I wonder if our hero Pelosi will find this when her special task force gets to the bottom of things!
The Real Culprits In This Meltdown
By INVESTOR'S BUSINESS DAILY | Posted Monday, September 15, 2008 4:20 PM PT
Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it's dysfunctional, Democrats during the Clinton years are a prime reason for it.
Obama in a statement yesterday blamed the shocking new round of subprime-related bankruptcies on the free-market system, and specifically the "trickle-down" economics of the Bush administration, which he tried to gig opponent John McCain for wanting to extend.
But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory."
Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.
As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.
Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.
Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.
In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes in its accounting procedures and ways of managing risk.
But it was too little, too late. Raines had reportedly steered Fannie Mae business to subprime giant Countrywide Financial, which was saved from bankruptcy by Bank of America.
At the same time, the Clinton administration was pushing Fannie and her brother Freddie Mac to buy more mortgages from low-income households.
The Clinton-era corruption, combined with unprecedented catering to affordable-housing lobbyists, resulted in today's nationalization of both Fannie and Freddie, a move that is expected to cost taxpayers tens of billions of dollars.
And the worst is far from over. By the time it is, we'll all be paying for Clinton's social experiment, one that Obama hopes to trump with a whole new round of meddling in the housing and jobs markets. In fact, the social experiment Obama has planned could dwarf both the Great Society and New Deal in size and scope.
There's a political root cause to this mess that we ignore at our peril. If we blame the wrong culprits, we'll learn the wrong lessons. And taxpayers will be on the hook for even larger bailouts down the road.
But the government-can-do-no-wrong crowd just doesn't get it. They won't acknowledge the law of unintended consequences from well-meaning, if misguided, acts.
Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions.
While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge.
Market failure? Hardly. Once again, this crisis has government's fingerprints all over it.
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Well, there you go. It is absolutely shameful that the media and left will do its level best to keep this information from coming out, but it is absolutely true.
If the mortgage loans were paid, we wouldn't be in this mess. I don't know about you guys, but I buy stuff I know I canafford because I have first grade math skills and can subtract expenses from income.
I don't know about you guys, but I buy stuff I know I can afford because I have first grade math skills and can subtract expenses from income.
Too bad our illustrious President doesn't do that. With this fiasco, I think he's breezed right past Carter on the list of Worst Presidents of All Time. Too bad the article is so intent on pushing all blame onto the Clinton Administration which was in it's final year when Raines took over as Fannie Mae CEO. He was there another 4 years under Bush before having to take 'early retirement.'
Quote:
If the mortgage loans were paid, we wouldn't be in this mess.
Kinda hard to do that when your job has been 'globalized' and you can't get another job that will make the payment. But, the fools that signed up for those balloon mortgages to get more house than they could really afford, and/or took out big home equity loans have to share in the blame. Both are obvious ripoff opportunities for lenders and I always thought it would take a real idiot not to see that. Apparently, I underestimated how many idiots there really are.
"But, the fools that signed up for those balloon mortgages to get more house than they could really afford, and/or took out big home equity loans have to share in the blame. Both are obvious ripoff opportunities for lenders and I always thought it would take a real idiot not to see that. Apparently, I underestimated how many idiots there really are."
I echo that sentiment. The article admits that the market was fueled by greed and overleveraging, but the first dominoes to tip were defaults.
Sorry Arthur your way off the mark. fannie and freddie have been buying influence for years to keep them in business and not to correct their books. The top of the list happens to be Dodd. He controls the strings and has been in the fore front on blocking any and all new legislation.
Second, that's total BS about the globalization of the job market causing the problem. There are still many many good paying jobs out there. Income has risen in America, household income has risen these last 8 years and in the last release by the IRS from decades of tracking idividual incomes, it's way up. More people hove moved up from the lower classes into the uppeer classes then ever before. They didn't get there by lowering the bar, they got there by making more money.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
Gee. I'd have never been able to guess you, of all people, would want to blame a Democrat for it.
You go up to Michigan and tell those folks there are plenty of good paying jobs. Lower class income has gone down and middle class income has gone flat over the past 10 years. Upper class incomes have increased by 9% over the same time period. (CNN/Money Magazine) The number of Americans without health insurance has risen by 2.2 million to 47 million. Inflation adjusted annual buying power has dropped by around $2000.
You really need to stop getting all your info from Murdoch controlled sources. Or are you just making stuff up as you go along? Your 'facts' are getting more worthless every time you post. In fact, I think I'll just block you so I don't have to waste my time with you any more. Consider it done.
You go up to Michigan and tell those folks there are plenty of good paying jobs. Lower class income has gone down and middle class income has gone flat over the past 10 years. Upper class incomes have increased by 9% over the same time period. (CNN/Money Magazine) The number of Americans without health insurance has risen by 2.2 million to 47 million. Inflation adjusted annual buying power has dropped by around $2000.
Arthur, you need to look into Michigan politics. Michigan has been controled locally by the Democrats for years. They see a budget shortfall and what do they want to do? Raise taxes. They are the poster child for want not to do when the state needs revenue. You would have thought they already learned that lesson however, just this year they attempted to do it again.
I know your new to this forum so let me introduce you to my individual solution. MOVE!!!! That is exactly what the founding fathers wanted people to do when they found the individual states didn't meet the needs of it's people. They would vote by foot and move. Unfortunately today, to many people expect a job and a set standard of living. Heck it's easier to rob someone else for money then it is to earn it. How much easier does it get if all I have to do is show up every couple of years and pull a lever. I'm not responsible and don't have to go to jail for stealing. All I have to do is vote for the one who promises to use the power of government to steal my neighbors money and give it to me. No risk involved because should I loose this election, I will just complain because I'm not given your fair share.
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John Adams “The moment the idea is admitted into society that property is not as sacred as the laws of God, and that there is not a force of law and public justice to protect it, anarchy and tyranny commence.”
Ronald Reagan: 'Everybody that is for abortion has already been born'
"I never said I was worth it. I only said I wouldn't do it for less " William F. Buckley Jr.
The Real Cause of the Credit Crisis...
