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

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)
FreedomKeys.com ^ | 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
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.. 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.
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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.) …
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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.
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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. …
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So I ask you now: Do you have any standards at all?  Do you even know what honesty means?
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[Was] getting people to vote for Barack Obama so important that you will throw away everything that journalism is supposed to stand for? …
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… 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.
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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.
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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
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.. 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.
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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.
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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 ..

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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.
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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.
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In the times that Fannie and Freddie couldn’t make the market, they became the market.
.. — Kevin Hassett, Bloomberg News, here ..

 

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.. Obama choice helped Fannie block oversight
National security adviser tied to discrediting of probe ..
By Jim McElhatton, The Washington Times,October 13, 2010 here
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UNDER SCRUTINY: Thomas E. Donilon worked as a registered lobbyist for Fannie Mae from 1999 to 2005.
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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.
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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.
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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 lobbyist.st wee
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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.
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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).
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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:  http://tinyurl.com/4h9955
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“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.
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“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
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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.
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Meanwhile, guess who were the top four recipients of campaign contributions from Fannie and Freddie between 1988 and 2008?
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Senators Chris Dodd, John Kerry, Hillary Clinton, and — still ready? — Barack Obama.
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A coincidence, I tell you — just a coincidence.
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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 ..

 

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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:
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“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.
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“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.
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” 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.
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“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.
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“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.
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“I urge my colleagues to support swift action on this GSE reform legislation.”
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It died at the hands of the DEMOCRATS —
HERE’s a video clip showing their anger.
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“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
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“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
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“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
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Bloomberg News has an excellent recap of
the history of the financial meltdown:.HERE.
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Barney Frank, Chris Dodd, Jimmy Carter, Barack Obama
not shown: Bill Clinton

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

 

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“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

 

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“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.]

 

Hypocrite-in-Chief Seeks Line Item Veto He Blocked Bush From Getting

This is pretty massive hypocrisy even coming from a world-class hypocrite:

Tuesday, May 25, 2010
Obama asks Hill for line-item veto he once opposed
Stephen Dinan

When President George W. Bush called for a kind of line-item veto four years ago, the top Senate Democrat said it was like getting a “bad sore throat,” and the No. 2 House Democrat called it “a sham.” On Monday, President Obama asked them to reconsider and pass something very similar, for his sake.

With fears of a Greek-style debt collapse roiling a Congress already balking at new spending, the White House on Monday proposed a modified line-item veto that would give the administration another crack at forcing Congress to vote on spending cuts.

But the proposal will have to pass a Congress wary of giving up power over the purse, and would require a reversal by many Democrats who voted against a similar proposal from Mr. Bush.

One who’s already reversed himself is Mr. Obama, who as a senator in 2007 voted along with Sen. Joseph R. Biden Jr., now the vice president, and almost all of the rest of Senate Democrats to filibuster Mr. Bush’s proposal.

The White House said Mr. Obama embraced line-item powers by the time he won the White House, and that times are bad enough that Congress may now be ready to follow his lead.

“The fiscal context has changed as it became necessary to combat a severe economic downturn and as ongoing deficits have become a growing concern,” Peter R. Orszag, Mr. Obama’s budget director, told reporters. “We are hopeful the Congress will enact this legislation because it will help everyone to reduce unnecessary spending.”

He said the new presidential powers could encourage Congress to scrutinize spending bills more carefully, because lawmakers wouldn’t want to be shamed by having their projects singled out.

What is really amazing is the argument that Obama is giving to justify giving him a line-item veto: we’ve got a growing crisis, and the president needs this tool to avert it.

By Obama’s very own reasoning, he and the Democrat Party are fundamentally responsible for the 2008 economic collapse.  Because had they given Bush this power, he could have averted the disaster – but they refused to give him the necessary power he needed.

A couple of quotes from US News & World Report must suffice to illustrate:

Seventeen. That’s how many times, according to this White House statement (hat tip Gateway Pundit), that the Bush administration has called for tighter regulation of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac. […]

… But it didn’t prevent them from spewing a huge amount of toxic waste, in the form of subprime and Alt-A mortgages, into our financial institutions from 2004 to 2007. As Stephen Spruiell points out in The Corner on National Review Online, Fannie and Freddie spewed out $1 trillion worth (face value) of subprime mortgages between 2005 and 2007. That’s a whole lot of toxic waste. For more detail, consult the items referred to in my previous blogpost on this subject (most of the comments seem to have been disputes about the plot line of the movie It’s a Wonderful Life, which I should think could be settled by consulting a reference work).

Much if not all of that could have been prevented by a bill cosponsored by John McCain and supported by all the Republicans and opposed by all the Democrats in the Senate Banking Committee in 2005. That bill, which the Democrats stopped from passing, would have prohibited the GSEs from speculating on the mortgage-based securities they packaged. The GSEs’ mission allegedly justifying their quasi-governmental status was to package or securitize such mortgages, but the lion’s share of their profits—which determined top executives’ bonuses—came from speculation.

And there’s your 2008 mortgage meltdown, in a nutshell.  Bush warned and warned and warned about the impending crisis, to no avail.  Because the same Democrats who refused to give Bush the power Obama now says he needs to avert disaster refused to heed Bush’s warnings, and kept pushing us closer and closer and closer to the implosion point.  And then we imploded just as Bush had said we would.

I have always believed that the president should have a line-item veto – with the proviso that every line item veto be made a matter of public record so the American people could know what items the president was removing and who had installed those items in the first place.

This is just another of many, many proofs regarding what a gargantuan hypocrite slimeball the current occupant of the White House truly is.

But, for what it’s worth, it is probably unfair to single out Barack Obama as a slimeball, when so many of his fellow Democrats are also slimeballs.  Near the conclusion of the Washington Times article, we have this:

House Budget Committee Chairman John M. Spratt Jr., South Carolina Democrat, said he will take the lead in introducing Mr. Obama’s proposal in Congress, calling it “a step forward on the path to fiscal responsibility.”

Mr. Spratt led opposition to the 2006 Bush proposal.

At some point they should just call themselves the Demagogue Party and dispense with the pretenses as to what they truly are.