More Proof Democrats Destroyed The Economy In 2008: The Ongoing Fannie Mae/Freddie Mac Disaster

Who destroyed the economy in 2008?  Democrats say it was Bush.  Why?  Well, because he was president, that’s why.

Why – when applying the same logic – Barack Obama STILL isn’t responsible for any of his economic mess fully two years after George W. Bush left office is anybody’s guess.

But stop and think.  The primary cause for the 2008 economic meltdown was a downturn in the housing market and the underlying mortgage market.

At the core of that meltdown was GSEs (that’s “Government Sponsored Enterprises” to you) Fannie Mae and Freddie Mac.

The problem with Fannie Mae and Freddie Mac has always been that it was – and remains – a social welfare institution masquerading as a financial institution.  And they have made beyond-godawful “financial” decisions because their true loyalty has always been with socialist policies rather than financial ones.

Let’s look at Fannie and Freddie’s current picture:

Fannie, Freddie’s $685B fix
Bloomberg
Last Updated: 11:54 PM, November 4, 2010
Posted: 11:54 PM, November 4, 2010

Fannie Mae and Freddie Mac, the mortgage firms operating under federal conservatorship, may cost taxpayers as much as $685 billion as the US covers losses and overhauls the housing-finance system, Standard & Poor’s said.

Costs for resolving the two government-sponsored entities could reach $280 billion, including $148 billion already delivered under a US Treasury Department promise of unlimited support, New York-based S&P said yesterday in a research report. The government may spend an additional $405 billion to capitalize a replacement for the two companies, which own or insure more than half the US mortgage market.

“It appears unlikely in our view that housing and mortgage markets will be able to operate normally without continuing and substantial government involvement,” S&P said, citing the GSEs’ growing portfolio of unsold homes, a sluggish economy, high unemployment, the prospect of rising foreclosures and billions in legacy losses.

Treasury Secretary Timothy F. Geithner, who has said there is a strong case to be made for continued US involvement, has promised to deliver the Obama administration’s plan to overhaul the housing-finance system by the end of January. Republican lawmakers, who will take control of the House of Representatives in January, have called for the government to end its support for Washington-based Fannie Mae and Freddie Mac, of McLean, Va.

“Although federal authorities have taken no concrete public steps toward sponsoring a GSE alternative, Standard & Poor’s believes that it’s a useful exercise to consider how much such a recapitalization might cost taxpayers,” the report said.

$685 BILLION.  That’s quite a mess.

Did it just happen?  Hardly.  This was going on for years.  This was what caused the subprime crisis that destroyed our economy in 2008.

Let’s survey the record.  According to record provided by The New York Times, Fannie and Freddie were in huge trouble PRIOR TO the economic collapse.  And their holdings were so massive that there is simply no reasonable way that one can maintain that their crisis didn’t directly contribute to the greater crisis to be revealed.  Read the article dated July 11, 2008:

Fannie Mae and Freddie Mac are so big — they own or guarantee roughly half of the nation’s $12 trillion mortgage market — that the thought that they might falter once seemed unimaginable. But now a trickle of worries about the companies, which has been slowly building for years, has suddenly become a torrent.

A timeline of the subprime loan crisis of 2008 clearly reveals that it was Fannie Mae’s collapse that started the entire mess rolling downhill.  From Wikipedia:

September 2008

Main article: Global financial crisis in September 2008

• • September 7: Federal takeover of Fannie Mae and Freddie Mac, which at that point owned or guaranteed about half of the U.S.’s $12 trillion mortgage market, effectively nationalizing them. This causes panic because almost every home mortgage lender and Wall Street bank relied on them to facilitate the mortgage market and investors worldwide owned $5.2 trillion of debt securities backed by them.^[151][152]
  • September 14: Merrill Lynch is sold to Bank of America amidst fears of a liquidity crisis and Lehman Brothers collapse^[153]
  • September 15: Lehman Brothers files for bankruptcy protection^[154]
  • September 16: Moody’s and Standard and Poor’s downgrade ratings on AIG‘s credit on concerns over continuing losses to mortgage-backed securities, sending the company into fears of insolvency.^[155][156] In addition, the Reserve Primary Fund “breaks the buck” leading to a run on the money market funds. Over $140 billion is withdrawn vs. $7 billion the week prior. This leads to problems for the commercial paper market, a key source of funding for corporations, which suddenly could not get funds or had to pay much higher interest rates.^[157]
  • September 17: The US Federal Reserve lends $85 billion to American International Group (AIG) to avoid bankruptcy.
  • September 18: Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke meet with key legislators to propose a $700 billion emergency bailout through the purchase of toxic assets. Bernanke tells them: “If we don’t do this, we may not have an economy on Monday.”^[158]
  • September 19: Paulson financial rescue plan is unveiled after a volatile week in stock and debt markets.

Democrats who bother to offer any reason at all why “Republicans got us into this mess” claim that the Republicans refused to regulate and reform the economic sector.

Well, let’s dig a little further.  Was it George Bush who refused to regulate or reform?

Hardly.

From US News & World Report:

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.

That’s right.  George Bush tried SEVENTEEN TIMES to reform and regulate Fannie Mae and Freddie Mac, the agencies at the epicenter of the economic crisis.

When did this thing start?  Under Bush?  Not according to The New York Times, as I have pointed out before in a previous article.

From the New York Times, September 30, 1999:

Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

More.  Again from the New York Times, September 30, 1999:

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980′s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

What do we have, even in the pages of the New York Times?  A prediction that as soon as the economy cooled off, the mortgage market would explode like a depth charge and the government would have to step in to prevent a catastrophe.  And from a Clinton program, at that.

The same man – Peter Wallison – who had predicted the disaster from 1999 wrote a September 23, 2008 article in the Wall Street Journal entitled “Blame Fannie Mae and Congress For the Credit Mess.”

So this disaster began under Bill Clinton.  Specifically, it began in the very final years of the Clinton administration.  Interestingly, at the same time that the Dot-com bubble was getting ready to explode on Clinton’s watch.  Clinton got all the credit for a great economy, and Bush got to watch 78% of the value of Nasdaq destroyed just as he was taking office.  $7.1 TRILLION in wealth was vaporized (43% of the the Market Capitalization of the Dow Jones Wilshire 5000 Full Cap between 2000 Q1 and Q1 2003).  Bill Clinton handed George Bush a massive economic disaster (made even worse by the shocking 9/11 attacks), and Bush turned economic calamity into the longest consecutive period of job growth (52 straight months) in history.  In diametrical contradiction to all the lies that you have  heard from Democrats and from a mainstream media propaganda machine that often puts Joseph Goebbels to shame

What did George W. Bush do to deal with the necessary regulation and reform of these government-subsidized behemoths Fannie and Freddie?

Read what the New York Times said back in September 11, 2003:

WASHINGTON, Sept. 10— The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

So Bush WANTED to regulate and reform the industry that would destroy the economy five years later, again, in contradiction to a blatantly dishonest and ideologically liberal and biased media.  Bush didn’t “refuse to regulate.”  Bush TRIED to provide the necessary regulatory steps that could have averted disaster.

And who blocked those regulations and reforms that Bush tried to provide?  None other than Barney Frank and his Democrat buddies:

”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.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

Democrats blocked reform and regulation of Fannie and Freddie.  They threatened to filibuster any attempt at regulation and reform.  Meanwhile John McCain wrote a letter in 2006 urging reform and regulation of the GSEs.  He said:

Congress chartered Fannie and Freddie to provide access to home financing by maintaining liquidity in the secondary mortgage market. Today, almost half of all mortgages in the U.S. are owned or guaranteed by these GSEs. They are mammoth financial institutions with almost $1.5 Trillion of debt outstanding between them. With the fiscal challenges facing us today (deficits, entitlements, pensions and flood insurance), Congress must ask itself who would actually pay this debt if Fannie or Freddie could not?

And it came to pass exactly as John McCain warned.

Because of Democrats.  Who were virtually entirely to blame for the disaster that ensued as a result of their blocking of reform and regulation.

What did Democrats do with the mainstream media’s culpability?  They falsely dropped the crisis at the feet of “greedy” Wall Street.  But while examples of Wall Street greed abound, the liberal intelligentsia deliberately overlooked the central and preceding role of Democrat-dominated Fannie Mae and Freddie Mac.

Here’s how the mess actually happened:

The New York Times acknowledged that Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac “buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.”

And the Los Angeles Times on May 31, 1999 describes how this process turned into a bubble, as more begat more, and then more and more begat more and more and more:

Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more. . . .

In a nutshell, Fannie and Freddie, in their role as Government Sponsored Enterprises, bought tens of millions of mortgages, and then repackaged them into huge mortgage-backed securities that giant private entities such as Bear Stearns, AIG and Lehman Brothers purchased.  What made these securities particularly attractive to the private banking entities was that these securities were essentially being sold – and had the backing – of the United States government.  Fannie Mae and Freddie Mac, again, are Government Sponsored Enterprises.

Here’s the process:

The Role of the GSEs is to provide liquidity and stability to the U.S. housing and mortgage markets. Step 1 Banks lend money to Households to purchase and refinance home mortgages Step 2 The GSEs purchase these mortgage from the banks Step 3 GSEs bundle the mortgages into mortgage-backed securities Step 4 GSEs sell mortgage-backed and debt securities to domestic and international capital investors Step 5 Investors pay GSEs for purchase of debt and securities Step 6 GSEs return funds to banks to lend out again for the issuance of new mortgage loans.

Now, any intelligent observer should note a primary conflict that amounts to a fundamental hypocritical contradiction: the GSE’s role was to “provide stability,” and yet at the same time they were taking on “significantly more risk” in the final year of the Clinton presidency.  What’s wrong with this picture?

The GSEs Fannie Mae and Freddie Mac were designed to bundle up the mortgages into mortgage backed securities and then sell them to the private market.

Fannie Mae is exempt from SEC [Securities and Exchange Commission] regulation. Which screams why Bush wanted to regulate them.  This allowed Fannie Mae to bundle up mortgages, which were then rated AAA with no requirement to make clear what is in the bundle.  Which screams why Bush wanted to regulate them.

This is what allowed the toxic instruments that have been sold across the world to proliferate.  And then to explode.  It also created a situation where money institutions did not know and could not find out whether potential inter-bank business partners were holding these “boiled babies on their books, complete with a golden stamp on the wrapping,” rather than safe instruments.  This then inclined banks to a natural caution, to be wary of lending good money to other banks against these ‘assets’.  And thus banks refused to lend to one another.

And it was Democrats, not Bush, and not Republicans, who were all over this disaster that destroyed our economy in 2008.

We were led by a pathologically dishonest media to believe that Republicans had created this mess, when it fact it had been Democrats.  And so we gave the very fools who destroyed our economy total power.

And what have they done in the two years since?

They made bad far, far worse.

It Was DEMOCRATS Who Blew Up Our Economy In 2008

I’ve been saying this for months: It was DEMOCRATS who destroyed our economy in 2008.

First of all, given all the times that you’ve heard the line, “The Republicans created this mess,” ask yourself a question: when was the last time you heard an explanation as to just precisely what the Republicans did to cause the disaster?

Don’t be a lemming and a tool; read up on how Democrats loaded up GSEs Fannie and Freddie with liberals, massively increased the government ownership of the mortgage industry, engaged in incredibly risky policies even as our housing market was beginning a cyclical downturn, and then refused to allow any regulations or reform whatsoever:

With Eyes Finally Wide-Open, Reconsider Why The Economy Collapsed In The First Place

Who REALLY Exploded Your Economy, Liberals Or Conservatives?

Biden: We Misread The Economy – And It’s All The Republicans’ Fault

Want To Know Why Your Economy Blew Up?

Barney Frank And Democrat Party Most Responsible For 2008 Economic Collapse

This Blame Bush Crap Has Just GOT To End

And here’s the latest fact and the latest explanation as to just how Democrats blew up our economy:

The quotes that explain the entire financial meltdown
posted at 12:10 pm on October 12, 2008 by Ed Morrissey

For those who want a smoking gun to show the genesis of the financial collapse, this short sequence from a longer video I posted this week will do it. Clinton HUD Secretary Andrew Cuomo announced a settlement of a lending discrimination complaint with Accubanc, a Texas lender whose prerequisites for mortgages came under attack from “community organizers” at the Fort Worth Human Relations Commission and the city of Dallas. I clipped out this sequence to underscore its importance:

Watch the video.

CUOMO: To take a greater risk on these mortgages, yes. To give families mortgages that they would not have given otherwise, yes.

Q: [unintellible] … that they would not have given the loans at all?

CUOMO: They would not have qualified but for this affirmative action on the part of the bank, yes.

Q: Are minorities represented in that low and moderate income group?

CUOMO: It is by income, and is it also by minorities? Yes.

CUOMO: With the 2.1 billion, lending that amount in mortgages — which will be a higher risk, and I’m sure there will be a higher default rate on those mortgages than on the rest of the portfolio …

Here, in fact, is the genesis of the problem, the ideology that created the monster.  Cuomo, the Clinton administration, and Congress believed they had the right and the power to determine acceptable risk for the lenders, rather than lenders determining it for themselves in a free market.  Even while imposing risk standards on lenders, Cuomo admits that he expects a higher default rate on the new loans — which is why the lenders didn’t want to write them in the first place.

In other words, the CRA didn’t get used to fight discrimination, but to force lenders to give money to high-risk borrowers for political purposes.  And Cuomo knew it.

That was the political arrogance at the heart of the collapse.  However, the CRA was more a sideshow than the actual problem.  When Congress decided that enforcement alone wouldn’t generate enough mortgages to boost their political fortunes, they had Fannie Mae and Freddie Mac eliminate the risk entirely for lenders through the purchase of the subprime loans.  Without that risk and with almost-guaranteed short-term profits of subprime loans, lenders went wild while Fannie and Freddie repackaged them as quasi-government bonds for investors.

While Democrats like Barack Obama, Harry Reid, and Nancy Pelosi keep blaming “greed” for the collapse, it was Democrats like Barney Frank and Chris Dodd building that “greed” into the system in order to drive the subprime lending market.  And it was Democrats like Frank, Dodd, Maxine Waters, and Lacy Clay who suggested that regulators like Armando Falcon were racists for blowing the whistle on the Ponzi scheme they created.

The Democrats decided, as Michelle says, that mortgages were a civil right, and wouldn’t cost the American taxpayers a dime.  How well is that working out, America?  And now, the question you have to ask yourselves is this: Do you want the nation’s economic policies run by Obama, Pelosi, Reid, Dodd, and Frank for the next two years?

John Adams said, “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.”

The problem is that we aren’t a moral or religious people anymore.

We’ve become a bad people.  And bad people allow a climate in which lies dominate, and then they believe the lies they are told.

And that is why we allowed a mainstream media to fabricate an entire culture of lies, and then we believed their narrative that Republicans (who hadn’t been in power for two years in the Congress) were the party to blame.  We blamed Bush – who tried SEVENTEEN TIMES to reform and regulate Fannie Mae and Freddie Mac prior to the economic meltdown just in 2008 alone.  And Bush had called for reform and regulation of the GSEs 34 times since 2001.  And we put the very Democrats who blew up our economy by refusing to allow those reforms or regulations until after it was too late in charge of the economy that they ruined.

It was Democrats and the Government Sponsored Enterprise system Democrats created (i.e., GSEs Fannie and Freddie) that created the financial disaster; just as it is Democrats who are in total control of our government who are CONTINUING to undermine our economy now.

We gave Democrats total power.  And in just two years they have so destroyed our economy and our health care system that we may never be able to recover.

Who REALLY Exploded Your Economy, Liberals Or Conservatives?

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,” Portfolio.com, 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 activism – actively 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.