Original URL: http://bamatone.livejournal.com/256088.html
Currently, you're seeing a lot of anti-Bush this and that regarding the financial crisis. And most of the finger pointing is being done by Congressional Democrats. I've about had enough of it.
Fact Number One: It was liberal Democrats, led by Senator Christopher Dodd and Congressman Barney Frank, who for years— including the present year— denied that Fannie Mae and Freddie Mac were taking big risks that could lead to a financial crisis.
It was Senator Dodd, Congressman Frank and other liberal Democrats who for years refused requests from the Bush administration to set up an agency to regulate Fannie Mae and Freddie Mac.
It was liberal Democrats, again led by Dodd and Frank, who for years pushed for Fannie Mae and Freddie Mac to go even further in promoting subprime mortgage loans, which are at the heart of today's financial crisis.
Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush's Secretary of the Treasury, five years ago.
Yet, today, what are we hearing? That it was the Bush administration "right-wing ideology" of "de-regulation" that set the stage for the financial crisis. Do facts matter?
We also hear that it is the free market that is to blame. But the facts show that it was the government that pressured financial institutions in general to lend to subprime borrowers, with such things as the Community Reinvestment Act and, later, threats of legal action by then Attorney General Janet Reno if the feds did not like the statistics on who was getting loans and who wasn't.
Is that the free market? Or do facts not matter?
Then there is the question of being against the "greed" of CEOs and for "the people." Franklin Raines made $90 million while he was head of Fannie Mae and mismanaging that institution into crisis.
Who in Congress defended Franklin Raines? Liberal Democrats, including Maxine Waters and the Congressional Black Caucus, at least one of whom referred to the "lynching" of Raines, as if it was racist to hold him to the same standard as white CEOs.
Even after he was deposed as head of Fannie Mae, Franklin Raines was consulted this year by the Obama campaign for his advice on housing!
The Washington Post criticized the McCain campaign for calling Raines an adviser to Obama, even though that fact was reported in the Washington Post itself on July 16th. The technicality and the spin here is that Raines is not officially listed as an adviser. But someone who advises is an adviser, whether or not his name appears on a letterhead.
The tie between Barack Obama and Franklin Raines is not all one-way. Obama has been the second-largest recipient of Fannie Mae's financial contributions, right after Senator Christopher Dodd. -- Thomas Sowell @ Jewish World Review
Here's the proof of Barney Frank's idiocy: http://www.peteholiday.com/2008/09/failed-economic-policies/
. For the record, Pete gets his data straight from the New York Times.
”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”
Then we have this bit here: "We also hear that it is the free market that is to blame. But the facts show that it was the government that pressured financial institutions in general to lend to subprime borrowers, with such things as the Community Reinvestment Act and, later, threats of legal action by then Attorney General Janet Reno if the feds did not like the statistics on who was getting loans and who wasn't."
The Community Reinvestment Act, first passed in 1977 under Jimmy Carter, was intended to increase minority homeownership. It grew out of charges that banks were "redlining" entire inner-city neighborhoods as bad credit risks. Banks now were forced to perform outreach to these areas.
In the '70s and '80s, banks could show that they were trying to do that by advertising in minority newspapers and having representatives sit on the boards of local groups. In other words, they were rated on the effort made and not on the results achieved. Creditworthiness still mattered.
In 1995, as Howard Husock pointed out eight years ago in City Journal, "the Clinton Treasury Department's 1995 regulations made getting a satisfactory CRA rating much harder. The new regulations de-emphasized subjective assessment measures in favor of strictly numerical ones. Bank examiners would use federal home-loan data, broken down by neighborhood, income group, and race, to rate banks on performance."
Creditworthiness and due diligence no longer mattered. As a 1999 New York Times editorial observed: "Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Bill Clinton administration to expand mortgage loans among low- and moderate-income people and felt pressure to maintain its phenomenal growth in profits."
On Frank's and Clinton's watch, the Community Reinvestment Act was changed to force the issuance of bad loans. Banks would be rated on the number of loans, not on their soundness. Fannie Mae and Freddie Mac were then encouraged to buy them up. It was all about affordable housing, even if the housing was unaffordable.
In the vice presidential debate, Sen. Joe Biden said that "what we should be doing now — and Barack Obama and I support it — we should be allowing bankruptcy courts to be able to re-adjust not just the interest rate you're paying on your mortgage to be able to stay in your home, but be able to adjust the principal that you owe, the principal you owe."
To get this bill passed, Obama made a lot of phone calls — particularly to members of the Congressional Black Caucus, including caucus chief Rep. James Clyburn — assuring this would happen.
Those paying their mortgages on time don't get that break.
Rep. Elijah Cummings said Obama told him that, if elected president, he would direct a Treasury Department official to work with homeowners in foreclosure to restructure their loans. Cummings said Obama also told him he'd seek changes in bankruptcy laws allowing judges to reduce what borrowers owe on their home loans.
Section 110 of the rescue legislation has the Orwellian title of "Assistance to Homeowners" — but only for the deadbeats.
It describes somebody called a "Federal property manager" who "holds, owns or controls mortgages, mortgage-backed securities, and other assets secured by residential real estate."
Section 110 speaks of "modifications" that this manager can make to these mortgages including not only the reduction of interest rates but the reduction of loan principal.
Not only is Uncle Sam now the world's largest landlord. He can also arbitrarily set the value of property and the amount owed on it at will, thus distorting the free market.
The vast majority of homeowners who pay their mortgages on time get the shaft. They're the ones who'll take up the others' slack. -- Investor's Business Daily
What's my point? Nobody knows wtf they're talking about in Washington. If they keep playing politics as usual, this economic "crisis" is going to become an economic meltdown of epic proportions. LET THE FREE MARKET BE FREE.
If people were dumb enough to get into bad mortages, they lose their houses. If banks were shady/predatory in their lending practices (and they were), they should be 1) prosecuted and 2) allowed to go bankrupt. Wanna know what happens when you, as American taxpayers, allow the government to bail out companies who weren't only financially corrupt, but now we see morally corrupt as well?
A few days after the federal government unveiled an $85 billion bailout package for the insurance company AIG, executives from one of the firm's subsidiaries went on a week-long retreat to the St. Regis Resort in Monarch Beach, Calif. The tab: $443,000.
Most of the attendees at the convention between Sept. 22 and Sept. 30 stayed in premium "pool view" rooms at the 400-room hotel, with 47-inch LCD TVs and marble bathrooms furnished with a "Deep Roman" bath and shower. The rate: $375 per night.
The group also booked 17 "ocean view" rooms, at $425 each, and one "presidential suite," discounted from its usual $3,200 a night to $1,600.
Another $9,982 was spent on food and drinks at the StoneHill Tavern, the Monarch Bayclub, in-room dining and the lobby lounge; $6,939 on golf; $1,488 at the Vogue Salon; and $1,450 on no-show and cancellation fees.
The itemized bill does not show what executives specifically ordered at the spa and salon, but a look at the hotel's spa menu (PDF) shows 75-minute "intuitive massages" at $215 a pop (most of the executives spent $210 each for a spa treatment on Sept. 25) and men's and women's haircuts and styles starting at $50 and $75, respectively.
Executives also spent $147,302 on banquets at the hotel and $23,380 at the Spa Gaucin, which features three-story waterfalls and a "Well of Desires, where symbolically all your cares will be left behind." -- Washington Post Investigations