Posts Tagged ‘cooking the books’

‘Death Panels’ Are REAL. They Are Simply Part of ANY Socialized Medicine Scheme (VA Now Your ObamaCare Next)

May 21, 2014

Remember when liberal economist Paul Krugman heralded the VA as the “triumph of socialized medicine“?  Maybe not so much to those who don’t inhale the contents of spray paint.

Let’s just face facts: Sarah Palin was wrong when she famously said:

The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama’s ‘death panel’ so his bureaucrats can decide, based on a subjective judgment of their ‘level of productivity in society,’ whether they are worthy of health care. Such a system is downright evil.”

She was wrong only in this: you don’t GET to “stand in front of Obama’s ‘death panel’ and face the bureaucrats who decide whether you live or die.  That’s a privilege you don’t deserve in a socialized health care system.  Rather, you are just left twisting in the wind wondering where the hell your health care is while you die of medical neglect.

In other words, Sarah Palin’s description of reality under Obama – as terrifying as it was – wasn’t anywhere NEAR terrifying enough.

When you’ve got a Hitler or a Stalin or a Mao – or a true socialist ideologue dictator like Obama – running your country, the truth is almost always more terrifying than the fiction.

The Veterans Administration debacle where veterans across the country are DYING while waiting in vain with their neglect covered up by secret lists is proof that death panels are all-too real.  And that no, you don’t get to “stand” in front of them.  Because even THAT is too much work for these bureaucrats.

You’ve got to stop and think about what the Obama administration’s excuses are.  Do they say something on the order of, “You can’t possibly blame me for this given the sheer size of government.  Now please excuse me while I make the government that is clearly already too big and too out-of-control even BIGGER and even MORE out-of-control.”

Or maybe Obama wants to say something like, “The death panels that you see are not my ObamaCare death panels, but VA death panels.  Now excuse me while I go make your ObamaCare more like the socialized VA system.”

You need to understand that: the classic Democrat talking point is that the VA disaster is one that has been going on for years, so it’s nobody’s fault.  Except that Democrats – and Barack Obama in particular – have been trying to make EVERYBODY’S health care more like the VA system.  And so how is it not their fault?

If the VA is a bad system that is too socialized, too big, too bureaucratic and too bloated, then why the hell are these Democrats (i.e., “DEMOn possessed bureauCRATS) trying to make the REST of health care just like the system they say is broken and can’t be made to work?

There are at least two reasons why socialized medicine invariably becomes a death panel from at least two different directions.  The first is because the government can force private medical practices to jump through all kinds of hoops and impose all kinds of burdensome regulations and costs.  But when they take over health care delivery, suddenly they discover that, hell, this is EXPENSIVE, and then they begin to reduce treatment to save money.  And the second is more insidious but pervasive throughout the system: once health care is socialized, there is simply no incentive for doctors to provide the sort of care they are forced to provide in private practice.  As an example of this, it was discovered in the Albuquerque VA facility that eight cardiologists were doing the work of ONE private practice cardiologist:

There are eight physicians in the cardiology department. But at any given time, only three are working in the clinic, where they see fewer than two patients per day, so on average there are only 36 veterans seen per week. That means the entire eight-person department sees as many patients in a week as a single private practice cardiologist sees in two days, according to the doctor.

For perspective, 60% of cardiologists reported seeing between 50 and 124 patients per week, according to a 2013 survey of medical professionals’ compensation conducted by Medscape. On the low end, the average single private practice cardiologist who participated in the study saw more patients in a week than the Albuquerque VA’s entire eight-person cardiology department.

In some cases, a long wait to see a doctor is just another routine inconvenience of the sort people expect in a large bureaucracy, but other times it can be a matter of life and death.

The problem is NOT money.  The problem is a stifling bureaucracy that simply ABSORBS money like a  giant sponge and the problem is the disincentivization of salaried doctors who simply do not have the incentives to work harder and see more patients the way that private practice doctors have.

It is simply a FACT that money is not the problem, contrary to socialist progressive liberal lies to the contrary:

The backlog of claims and unnecessary delays in veterans’ care has broadened despite a 235 percent increase in the budget of the Department of Veterans Affairs between 2001 and 2013.

That finding has prompted veterans’ advocates to contend that it is a lack of accountability, not funding, that is at the root of the systemic crisis.

Budget increases at the VA have come as the total number of veterans is decreasing due primarily to the deaths of aging World War II participants.

According to figures from the Office of Management and Budget, funding for medical care, which composes 40 percent of the VA’s annual budget, increased 193 percent from 2001 to 2013.

During the same period, the overall veterans’ population declined by 4.3 million, Investor’s Business Daily reported.

As of June 2011, the U.S. Department of Veterans Affairs reported that an average of 1,100 veterans die every single day.  I recently heard the figure of 1,800 WWII vets dying per day – and you would expect that as the years go by and these veterans get older, the survivors would die at an increasingly faster rate.  There is simply no way that the relatively small number of younger veterans who are entering the system compared to the large number of older veterans who are dying off are overwhelming the system.  The fact is the opposite of what Democrats are saying: we have more money per veteran than EVER.  And yet we have more problems (under Obama) than we have EVER had.

Here is the bottom line: socialized or “single payer” medical systems are doomed to inefficiency.  The result is you keep paying more and more to keep getting less and less.  That is simply a fact.

ObamaCare is one giant ‘death panel’ in the making.  And with the above-mentioned caveat, Sarah Palin NAILED its essence in her “death panel” warning five years ago.

We now know that Obama – who has said in this scandal just as he has said in every other freaking damn scandal that he had no idea that it was happening and it can’t be his fault because everything is still Bush’s fault blah-blah-blah – is just a bystander-in-chief who is discovering the failures of his government by reading the damn newspaper.

At best, this turd is such a failure as a leader it is unreal.

Do you know that Obama hasn’t bothered to have a one-on-one meeting with Shinseki – where real problems could be discussed – in two damn years???  That’s a complete failure to lead.  Period.

But we also know that NOTHING about Obama is “at best.”  We know that this worthless disgrace is always THE WORST.  And so we also now know that Obama is a serial LIAR without any shame, any honor, any decency, any integrity, or any virtue.  The FACTS scream that Obama is a liar and yeah, HE DID KNOW this was going on for the six years he was doing NOTHING:

From the Washington Times, May 18, 2014:

The Obama administration received clear notice more than five years ago that VA medical facilities were reporting inaccurate waiting times and experiencing scheduling failures that threatened to deny veterans timely health care — problems that have turned into a growing scandal.

Veterans Affairs officials warned the Obama-Biden transition team in the weeks after the 2008 presidential election that the department shouldn’t trust the wait times that its facilities were reporting.

“This is not only a data integrity issue in which [Veterans Health Administration] reports unreliable performance data; it affects quality of care by delaying — and potentially denying — deserving veterans timely care,” the officials wrote.

And from the Washington Post, May 20, 2014:

Robert Petzel resigned last week as the top health official for the Department of Veterans Affairs, just one day after testifying before a Senate committee that he knew VA health clinics were using inappropriate scheduling practices as early as 2010.

Whistleblowers claim the schemes continued until this year, leading to a recent wave of outrage that sent the VA and White House scrambling to correct the alleged problems and restore confidence in the department.

Petzel admitted that he knew of the issue after Sen. Johnny Isakson (R-Ga.) questioned him about the memo below, in which a top VA executive warned the directors of all VA health networks that questionable scheduling practices would “not be tolerated.”

The message summarized at least 17 tactics that VA hospitals were known to have used to hide treatment delays and give the impression they were meeting the department’s goal of seeing patients within 14 to 30 days.

[A PDF of the memo is available here].

Please notice that it was a REPUBLICAN who questioned the Obama administration.

So the White House comes out and says, “Oh, we’re taking measures.  Look, we’re going to fire this turd bureaucrat Petzel.”  When Petzel had ALREADY LONG-SINCE ANNOUNCED HE WAS RETIRING.

To wit: this is like every single other of Obama’s long list of scandals.  Initial professed outrage: “I’m mad as hell,” Obama’s VA turd Shinseki says.  And then not to be outdone, “Obama is madder than hell,” a top Obama aide says of his master.  And then nobody is held responsible, nobody is fired, nobody even loses their damn BONUS.

Obama – as his mouthpiece Jay Carney has been doing – is referring to the VA abominations as “allegations.”  When what has ALREADY been documented is criminal and evil.

On the “problems,” Obama said, “We have been working really hard to address them.”  He said, “Taking care of our veterans and their families has been one of the causes of my presidency.”  Which begs the question just what the hell he HAS been doing when I documented above that Obama KNEW about these “problems” for SIX YEARS and has done NOTHING to keep the crisis from growing FAR WORSE.

Obama also said that he’s not going to let this “become a political football.”  And thus as dictator and Fuehrer seized all power to investigate this so that no one can possibly hold him accountable in any way, shape or form as he deals with this scandal “the Chicago way.”

This is exactly what happened with the Fast and Furious scandal in which Obama and Eric Holder put guns into the hands of Mexican drug cartels and then let them murder a Border Patrol agent.  And did NOTHING beyond their cover-up.

This is exactly what happened with the Benghazi scandal in which Obama and Hillary Clinton sent a United States Ambassador to a Libyan hellhole, refused to provide him with security he was begging for even as every other civilized power was pulling their people out of the violence-ridden region, left him to be raped, tortured and murdered while issuing stand down orders to those who pleaded to be allowed to help him and then covered-up their fiasco by dishonestly blaming the attack on a Youtube video that had absolutely NOTHING WHATSOEVER to do with the pre-planned terrorist attack they should have seen coming.  To date, Obama’s disgustingly shameful promises aside, the only person who has EVER been held responsible for this attack is the United States citizen who was slandered as the cause for this al Qaeda-sponsored terrorist attack.

This is exactly what happened with the IRS scandal in which, at the direction of Washington and specifically at the instigation of an Obama appointee, the IRS was used as a political weapon to target and punish Obama’s political opponents.

In every case, Obama relied on the fact that the mainstream media “news coverage” amounts to naked leftist propaganda.  If you want to know how the media would have treated a Republican, just google “Donald Sterling” and see the daily outrage as the media focuses in on their target and then attacks him like red meat on a daily basis until he’s destroyed.  Whereas in Obama’s case, if they even report the story, it’s treated as done and over with.  So move on.

It is the routine script for a despicable ideologue failure.  And he’s playing the same damn game again.

Everything that conservatives said would happen with ObamaCare has either happened or is happening, versus Obama who is now documented to have lied about EVERYTHING from being allowed to keep your doctor, or your health plan, to bending the cost curve down when in fact he’s done otherwise, to there being no taxes on people earning less than $200,000 when there are now all kinds of taxes, etcetera ad nauseam.

And as ObamaCare becomes more and more like the socialized medicine of the VA system, we can look at the countries who have victimized their citizens with appalling care and see what is coming next:

What Liberals Want For Your Child (To Die). As Evidenced By What Is Now Happening In England’s NHS Socialist Health Care System.

Coming Soon To America (Thanks To Obama And Democrats): ‘Production Line’ Government Healthcare

What Lies In Store For Your Parents Under ObamaCare (It Will Be Even WORSE For You!)

Democrats, Please Explain Why You Want To Inflict Americans With This Vile Health Care System?

‘Crazy Claims About Death Panels’ Sadly Not Crazy At All

The only people in America who deserve to die slow, painful deaths of medical neglect are those who voted for Obama.  But unless Republicans take over the Senate and then take the presidency away from Hillary Clinton – who wanted socialized medicine even before Obama did – we’re ALL going to suffer death by socialism.

Veterans EARNED their health care.  By SERVING in the armed forces, and by subjecting themselves to conditions and environments that no civilian would EVER willingly experience – and by submitting to conditions in which they cannot sue the government which ordered them to do what they did – they EARNED their health care.

But the VA system – because it IS socialized, because it IS a government bureaucracy, because it IS huge – is broken.

Now Obama and the Democrats demand that every single person in America receive the benefits and care that only those who SERVED ought to receive.  And now Obama and these Democrats are breaking our health care system by letting the same government that clearly is incapable of administering the Veterans Administration run the REST of the far larger health care system into the ground.




Why Did Our Economy Melt Down In 2008? (Email This To Your Friends)

October 25, 2010

Note: I did not write the following; I am only passing it along.  I hope you read it and then pass it along as well.

Remember the LONG-TERM Causes of the Financial Sector Meltdown (an email pre-formatted for sending) ^ | 20101010 | various
Posted on 10/23/2010 12:49:32 PM PDT by FreeKeys

Would the Last Honest Reporter Please Turn On the Lights?
by novelist Orson Scott Card, a Democrat
.. This [financial crisis] was completely foreseeable and in fact many people did foresee it.  One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules.  The other party blocked every such attempt and tried to loosen them.
Furthermore, Freddie Mac and Fannie Mae were making political contributions to the very members of Congress who were allowing them to make irresponsible loans.  (Though why quasi-federal agencies were allowed to do so baffles me.  It’s as if the Pentagon were allowed to contribute to the political campaigns of Congressmen who support increasing their budget.) …
If you who produce our local daily paper actually had any principles, you would be pounding this story, because the prosperity of all Americans was put at risk by the foolish, short-sighted, politically selfish, and possibly corrupt actions of leading Democrats, including Obama.
If you who produce our local daily paper had any personal honor, you would find it unbearable to let the American people believe that somehow Republicans were to blame for this crisis. …
So I ask you now: Do you have any standards at all?  Do you even know what honesty means?
[Was] getting people to vote for Barack Obama so important that you will throw away everything that journalism is supposed to stand for? …
… tell the truth about John McCain: that he tried, as a Senator, to do what it took to prevent this crisis.  You will tell the truth about President Bush: that his administration tried more than once to get Congress to regulate lending in a responsible way.
This was a Congress-caused crisis, beginning during the Clinton administration, with Democrats leading the way into the crisis and blocking every effort to get out of it in a timely fashion.
If you at our local daily newspaper continue to let Americans believe — and vote as if — President Bush and the Republicans caused the crisis, then you are joining in that lie.
– Novelist Orson Scott Card, a Democrat, on October 5, 2008,HERE
.. The Financial Sector Meltdown ..
1.  Almost all of the financial problems we see today are based on bad mortgage lending.  That would be lending money to people to buy homes who didn’t qualify for a loan.
2.  The Democrats, under Clinton, strengthened a government-created monster called the “Community Reinvestment Act” [first foisted upon the country under Jimmy Carter].  This law was then used by “activists” and “community organizers” …  to coerce lending institutions to make these bad loans … millions of them.
3.  Now we see what happens when political “wisdom” supplants good loan underwriting.  When private financial institutions are virtually forced to make loans to people with a bad credit and job history … this is what you get.  Enjoy it. — Neal Boortz, here ..

Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.
Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street’s efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.
In the times that Fannie and Freddie couldn’t make the market, they became the market.
.. — Kevin Hassett, Bloomberg News, here ..


.. Obama choice helped Fannie block oversight
National security adviser tied to discrediting of probe ..
By Jim McElhatton, The Washington Times,October 13, 2010 here
UNDER SCRUTINY: Thomas E. Donilon worked as a registered lobbyist for Fannie Mae from 1999 to 2005.
Years before Fannie Mae foundered amid a massive accounting scandal, President Obama’s choice for national security adviser oversaw an office inside the mortgage giant that orchestrated a negative publicity blitz to fight attempts by Congress to increase government oversight, records show.
Thomas E. Donilon, who won the job as national security adviser this month, worked as a registered lobbyist for Fannie Mae from 1999 to 2005 at a time the company’s officials insisted finances were sound. He also earned more than $1.8 million in bonuses [from Frannie Mae] before the government took over the troubled company in the wake of an accounting scandal.
Vice President Joseph R. Biden Jr. and Mr. Obama, who railed against lobbyists on the campaign trail, hailed Mr. Donilon’s appointment last week, but made no mention of his time as a registered wee


Democrats and some [big-government] Republicans opposed reform in part because Fannie and Freddie were very good at greasing palms. Fannie has spent $170 million on lobbying since 1998 and $19.3 million on political contributions since 1990.
The principal recipient of Fannie Mae’s largesse was a Democrat, Sen. Chris Dodd (D, CT), chairman of the Senate Banking Committee. No. 2 was another Democrat, Sen. Barack Obama (D, IL).
Mr. Dodd was also the second largest recipient in the Senate of contributions from Countrywide’s political action committee and its employees, and the recipient of a home loan from Countrywide at well below market rates.  The No. 1 senator on Countrywide’s list? Barack Obama. Check it out here:


“Congressman Frank and Senator Dodd wanted the government to push financial institutions to lend to people they would not lend to otherwise, because of the risk of default.
“The idea that politicians can assess risks better than people who have spent their whole careers assessing risks should have been so obviously absurd that no one would take it seriously.” — Dr. Thomas Sowell, Professor Emeritus, Economics, Stanford University, HERE


When the Bush administration tried to rein in Freddie and Fannie from continuing to engage in risky practices, guess who stepped in to block their efforts? Democratic senators Chris Dodd, John Kerry, Hillary Clinton, and — are you ready? — Barack Obama.
Meanwhile, guess who were the top four recipients of campaign contributions from Fannie and Freddie between 1988 and 2008?
Senators Chris Dodd, John Kerry, Hillary Clinton, and — still ready? — Barack Obama.
A coincidence, I tell you — just a coincidence.
More mere coincidences: Franklin Raines — a former Carter- and Clinton-administration official and former head of Fannie Mae, now under investigation for cooking its books — had a lot of powerful people in Congress beholden to his agency. Here is a list of his campaign-contribution recipients. Meanwhile, Democratic honcho Jim Johnson, another former Fannie Mae CEO, has been an economic adviser to and major fundraiser for Barack Obama, and even ran his vice-presidential search committee until growing scandals over his Fannie management forced him to step down in July. – Robert Bidinotto, here ..


On May 25, 2006, Sen. John McCain spoke forcefully on behalf of the Federal Housing Enterprise Regulatory Reform Act of 2005.  He said on the floor of the Senate:
“Mr. President, this week Fannie Mae’s regulator reported that the company’s quarterly reports of profit growth over the past few years were “illusions deliberately and systematically created” by the company’s senior management, which resulted in a $10.6 billion accounting scandal.
“The Office of Federal Housing Enterprise Oversight’s report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae’s former chief executive officer, OFHEO’s report shows that over half of Mr. Raines’ compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.
” The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator’s examination of the company’s accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.
“For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac–known as Government-sponsored entities or GSEs–and the sheer magnitude of these companies and the role they play in the housing market. OFHEO’s report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO’s report solidifies my view that the GSEs need to be reformed without delay.
“I join as a cosponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005, S. 190, to underscore my support for quick passage of GSE regulatory reform legislation. If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.
“I urge my colleagues to support swift action on this GSE reform legislation.”
It died at the hands of the DEMOCRATS —
HERE’s a video clip showing their anger.


“Many politicians and pundits claim that the credit crunch and high mortgage foreclosure rate is an example of market failure and want government to step in to bail out creditors and borrowers at the expense of taxpayers who prudently managed their affairs. These financial problems are not market failures but government failure.The credit crunch and foreclosure problems are failures of government policy.” — Dr. Walter E. Williams, the John M. Olin distinguished professor of economics at George Mason University, HERE


“Barack Obama wasn’t just the second-largest recipient of Fannie Mae and Freddie Mac political contributions. He was also the senator from ACORN, the activist leader for risky ‘affirmative action’ loans. … [The CRA] gave groups such as ACORN a license and a means to intimidate banks … ACORN employed its tactics in 1991 by taking over the House Banking Committee room for two days to protest efforts to scale back the CRA. … Obama represented ACORN in a 1994 suit against redlining.  ACORN was also a driving force behind a 1995 regulatory revision pushed through by the Clinton administration that greatly expanded the CRA and helped spawn the current financial crisis. Obama was the attorney representing ACORN in this effort.” — IBD Editorials
“The Woods Fund report makes it clear Obama was fully aware of the intimidation tactics used by ACORN’s Madeline Talbott in her pioneering [“community organizer”] efforts to force banks to suspend their usual credit standards. Yet he supported Talbott in every conceivable way. He trained her personal staff and other aspiring ACORN leaders, he consulted with her extensively, and he arranged a major boost in foundation funding [via CAC and Woods Fund] for her efforts.” — Stanley Kurtz, “BARACK’S ‘ORGAANIZER’ BUDS PUSHED FOR BAD MORTGAGES”HERE


Bloomberg News has an excellent recap of
the history of the financial meltdown:.HERE.



Barney Frank, Chris Dodd, Jimmy Carter, Barack Obama
not shown: Bill Clinton



“Scratch the surface of an endemic problem — famine, illness, poverty —  and you invariably find a politician at the source.” —  Simon Carr


“One of the methods used by statists to destroy capitalism consists in establishing controls that tie a given industry hand and foot, making it unable to solve its problems, then declaring that freedom has failed and stronger controls are necessary.” — Ayn Rand


“I think that we all need to consider the possibility … just the possibility … that Obama is engaged in a conscious effort to destroy our free market economy so that he can build a government-controlled socialist party on the rubble.” — Neal Boortz, here
[Conscious effort or not, we have an emergency on our hands.]


Who REALLY Exploded Your Economy, Liberals Or Conservatives?

August 3, 2009

From Mark Levin’s Liberty and Tyranny, pages 67-71:

From where does the Statist acquire his clairvoyance in determining what is good for the public?  From his ideology.  The Statist is constantly manipulating public sentiment in a steady effort to disestablish the free market, as he pushes the nation down tyranny’s road.  He has built an enormous maze of government agencies and programs, which grow inexorably from year to year, and which intervene in and interfere with the free market.  And when the Statist’s central planners create economic perversions that are seriously detrimental to the public, he blames the free market and insists on seizing additional authority to correct the failures created at his own direction.

Consider the four basic events that led to the housing bust of 2008, which spread to the financial markets and beyond:

EVENT 1: In 1977, Congress passed the Community Reinvestment Act (CRA) to address alleged discrimination by banks in making loans to poor people and minorities in the inner cities (redlining).  The act provided that banks have “an affirmative obligation” to meet the credit needs of the communities in which they are chartered.1 In 1989, Congress amended the Home Mortgage Disclosure Act requiring banks to collect racial data on mortgage applications.2 University of Texas economics professor Stan Liebowitz has written that “minority mortgage applications were rejected more frequently than other applications, but the overwhelming reason wasn’t racial discrimination, but simply that minorities tend to have weaker finances.”3 Liebowitz also condemns a 1992 study conducted by the Boston Federal Reserve Bank that alleged systemic discrimination.  “That study was tremendously flawed.  A colleague and I … showed that the data it had used contained thousands of egregious typos, such as loans with negative interest rates.  Our study found no evidence of discrimination.”4 However, the study became the standard on which government policy was based.

In 1995, the Clinton administration’s Treasury Department issued regulations tracking loans by neighborhoods, income groups, and races to rate the performance of banks.  The ratings were used by regulators to determine whether the government would approve bank mergers, acquisitions, and new branches.5 The regulations also encouraged Statist-aligned groups, such as the Association of Community Organizations for Reform Now (ACORN) and the Neighborhood Assistance Corporation of America, to file petitions with regulators, or threaten to, to slow or even prevent banks from conducting their business by challenging the extent to which banks were issuing these loans.  With such powerful leverage over banks, some groups were able, in effect, to legally extort banks to make huge pools of money available to the groups, money they in turn used to make loans.  The banks and community groups issued loans to low-income individuals who often had bad credit or insufficient income.  And these loans, which became known as “subprime” loans, made available 100 percent financing, did not always require the use of credit scores, and were even made without documenting income.6 Therefore, the government insisted that banks, particularly those that wanted to expand, abandon traditional underwriting standards.  One estimate puts the figure of CRA-eligible loans at $4.5 trillion.7

EVENT 2: In 1992, the Department of Housing and Urban Development pressured two government-chartered corporations – known as Freddie Mac and Fannie Mae – to purchase (or “securitize”) large bundles of these loans for the conflicting purposes of diversifying the risks and making even more money available to banks to make further risky loans.  Congress also passed the Federal Housing Enterprises Financial Safety and Soundness Act, eventually mandating that these companies buy 45% of all loans from people of low and moderate incomes.8 Consequently, a SECONDARY MARKET was created for these loans.  And in 1995, the Treasury Department established the Community Development Financial Institutions Fund, which provided banks with tax dollars to encourage even more risky loans.

For the Statist, however, this was still not enough.  Top congressional Democrats, including Representative Barney Frank (Massachusetts), Senator Christopher Dodd (Connecticut), and Senator Charles Schumer (New York), among others, repeatedly ignored warnings of pending disaster, insisting that they were overstated, and opposed efforts to force Freddie Mac and Fannie Mae to comply with usual business and oversight practices.9 And the top executives of these corporations, most of whom had worked in or with Democratic administrations, resisted reform while they were actively cooking the books in order to award themselves tens of millions of dollars in bonuses.10

EVENT 3: A by-product of this government intervention and social engineering was a financial instrument called the “derivative,” which turned the subprime mortgage market into a ticking time bomb that could magnify the housing bust by orders of magnitude.  A derivative is a contract where one party sells the risk associated with the mortgage to another party in exchange for payments to that company based on the value of the mortgage.  In some cases, investors who did not even make the loans would bet on whether the loans would be subject to default.  Although imprecise, perhaps derivatives in this context can best be understood as a form of insurance.  Derivatives allowed commercial and investment banks, individual companies, and private investors to further spread – and ultimately multiply – the risk associated with their mortgages.  Certain financial and insurance institutions invested heavily in derivatives, such as American International Group (AIG).11

EVENT 4:  The Federal Reserve Board’s role in the housing boom-and-bust cannot be overstated.  The Pacific Research Institute’s Robert P. Murphy explains that “[the Federal Reserve] slashed rates repeatedly starting in January 2001, from 6.5 percent until they reached a low in June 2003 of 1.0 percent.  (In nominal terms, this was the lowest the target rate had been in the entire data series maintained by the St. Louis Federal Reserve, going back to 1982)….  When the easy-money policy became too inflationary for comfort, the Fed (under [Alan] Greenspan and the then new Chairman Ben Bernanke at the end) began a steady process of raising interest rates back up, from 1.0 percent in June 2004 to 5.25 percent in June 2006….”12 Therefore, when the Federal Reserve abandoned its role as steward of the monetary system and used interest rates to artificially and inappropriately manipulate the housing market, it interfered with normal market conditions and contributed to destabilizing the economy.


1 Howard Husock, “The Trillion-Dollar Shakedown that Bodes Ill for Cities,” City Journal, Winter 2000.

2 Stan Liebowitz, “The Real Scandal,” New York Post, Feb. 5, 2008.

3 Ibid.

4 Ibid.

5 Howard Husock, “The Financial Crisis and the CRA,” City Journal, Oct. 30, 2008.

6 Liebowitz, “The Real Scandal.”

7 Husock, “The Financial Crisis and the CRA.”

8 Ibid.

9 Editorial, “Fannie Mae’s Patron Saint,” Wall Street Journal, Sept. 10, 2008; Joseph Goldstein, “Pro-Deregulation Schumer Scores Bush For Lack of Regulation,” New York Sun, Sept. 22, 2008; Robert Novack, “Crony Image Dogs Paulson’s Rescue Effort,” Chicago-Sun Times, July 17, 2008.

10 Office of Federal Housing Enterprise Oversight, “Report of the Special Examination of Freddie Mac,” Dec. 2003; Office of Federal Housing Oversight, “Report of the Special Examination of Fannie Mae,” May 2006.

11 Lynnley Browning, “AIG’s House of Cards,”, Sept. 28, 2008.

12 Robert P. Murphy, “The Fed’s Role in the Housing Bubble,” Pacific Research Institute blog.

The government links from footnote 10 have been purged (and I COUNT on left-leaning “news” sources to purge stories that reveal the left for what it is), but there is plenty of evidence that a) Fannie and Freddie were firmly in the hands of Democrats; b) that Democrats and Fannie/Freddie at least twice resisted reforms by President Bush and Republicans; and c) that Fannie and Freddie executives – who were deeply involved with Democrat activismactively cooked the books to obtain huge bonuses prior to the disastrous crash.  We can also demonstrate d) that Barack Obama and Chris Dodd were involved with corrupt Fannie and Freddie (and Obama and Dodd were also receiving large contributions from corrupt Lehman Bros. even as Obama was getting a sweetheart mortgage deal from corrupt Tony Rezko while Chris Dodd was getting sweetheart mortgage deasl from corrupt Countrywide) right up to the tops of their pointy little heads.

When one examines the actual factors that led to the housing mortgage meltdown (as Mark Levin documents), when one examines the Democrat’s patent refusal to even accept that there was even a problem with Fannie and Freddie – much less allow any regulation – prior to the ensuing disaster, and when one examines the record to see which politicians were receiving money from the parties most responsible for the disaster, there is clearly only one party to blame: the Democrat Party.

And they are right back to all their old tricks.  It was rampant and insane spending that got us into this financial black hole – and they want MORE on top of MORE spending.  Meanwhile, Democrats such as Barney Frank are hard at work trying to create the NEXT massively destructive housing bubble, ACORN is trying to seize houses from rightful owners in the name of the “poor,” liberals are making moral hazard that rewards recklessness and irresponsibility and punishes frugality and responsibility official government policy , even as the Obama administration is creating “solutions” to the foreclosure issue that have abjectly failed.