femur set. We, all of us want to survive and we do what we think is necessary to achieve it. The forms that takes that attempt at survival characterizes a society and it is the development of society that changes the economy and then the economy forces an evolution of financing. There is no morality involved in any of this, the pressure of survival forces all of us. In a capitalist system the necessity of showing a profit forces the hand of everyone from the multimillionaires to the janitors. the millionaires may cheat in their financial activities and the janitor may cheat by being a slacker. If one wants to solve this problem based on morality an attitude like Savonarola's is necessary and we know what happened to that friar. We are in a universal pickle, nobody is exempt from blame.

Posted by: jlcg | Mar 21 2008 2:50 utc | 10

U$, sarcasm is one response, but CJ's revolution won't happen here.

Maxcrat is sniffing up the right tree. BSC:JPM is the crack in the
dam, the opening of the flood gates. The SEC never quite caught up
with the ClinTones, after they allowed banks to be investment brokers
and investment brokers to be bank-and-trusts. So there are simply no
SEC regulation in place for investment brokers and mortgage lenders,
and any drag or inertia there might have been, was greased by Bush.Con,
a wooden spike driven into it's heart by the outing of Elliot Spitzer.

It's the Wild West on Wall Street...

Now comes the Fed and opens the credit window, allowing any investment
broker to borrow credit (in real $ terms, for free), and use that credit
to, oh, churn and burn a mutual fund, cut off a stock rally or squeeze
a short, cover positions, run up opposite positions to their investors,
just about anything you can imagine, Plunge Protection Team privatized.

Doot, doot, dootilly doot-doot ... Getcha free credit heah, hurry, hurry!!
Any day now, a Blackwater Investment Group, or a Carlyle Bank and Trust.

As a result, The Beast will belch out soot and subprime confetti, then
up and up rebound the price of houses, with them, those 15% fees and taxes
we have to pay, plus interest on the mortgage, 30, 40, even 50 year terms.
Face it, we are only one or two points away from wage- and credit-slavery.

Along with pumping up housing again, comes refi bleed-out, taking your
equity back out and gambling on alpha momentum in commodities. Steel is
going up +12% per month, due to Dubai/Beijing demand, but also
due to momentum chasers and US$ T-bond maturity roll-overs. Not just the
precious metals, not just construction materials, not just gas and oil.

The folks in Iraq, Afghanistan and Pakistan that supported Bush.Con's
attempt to corner the oil market by destroying excess supply (Hunt Bros)
are seeing the cost of their food supplies doubled, in just five years.

With Fed floodgates opened, with spring floods in the MidWest, tariffs
on Brazilian ethanol, and sharply growing demand for corn supplies, by
next winter, I wouldn't be surprised to see food grains 300% over 2005.
Wheat especially. Wheat supplies could drop -20% below survival levels.

We, all of US with 401(k)'s, are starving millions of people to death,
to save our precious Dow, our measly pension, and boost USA Uber Alles.
Our children will inherit sackcloth and ashes. King Midas done drowned
in his g-ddamn gold-plated hot tub, and turned US into greasy gree-gree.

"It's simple. Relax. Go to sleep. You won't feel anything. You'll be happy."

Posted by: Black Bear | Mar 21 2008 5:10 utc | 11


There is no morality involved in any of this, the pressure of survival forces all of us. In a capitalist system the necessity of showing a profit forces the hand of everyone from the multimillionaires to the janitors.

There used to be morality. It's called regulation. Ever heard of Glass Steagall? A system with no rules and insider info produces a stacked deck:

The free for all of no regulation or oversight was beleived to be the cause of the Great Depression and thus the very reason for enacting the regulations in the aftermath. Worked pretty good for a lot of years until the the regulations were removed and here we are again. A lot of people are being hurt and a lot more are going to join them before this is over. There are a lot of ARM resets coming due this year and we all know how that's been working out:

But like Slothrop used to say; what Wall Street wants Wall Street gets. They aren't going to be the ones struggling to put food on the table. A lot of the money being poured into equities right now are from pension funds and 401Ks on the advise of Wall Street(treasury rates are below inflation so you got to invest here).

Look at all the money being poured into VISA right now on their new IPO. They are just a clerical office owned by the banks and have no ownership of the loans, just performing the administration, so how can they benefit from the increase in spreads? This is like investing in a secretary. The only way the investment can be profitable is if the boss increases the pay.

Posted by: Sam | Mar 21 2008 5:11 utc | 12

@jlcg: somewhere a while back, I remember reading an essay (can't remember where) that proposed that autoimmune diseases like AIDS were emblematic of our age, because those diseases have to do with confusion of boundaries. Just as cancer, unlimited growth, was the emblematic disease of the age of robber barons and unlimited growth. That essay and your post at #1 remind me of William Thompson Irwin's riffs on mythological language that works on many levels simultaneously.

Posted by: catlady | Mar 21 2008 5:20 utc | 13

A bit late to recognize this ...
The Great Unwind has begun, Citigroup warns

"We are now confronted by a broad bloodbath in the credit markets," Citigroup said. " The most leveraged paper is falling in value because it is leveraged, and now the least leveraged paper is also falling in value because it is owned by leveraged investors."
Leveraged economies, like the U.S., should also be avoided, in favor of emerging market countries, which have reduced borrowing, the bank advised.
With less capital sloshing around the world, and the dollar falling, the U.S. may have to compete more to finance its deficits.

"The U.S. shows up as the world's greatest consumer of external capital," Citi noted. So it "has the most to lose as this capital becomes less freely available."

Posted by: b | Mar 21 2008 7:31 utc | 14

In fact there is a free market solution, its just a rather painful one. First off, it has to be a free market for everyone and not a rigged market for the banks. Eliminate this "lender of last resort" nonsense. Announce that the Fed and the government will bail out no one. Absolutely no one; neither bank nor borrower. After a week, the Dow should settle in the 3-5000 range. Very painful, but that's all its worth, really...maybe less. Banks will go bankrupt. Those in need of cash will have no choice but to come to some agreement with homeowners...asking them to pay what ever they can. 20 cents on the dollar at 2% will seem very generous. FDIC will disburse whatever funds are available. Again, it may be 10-20 cents on the dollar.

Then start over. This time, no central bank, and use real money (gold, silver) and eliminate the sham of fractional reserve banking.

Make no mistake. It will be miserable. But worse things have happened. If Germany can rebuild after WWII, the U.S. will survive after the banking meltdown and 2nd depression. Perhaps some overseas possessions will be lost, but that's all to the good, isn't it.

Posted by: Lysander | Mar 21 2008 7:47 utc | 15


Partying Like It’s 1929

Posted by: Sam | Mar 21 2008 7:58 utc | 16

Maybe some missed the memo?... Of course, that was long ago, though not much has changed.

"The American way of life is not negotiable"

Posted by: Uncle $cam | Mar 21 2008 8:51 utc | 17

Remember Ronald Reagan's quote that the scariest phrase in the English language is "I'm from the government and I'm here to help you"?

How about "I'm from the Federal Reserve and I'm here to bail out your economy"?

I am for the Great Spiritualization of all property: real estate is to be returned to the Great Spirit, citizens will be allowed to lease rights to sections of land as long as they tend it and do not abuse it to others' disadvantage.

Instead of Fannie Mae, we will have Winnie Tou, the dollar will be pegged to the value of beads, shells and buckskins, and White people will be restricted - as originally agreed - to a strip of land one day's walk from the coastline.

Posted by: ralphieboy | Mar 21 2008 8:59 utc | 18


Partying Like It’s 1929

Posted by: | Mar 21 2008 9:00 utc | 19

I think some here believe in the military meta-narrative, that all these things are disconnected, compartmentalized issues, you think, water, the environment, gold, oil, commodities, metals, stocks, trading, housing, real estate, utilities, currency, usury, aren't part of a tapestry? A rug that can be pulled out from under your savings? A table cloth with out the dishes crashing the floor? The invisible hand of the magic free market will pull a rabbit out of the hat and excliam, "show over"?

Had Bear Sterns been forced into bankruptcy, the executives would have had to return their bonuses.

You can Bank on it...

Posted by: Uncle $cam | Mar 21 2008 11:13 utc | 20

Social unrest?

Hundreds seeking housing money overwhelm Boca Authority

BOCA RATON — A crowd of more than 500 people waiting for hours this morning for housing voucher applications were dispersed by police in riot gear at the Boca Raton Housing Authority when the applications ran out sooner than expected.

The action prompted complaints that officers used excessive tactics and housing authority officials were incompetent in their planning.

Two people were arrested and six to eight people hospitalized for exhaustion during the ordeal.

Hundreds of people, mostly mothers who had spent more than eight hours in line, were forced to leave the property at 2333 W. Glades Road by 30 Boca Raton Police officers, including SWAT team members, who walked toward the crowd in unison holding their police shields up about 10:30 a.m.

"Leave or face arrest," police officers shouted at the crowd as they urged them out of the housing authority parking lot. People were made to leave the vicinity altogether, with officers forcing them to cross the street and move toward their cars.
Police had been at the housing authority since about midnight, a few hours after people started lining up outside for Section 8 housing voucher applications.

Some people lay down blankets and pillows to camp out until 9 a.m., when the housing authority had advertised they would hand out applications.
People grew agitated. Several fights broke out. Police and firefighters said they were prepared if things were to turn violent on a large scale. Nearly 50 firefighters and paramedics from the city, county and Delray Beach set up across the street in the Town Center mall parking lot.

Then an official came out of the housing authority building and announced through a megaphone that disabled people should come forward.

Instead, the entire crowd surged forward. People fell down and were close to being trampled, witnesses said.

"That's when all hell broke loose," said Shannon Pierce, 26, of Lake Worth. Pierce, who is six months pregnant and had been waiting in line since 6 a.m. "We almost got trampled over."

Authorities decided to shut things down.

Police told the crowd they had to leave. Angry and disappointed, many of those waiting stalked off.

Those who remained were soon dispersed by police in riot gear, many shouting and complaining.

Posted by: b | Mar 21 2008 11:17 utc | 21

Barings redux?

Posted by: Uncle $cam | Mar 21 2008 11:20 utc | 22

Foreign Investors Systematically Dumping US Treasuries

As feared, foreign bond holders have begun to exercise a collective vote of no confidence in the devaluation policies of the US government. The Federal Reserve faces a potential veto of its rescue measures. Asian, Mid East and European investors stood aside at last week ’s auction of 10-year US Treasury notes. “It was a disaster,” said Ray

From a commenter:

"Feel free to thank Nixon for taking the U.S. off of the Gold Standard and the treasonous Republicrats for decades of systematically selling America down the river."

Posted by: Uncle $cam | Mar 21 2008 12:48 utc | 23,_1932>"Until 1932, the Republicans had controlled the Presidency for 56 of the previous 72 years, dating to Abraham Lincoln's election in 1860. After 1932, the Democrats would control the Presidency for 28 of the next 36 years, until the 1968 presidential election created a new alignment which favored the Republicans."

Since 1968, Republicans have held the Presidency 27 out of 39yrs, Democrats 12 yrs.

Does anyone have numbers on control of Congress during this period?

Same party control of Congress and Presidency may lay the foundation for the most unrestricted government spending and the initiation of larger scale wars.

Posted by: small coke | Mar 21 2008 15:58 utc | 24

One can't help but appreciate the spin on articles like this.

Headline: Commodities Drop, Rally in Dollar, Stocks Vindicate Bernanke

However the actual article is much less certain and its entire premise seems to be based solely on Thursday's trading. As I've said before, wishing something were true doesn't make it so. I read an awful lot of wishing in financial articles these days.

Posted by: Chemmett | Mar 21 2008 19:04 utc | 25

@Chemmett - saw that piece this morning - it is an aweful stupid laudation for Bernanke's dumb moves.

The recent commodity dump, which is simply deleveraging by speculative hedgefunds, was predicted by Marc Faber two weeks ago

Faber says he sees far fewer investment opportunities, and he is urging caution.

Stocks in China and India could fall 30 per cent to 40 per cent on top of recent drops, he warns.

Bonds could tumble in value along with metals and real estate.

"All commodities, in my opinion, are vulnerable to a correction," Faber warned in a telephone interview with the Toronto Star this week.

"I would say that anyone who cannot tolerate a correction of 20 per cent should not be in anything."

Still, Faber remains a long-term gold bull. With prices nearing $1,000 (U.S.) an ounce this week, gold has risen so high in price he says some other bullion lovers he knows have already returned to cash. He has not. He thinks the metal could pass $3,000 an ounce, if only temporarily, like in the spike of the early 1980s. But the price could also fall sharply first.

It is a correction, caused by people (hedgies) who are over-leveraged and have to sell whatever they have to stay solvent. The principle production-demand imbalence still exists and will continue to exist. Commodity prices will therefore rise again soon, while stocks are in for a reality check that points downward for a long time.

Well, those are my 2c I act on in my personal accounts. Not something others should follow.

Posted by: b | Mar 21 2008 20:29 utc | 26

Y'all might want to listen to yesterday's interview w/Fitts. She notes that value of dollar & commodities are going in reverse direction than one expects, so she speculates that there are behing the scenes deals being made now.

Posted by: jj | Mar 21 2008 21:53 utc | 27 once agian exposes the story behind the story: The Assassination of New York Governor Eliot Spitzer

Posted by: Uncle $cam | Mar 22 2008 0:59 utc | 28

Where on earth, hell, where in the universe is the US government going to find a trillion+ dollars to nationalise the banks?

Posted by: swio | Mar 22 2008 13:12 utc | 29

small coke asks:

Does anyone have numbers on control of Congress during this period?

If you go here and here you'll see from the list of House Speakers and Senate Majority Leaders that following President Nixon's election in 1968:

Democrats controlled the House from January 3, 1969 until January 4, 1995 and from January 4, 2007 until the present.

Democrats controlled the Senate from January 3, 1969 until January 3, 1981; from January 3, 1987 until January 3, 1995; from January 3, 2001 until January 20, 2001 (when Vice-President Cheney took his oath of office and became the President of a Senate with 50 Democrats and 50 Republicans); from June 6, 2001 (when Sen. Jeffords changed his party affiliation from Republican to Independent) until January 3, 2003; and from January 3, 2007 until the present.

The Republicans, of course, were in control of the House and Senate whenever the Democrats were not in control.

Posted by: CMike | Mar 22 2008 22:02 utc | 30

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