Who is to blame for the Wall Street Bailout?

Who is to blame

for the Wall Street Bailout?

This is the second of two pages about The Great Wall Street Bailout of 2008. On the first page, there was some lengthy discussion about bailouts and socialism and the nationalization of banks, mortgage companies, and auto makers. This page has commentary about the various factors that brought the country to brink of socialism -- and (some would say) nudged it over the edge.

The automobile industry (UAW) bailout was the result of extremely high labor costs, along with the simple fact that people don't want to pay $30,000 for an unreliable car that won't make it to 100,000 miles. But all the auto industry commentary has been moved to this page.

Congress

Congress' Financial Mess. Employees in government regulatory agencies grew from 146,139 in 1980 to 238,351 in 2007, a 63 percent increase. In the banking and finance industries, regulatory spending between 1980 and 2007 almost tripled, rising from $725 million to $2.07 billion. So here's my question: What are we to make of congressmen, talking heads and news media people who tell us the financial meltdown is a result of deregulation and free markets? Are they ignorant, stupid or venal?

We've legalized theft in America. President Obama went on Jay Leno's popular Tonight Show and talked about the current crisis. Listening to him, there seems little doubt that everything started on Wall Street. "The problem is ... people were able to take huge, excessive risks with other people's money." But, Mr. President, half the mortgages in this country are owned or guaranteed by Fannie Mae and Freddie Mac — which were and are backed up with the money of us taxpayers. An easy flowing mortgage credit market built by politicians, by setting us taxpayers up to guarantee it all, which is what we wound up doing, is what started this whole thing.

Magic Numbers in Politics. Our current economic meltdown results from the federal government, under both Democrats and Republicans, declaring home ownership to be a "good thing" and treating the percentage of families who own their own home as if it was some sort of magic number that had to be kept growing — without regard to the repercussions on other things.

Congress lives up to its 10% approval rating. America has survived a feckless political class in the past, and it will again after this week. But Monday's crash and burn of the Paulson plan on Capitol Hill reveals a Washington elite that has earned every bit of the disdain that Americans have for it. This crowd can't even make sausage. The 228-205 defeat reflects badly on all concerned, starting with the Democrats who run the House. The majority party is responsible for assembling a majority vote, and Speaker Nancy Pelosi failed in that fundamental task.

Obama Subsidizes the Wrong People. President Obama needs to say that a big part of the reason the housing market in the U.S. is so screwed up is that government has for decades been using housing as a misguided social engineering experiment. ... People did what the government-distorted economics of the housing market told them to do, and now they we have a financial mess because of it. No senior administration official has conceded that is the case. No one has said that a big part of the reason why housing is so messed up in the U.S. is because of misguided governmental meddling in this market. No one has conceded that it is not every American's birthright to be a homeowner.

Saddest Thing About This Mess: Congress Had Chance To Stop It. Could the crisis at Fannie Mae-Freddie Mac and the subprime meltdown have been avoided? The answer is yes. As early as 1992, alarm bells were going off on the threat Fannie and Freddie posed to our financial system and our economy. Intervention at any point could have staved off today's crisis. But Democrats in Congress stood in the way.

Congress Tries To Fix What It Broke. As the financial crisis spreads, denials on Capitol Hill grow more shrill. Blame an aloof President Bush, greedy Wall Street, risky capitalism — anybody but those in Congress who wrote the banking rules.

Neither a Borrower Nor Lender Be. The public's suspicion of anything proposed by Congress is well founded. Congress devotes almost all of its time and energy to the appearance, rather than the reality, of solutions. We are witnessing the disintegration of a profoundly unserious political culture in which nobody really knows what they are doing. Only when a crisis is on top of Congress does any real deliberation take place, and then — as in the case of renewed oil drilling off coast lines — the solution is essentially a conservative one, marking a reluctant return to common sense.

The Wrong Rx for Wall St.. Back in 1999, Congress opened the door to the subprime mortgage crisis when it repealed the Glass-Steagall Act, the 66-year firewall between commercial banks and investment houses. ... Though designed to lift restrictions that prevented US financial institutions from competing globally, the repeal also encouraged banks to make intemperate high-risk loans and to create exotic new financial products.

Congress Lies Low To Avoid Bailout Blame. To hear today's Democrats, you'd think all this started in the last couple years. But the crisis began much earlier. The Carter-era Community Reinvestment Act forced banks to lend to uncreditworthy borrowers, mostly in minority areas. Age-old standards of banking prudence got thrown out the window. In their place came harsh new regulations requiring banks not only to lend to uncreditworthy borrowers, but to do so on the basis of race. These well-intended rules were supercharged in the early 1990s by President Clinton.

Flashback to 1999...
Fannie Mae Eases Credit To Aid Mortgage Lending. Home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings. In July [1999], the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year [1998], 44 percent of the loans Fannie Mae purchased were from these groups.

Can Congress Fix A Problem It Caused? Nothing could more painfully demonstrate what is wrong with Congress than the current financial crisis. Among the congressional "leaders" invited to the White House to devise a bailout " solution" are the very people who have for years created the risks that have come home to roost.

Before D.C. Gets Our Money, It Owes Us Some Answers. Congress has an obligation to protect the taxpayer. Congress has an obligation to limit the executive branch to the rule of law. Congress has an obligation to perform oversight. Congress was designed by the Founding Fathers to move slowly, precisely to avoid the sudden panic of a one-week solution that becomes a 20-year mess.

The end of the American Dream. Beyond any liberal Democrat's wildest dreams, this unprecedented government-spending binge, has been enabled by a narrative. According to this narrative, we now understand that unbridled capitalism doesn't work. Unregulated markets are behind today's problems and all agree that we need more government. According to our president, because "Big banks traded in risky mortgages ... lenders took advantage of homebuyers ... homebuyers knowingly borrowed too much ..." we have today's housing crisis. But it's all so untrue. What has failed in our country is not capitalism. It is our intentional undermining of it.

False Solutions and Real Problems. There were certainly places here and there where it took half a family's income just to put a roof over their heads. ... Almost invariably, these severe local problems had local causes — usually severe local restrictions on building homes. These restrictions had a variety of politically attractive names, ranging from "open space" laws and "smart growth" policies to "environmental protection" and "farmland preservation."

Obama: Buyer's Remorse. The existing regulation of U.S. banks was not accompanied by anything faintly resembling actual scrutiny and oversight. It was the government that had created Fannie Mae and Freddie Mac to buy up and "securitize" all those bad loans banks and mortgage companies were required by law to make. The short-term spending in the billions that has been made is widely regarded as a massive waste of taxpayer dollars.

The Community Reinvestment Act / ACORN / Affirmative Action

How ACORN destroyed the housing market. Over at the Wall Street Journal, there's a very interesting article that connects the dots between ACORN, the mortgage-lending-standard-destroying Community Reinvestment Act legislation, Fannie Mae and the eventual inflation and collapse of the housing bubble in last decade.

O's Dangerous Pals. What exactly does a "community organizer" do? Barack Obama's rise has left many Americans asking themselves that question. Here's a big part of the answer: Community organizers intimidate banks into making high-risk loans to customers with poor credit. In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes — and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers.

Dems push expanded Community Reinvestment Act; deny Act's role in mortgage meltdown. A number of experts believe that aggressive enforcement of the 1970s-era Community Reinvestment Act contributed to the mortgage meltdown, and thus to the greater financial crisis, by requiring financial institutions to lend to unqualified borrowers. Now, the Democratic majority in the House of Representatives is responding to that situation by proposing to expand the scope and power of the Community Reinvestment Act.

Act From Which An Acorn Grew, And An Economy Died, Lives On. Acorn found its way into the mortgage business through the Community Reinvestment Act, the 1977 legislation that community groups have used as a cudgel to force lenders to lower their mortgage underwriting standards in order to make more loans in low-income communities. Often the groups, after making protests under CRA, were then rewarded by banks with contracts to act as mortgage counselors in low-income areas in return for dropping their protests against the banks.

The Minority Mortgage Meltdown: How The Community Reinvestment Act Fits In. The mortgage fiasco devastating America's big banks has many causes, but perhaps the least understood is the complex impact of the 1977 Community Reinvestment Act (CRA). There has been some hoopla over the CRA in recent months, but nobody seems to have noticed the subtle way the CRA actually exacerbated the disaster.

Truth In Lending. A new congressional report details how government politicized housing, wrecking the economy. Rep. Darrell Issa of California, ranking Republican on the House Oversight and Government Reform Committee, has released a report that every American should read. The analysis details how powerful Democrats in Congress insisted that government-subsidized housing be geared to serve the purposes of social justice at the expense of sound lending.

ACORN's Food Stamp Mortgages: In a circa 1999 document, "To Each Their Home: Success Stories from the ACORN Housing Corporation," the ACORN affiliate called the American Dream a sham and bragged about undermining banks' underwriting standards. ... ACORN Housing took credit for developing "several innovative strategies" to get around pesky traditional lending guidelines, which were unfair because they "were geared to middle class borrowers." Instead of using passé measures of creditworthiness such as, say, credit history and having an adequate income, ACORN convinced lenders to adopt "more flexible underwriting criteria that take into account the realities of lower income communities." Henceforth, some banks serving inner cities would accept "less traditional income sources such as food stamps."

Stop Covering Up And Kill The CRA. The Community Reinvestment Act is to blame for the financial crisis, but it so powerfully serves Democrats' interests that they'll do anything to protect it -- including revising history.

Who caused the global economic crisis? The original Community Reinvestment Act was signed into law in 1977 by Jimmy Carter. Its purpose, in a nutshell, was to require banks to provide credit to "under-served populations," i.e., those with poor credit. ... It forced banks to issue something on the order of $1.5 trillion in sub-prime mortgages. $1.5 trillion, i.e., one and a half thousand billion dollars in sub-prime, i.e., risky, mortgages, in order to push this latest example of social engineering. But wait: how did it force banks to do this? Easy. Introduce a federal requirement that banks make the loans or face penalties.

The True Origins of This Financial Crisis: Two narratives seem to be forming to describe the underlying causes of the financial crisis. One, as outlined in a New York Times front-page story on Sunday, December 21, is that President Bush excessively promoted growth in home ownership without sufficiently regulating the banks and other mortgage lenders that made the bad loans. The result was a banking system suffused with junk mortgages, the continuing losses on which are dragging down the banks and the economy. The other narrative is that government policy over many years — particularly the use of the Community Reinvestment Act and Fannie Mae and Freddie Mac to distort the housing credit system — underlies the current crisis. The stakes in the competing narratives are high. The diagnosis determines the prescription.

Capitalism didn't kill the banks — socialism did. Amid all the myriad analyses of the financial collapse, one sole premise commands universal assent: the crisis originated in the sub-prime mortgage meltdown in America. If we establish what caused that, we shall have discovered the root of the banking crisis. Well, that is easy: ... it was Bill Clinton and his cronies, with their politically correct affirmative action. That is the fact of the matter — the Clinton administration compelled the banks to lend to minorities, to comply with racial and social quotas that defied all the rules of banking.

Obama and "The Left": Although Senator Barack Obama has been allied with a succession of far left individuals over the years, that is only half the story. There are, after all, some honest and decent people on the left. But these have not been the ones that Obama has been allied with — allied, not merely "associated" with. ACORN is not just an organization on the left. In addition to the voter frauds that ACORN has been involved in over the years, it is an organization with a history of thuggery, including going to bankers' homes to harass them and their families, in order to force banks to lend to people with low credit ratings.

ACORN: Who Funds the Weather Underground's Little Brother? The Association of Community Organizations for Reform Now (ACORN) has become America's most prominent left-wing community group. Little-known until now, ACORN has played a major role in the subprime mortgage mess that has undermined Americans' support for free market problem-solving and set off a worldwide chain of financial troubles. It is also implicated in vote fraud schemes from coast to coast. ACORN aims to give America change that socialists can believe in — by any means necessary.

Social engineers are bad bankers. In 1772, the collapse of the Ayr Bank led to the Edinburgh banking crisis of that year. Only three of Edinburgh's 30 private banks survived. Adam Smith commented that "the operations of this bank seem to have produced effects quite opposite from what was intended". ... The collapse of the Ayr Bank tells us much about the present crisis.

Community Reinvestment Act: The Risk of Unintended Consequences. As policymakers consider ways to address the current mortgage crisis, it is important to evaluate new proposals with an eye toward their future effects on the economy. The unintended consequences of government programs can have far-reaching economic and social effects. ... A prime example of a public program gone awry — and one of the key causes of the current credit crisis — is the Community Reinvestment Act (CRA).

The CRA Scam and its Defenders. "Liberal" economists are overjoyed by the bursting of the housing bubble, for it provides them with what they believe is another "market failure" story. "Most analysts see the sub-prime crisis as a market failure," Robert Gordon gleefully declared in the April 7 online edition of The American Prospect magazine, edited by Robert Kuttner. Gordon does not define what an "analyst" is, and does not cite any survey to support his claim. One suspects that his opinion is based on an informal survey of his like-minded, left-wing friends.

Obama and Acorn. Acorn uses various affiliated groups to agitate for "a living wage," for "affordable housing," for "tax justice" and union and environmental goals, as well as against school choice and welfare reform. It was a major contributor to the subprime meltdown by pushing lenders to make home loans on easy terms, conducting "strikes" against banks so they'd lower credit standards. But the organization's real genius is getting American taxpayers to foot the bill.

They Gave Your Mortgage to a Less Qualified Minority. Instead of looking at "outdated criteria," such as the mortgage applicant's credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness ... Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn't a joke — it's a fact. When Democrats controlled both the executive and legislative branches, political correctness was given a veto over sound business practices.

The Financial Mess: How We Got Here. The Community Reinvestment Act was pushed hard by Bill Clinton, although it originated under Jimmy Carter. Asked about it the other day on one of the morning TV talk shows, Clinton said times back then were different. Fannie and Freddie had lots of money and he (in his infinite wisdom) decided that the money should not go to share holders or to executive compensation, but should be used to put the poor into homes. As you can imagine, wonderful things happen when the government strong arms corporations as to how they should spend their money and, better yet, how they should assess the qualifications of home buyers.

U.S. mess started with Carter. The story is one of unintended effects. And politicians who unleashed it have remained in full throttle of denying responsibility. The origin of the crisis goes back to 1977 when then president Jimmy Carter signed into law the Community Reinvestment Act (CRA) passed by the Democratic-controlled Congress. The CRA required, as the U.S. Federal Reserve Board notes, "depository institutions to help meet the credit needs of the communities in which they operate, including low and moderate income neighbourhoods, consistent with safe and sound operations." In other words, by law lending institutions were instructed to provide money as mortgages and commercial loans to underserved communities of mostly low income Afro-Americans and underprivileged minorities with poor credit history.

What Caused Our Economic Crisis? The housing bubble caused it. What caused the housing bubble? Sub-prime mortgages, risky mortgages, to low-income, bad-credit borrowers. Where did they come from? The "Community Reinvestment Act". President Jimmy Carter and the Democrats passed it in back in 1977. It gave incentives to help low-income borrowers get a home. Not a bad idea — if done right. It helped a little, but only a little — until 1995. The Clinton Administration and the Democrats in power added massive new provisions to authorize — require — sub-prime loans be made. The revisions went further, by allowing the securitization of CRA loans containing sub-prime mortgages.

Financial Affirmative Action: After [the Community Reinvestment Act] came into effect, Saul Alinsky-inspired "community organizer" groups such as Greenlining, ACORN, and National Council of La Raza got into the shakedown business. They preach the hateful class-warfare rhetoric of their fellow community organizers Jeremiah Wright, Jesse Jackson, Al Sharpton, and Michael Pfleger. They rage against capitalism and demand crushing taxes and aggressive wealth redistribution programs. They demand more government spending on social programs, a higher minimum wage, and gun control.

From a little ACORN. ACORN stands for the Association of Community Organizations for Reform Now, a busy hive of left-wing agitation and "direct action" that claims chapters in 50 cities and 100,000 dues-paying members. ACORN is where 1960s leftovers who couldn't get tenure at universities wound up. That the bill-writing Democrats remembered their pet clients during such an emergency speaks volumes. This attempted gift to ACORN (stripped out of the bill after outraged howls from Republicans) demonstrates how little Democrats understand about what caused the mess we are in.

No one's clean in this mess. The one man who truly tried to treat this crisis like a crisis — McCain — was ridiculed by Senate Majority Leader Harry Reid, who implored him to come to Washington to help in the first place. And the news media, which now treat any Republican action that threatens a Barack Obama victory as inherently dishonorable, uncritically accepted the bald Democratic lie that McCain ruined a bipartisan bailout deal last Friday.

Obama, Voter Fraud & Mortgage Meltdown. Which community activist/political organization in the United States is the largest, most radical left, and most untrustworthy? The answer is ACORN, which bills itself as the nation's largest community organization for the rights of low- and moderate-income families. Its hidden agenda, however, is to change the form of the U.S. government from a republic to a socialist oligarchy, using class warfare and the aid of radical liberals within the Democrat Party. This hidden agenda explains why the liberal newsmedia go mute on Obama's ACORN ties.

Obama shields ACORN from Criminal Prosecution in the Economic Crisis. Not only did Senator Barack Obama's presidential campaign pay more than $800,000 to a front of the Association of Community Organizations for Reform; now, ACORN, currently under investigation in a dozen States for voter registration fraud and bribery schemes, for "get-out-the-vote-efforts"; Obama co-sponsored legislation called the "Helping Families Save their Homes in Bankruptcy Act of 2007" — that was supported by ACORN and protects them.

Before the ACORN Sprouts into a Tree. As significant as the Ayers allegations are, as set forth by Stanley Kurtz in the Wall Street Journal ... the Acorn allegations may be even more significant, going to the heart of American democracy and the world economic crisis.

ACORN's Senator. 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.

More about Obama and ACORN.

Good Intentions Paved The Road To Subprime-Stoked Meltdown. For those looking for a real start to today's financial meltdown and government rescue, you need to go back — way back — to 1977, and the Jimmy Carter presidency.

How A Clinton-Era Rule Rewrite Made Subprime Crisis Inevitable. One of the most frequently asked questions about the subprime market meltdown and housing crisis is: How did the government get so deeply involved in the housing market? The answer is: President Clinton wanted it that way. Fannie Mae and Freddie Mac, even into the early 1990s, weren't the juggernauts they'd later be. While President Carter in 1977 signed the Community Reinvestment Act, which pushed Fannie and Freddie to aggressively lend to minority communities, it was Clinton who supercharged the process. After entering office in 1993, he extensively rewrote Fannie's and Freddie's rules.

Rescuing ACORN: One of the sticking points in resolving the crisis was a poison pill in the Dodd/Paulson compromise that would move 20% of profits from the bailout into the Housing Trust Fund, a slush fund for political action groups such as ACORN (the Association of Community Organizations for Reform Now) and the National Council of La Raza. ... Groups such as ACORN and La Raza lobby to secure government-funded services for their members and seek to move them to the voting booth.

O's Dangerous Pals: The seeds of today's financial meltdown lie in the Commu nity Reinvestment Act — a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades. CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in "subprime" loans to often uncreditworthy poor and minority customers.

An ACORN Falls from the Tree. I have unapologetically criticized Republicans, some by name, for out-of-control spending, lack of accountability, and other inexcusable actions that have tarnished the GOP and disserved the nation. And there are other issues that are either both parties' fault, or no one's fault. But here, the Democrats are squarely to blame. They have resisted all attempts at reforming Fannie and Freddie, and pushed those organizations to become ever more reckless in their policies.

Fannie Mae Strong-Arm Monitoring of Race. All the talk about the Community Reinvestment Act, the involvement of ACORN and the clear emphasis on developing minority home-ownership frankly comes as a surprise to me. Having grown up in and begun my career in Detroit, I was accustomed to having a large percentage of my business come from the black community. I assumed I was just getting more of the same. In hindsight, a series of conversations I had with representatives from Countrywide has become illuminating.

Obama, ACORN & Their Starring Role in the Mortgage Crisis. Barack Obama, congressional Democrats and Progressive-Left operatives — with the help of the mainstream media — have done a great job of spinning culpability for the mortgage crisis onto the Bush Administration, congressional Republicans and, in particular, John McCain. This is a notable moment in the history of political spin because as the facts present, Democrats and Progressive-Leftists — not Republicans — are the ones directly responsible for the current financial crisis in which our country is embroiled. At the center of this culpability are Barack Obama and ACORN, the Association of Community Organizations for Reform Now.

Old Soviet-era jokes have become disturbingly applicable to the U.S. After the number of "caring," bleeding-heart politicians in Washington reached a critical mass, it was only a matter of time before the government started ordering banks to help the poor by giving them risky home loans through community organizers. Which resulted in a bigger demand, which resulted in rising prices, which resulted in slimmer chances of repaying the loans, which resulted in more pressure on the banks, which resulted in repackaging of bad loans, which resulted in a collapse of the banks, which resulted in a recession, which resulted in many borrowers losing their jobs, which resulted in no further mortgage payments, which resulted in a financial disaster, which resulted in a worldwide crisis, with billions of poor people overseas — who had never seen a community organizer, nor applied for a bad loan — becoming even poorer than they had been before the "progressives" in the U.S. government decided to help the poor.

The Truth Behind the Financial Crisis: Want to know the true source of the financial meltdown in the home mortgage industry leading to the collapse of Fannie Mae and Freddie Mac and today's attendant financial crisis? Follow the money trail back about nine years. Check out this article from the September 30, 1999 edition of the New York Times. ... "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 questions about the government's role in the financial crisis. The role of the FHA is particularly difficult to fit into the narrative that the left has been selling. While it might be argued that Fannie and Freddie and insured banks were profit-seekers because they were shareholder-owned, what can explain the fact that the FHA — a government agency — was guaranteeing the same bad mortgages that the unregulated mortgage brokers were supposedly creating through predatory lending? The answer, of course, is that it was government policy for these poor quality loans to be made. Since the early 1990s, the government has been attempting to expand home ownership in full disregard of the prudent lending principles that had previously governed the U.S. mortgage market.

Government made the mess. Now clean it up. When Rep. Barney Frank, D-Mass., declared last year that "the private sector got us into this mess," he offered a solution: "The government has to get us out of it." Neither claim was true, of course, but that's the point. In order to maintain the illusion that the Obama administration can deliver an economic recovery, the role of government in causing the crisis in the first place must be obscured.

Treasury Secretary Paulson

Treasury May Bail Out Credit Card, Other Loan Industries, Paulson Says. Treasury Secretary Henry Paulson on Wednesday [11/12/2008] announced that the federal government no longer plans to buy troubled mortgage-related assets from private banks but will expand the scope of its Troubled Asset Relief Program (TARP) to include non-bank financial and credit institutions.

Hank Paulson, Naked Emperor. Treasury Secretary Hank Paulson finally confirmed what lonely bailout opponents tried to tell the American public all along: The man doesn't know what the [heck] he's doing. ... The pulled-out-of-the-posterior "$700 billion" price tag has ballooned into the trillions. The "mortgage industry rescue" has expanded to banks, insurance companies, automakers, credit card companies and possibly the entire national volume of consumer lending. Oh, and that vaunted "TARP" component, Paulson admitted this week, is nothing but a four-letter word that rhymes with TRAP.

Media Should Demand Paulson's Head. Paulson, former CEO of Goldman Sachs, is not only rich; he is supposed to be smart. Our media were surprised by his turnaround. Some are now questioning his credibility and competence. They should go further and demand his resignation. The plan was to buy troubled assets. Then the money was used to buy shares in banks. Now it's going to be used to support financial institutions offering consumer credit. Democrats in Congress want some of the money to go to the auto industry.

Hurricane Hank Plans to Strike Again. Probably the worst U.S. Treasury Secretary of all time, Henry Paulson, now wants to try and revive the housing market by forcing banks to cut interest rates on mortgages. Paulson should quit now. There's no telling how much more damage he could inflict on the economy before President Bush leaves office on January 20.

The 10 Dopiest Business and Economy Leaders of 2008: [#2] The bailout trio. Treasury Secretary Henry Paulson, Federal Reserve Chairman Ben Bernanke, and New York Federal Reserve President Timothy Geithner decided to let Lehman Brothers fail in September, triggering a global collapse of financial confidence, as well as wrecking the money and commercial paper markets. The move also led to massive hedge fund redemptions, which forced them to liquidate stocks. And don't forget the ever evolving $700 billion Paulson plan to bail out the banks.

One stimulus for sale. Remember back in October when then Treasury Secretary Hank Paulson said he had to have $700 billion — TODAY — to thaw a liquidity freeze that would prevent banks from lending? Congress haggled but gave Paulson the money in two $350 billion chunks. Paulson wanted to buy up bad assets, primarily mortgages, but changed his mind two weeks later. Instead, capital would be infused with loans and direct purchases, and the banks would use that money to start making loans again. That plan didn't work out. Instead of making loans, the banks simply kept the money (primarily to improve their balance sheets). Last week, the chairman of the bailout oversight committee told Congress the Treasury paid $78 billion more for the securities they bought than what they were worth. In other words, the banks suckered Paulson and Congress.

Obama's Pitchforks: Start with the $700 billion bailout of the banking industry last October, featuring the hysterical shrieking of the Secretary of the Treasury. Former Goldman Sachs CEO Henry Paulson's hysterical behavior caused the bottom to fall out of the markets. Business froze. People were transfixed. What did he say? The system is crashing? I don't see that in my business. Two weeks later they did as wallets slammed shut all over the world.

Republicans

"Homeownership is central to the American dream, and Republicans want to make it more accessible for everyone. That starts with access to capital for entrepreneurs and access to credit for consumers. Our proposals for helping millions of low-income families move from renting to owning are detailed elsewhere in this platform as major elements in Governor Bush's program for a New Prosperity."

— Republican Party platform, 2000
Sources: [1] [2] [3] [4]

The Editor says...
I couldn't find any further mention of this topic in the platform, so I don't know what "detailed elsewhere" meant.

Democrats

The Alchemy of Democrat Cover-ups: [Scroll down] How about all the assurances that Fannie Mae and Freddie Mac were in good order? No audits or reforms necessary, everything is just fine. How many members of Congress blocked meaningful regulation for many years? The Democrats have profited and continue to profit greatly from the two enterprises, costing the taxpayers billions. Yet a majority of Americans blame President Bush for the financial crisis.

Congressional Democrats Bankrupted the Nation. Even though the US congress has been mucking up the banking industry since 1916, few Americans are familiar with GSE's, (Government Sponsored Enterprises). As a result, the people have hired the same people who destroyed the US economy to begin with, to fix the US economy. Those people are now attempting to save the nation from complete economic collapse via the same failed economic policies that caused the crisis.

Obama Destroying the USA to rebuild it in his own image? In September 2003, then President Bush proposed that oversight of Fannie Mae be tightened. Congressional Democrats balked at the idea and vigorously opposed and blocked it. Then, in a 2006 bill, Senate Republicans created a bill calling for oversight of the Democrat-run corrupt Fannie Mae (and its partner organization Freddie Mac) US mortgage giant. At that time, those who ran Fannie Mae (again — ALL Democrats) had already been caught in an $11 billion accounting scandal. Tragically — for all of us — this bill was shelved.

Six errors on the path to the financial crisis. My list of errors has six whoppers, in chronological order. I omit mistakes that became clear only in hindsight, limiting myself to those where prominent voices advocated a different course at the time. Had these six choices been different, I believe the inevitable bursting of the housing bubble would have caused far less harm.

Who Devalued the American Dream? A half century ago, the United States was an industrial colossus — a great monument to the productive potential of a free people. Moreover, with the advent of safe, abundant, and astonishingly inexpensive nuclear energy coupled with initial rapid advances in micro science and engineering, America was poised for another, even more spectacular era of advance. If this advance had been allowed to take place, Americans could have led all of the world's people into a wonderful period of progress and prosperity, orders of magnitude beyond anything the world has ever known — and, as things stand now, may ever know.

Economy in danger when Democrats take control of government. You know, I could swear the economy was not that bad two years ago. What changed in the las two years? The Democrats, who have controlled both houses of Congress since 2006 and that man of hope and change, President-elect (Barack) Obama (who ran for president for most of the last two years), never hesitate to tell Americans how horrible the economy is after "years of failed Bush policies." The primary reason for this economic mess, which took over 30 years to bubble to the surface, began when former President Jimmy Carter signed the Community Reinvestment Act in 1977. Then former President Bill Clinton, Democrats in Congress (Barney Frank, Christopher Dodd, Chuck Schumer, et al), and the leftist group ACORN used that bill to force banks to make loans to people who couldn't pay for them.

Beyond Bill Richardson. Richardson withdrew his name from nomination for Commerce Secretary due to a grand jury investigation into possible financial dealings between his New Mexico administration and [David] Rubin's firm, CDR Financial. ... CDR also had close business ties to Freddie Mac and Fannie Mae, marketing and selling financial instruments created through low-income housing "lease to own" programs across the country.

Videotape surfaces disproving Dem lies on Fannie & Freddie. The tape clearly shows President Bush warning of the dangers in April 2001 and again in 2003, upgrading the problem as possibly going beyond housing. Calls by the White House to Congress to create an agency to regulate and supervise the two GSE's were met with resistance from the House Finance Committee Chairman, Barney Frank, who vehemently denied any problems with the two entities saying there was "no crisis." The requested legislation for controls was blocked by House Democrats and killed.

Only 26 days left for Bush-bashing. [Scroll down] But we never get to the other "partly" bits, the parts about how "Wall Street chieftains who loaded up on mortgage-backed securities without regard to the risk," and how Sen. Charles Schumer, a Democrat of New York, and Rep. Barney Frank, a Democrat of Massachusetts, did more than any other 10 men to insulate Fannie Mae from nosy regulators and effective federal supervision. Fannie and her senior executives — one of whom was (and maybe still is) Barney's special friend — grew rich on taxpayer largesse while blowing on the kindling of the fire that melted the subprime housing market.

Democrats Caused the Financial Meltdown. There is something genuinely sickening about seeing Rep. Barney Frank (D-MA), House Speaker Nancy Pelosi (D-CA), and others trying to stick President Bush and the Republicans with the blame for the financial meltdown that has put the American taxpayer in hock for the problem they created. One need only read The New York Times, September 30, 1999 article by Steven A. Holmes, headlined "Fannie Mae Eases Credit to Aid Mortgage Lending." Only it didn't aid anything. Instead, it abandoned rational, prudent, established guidelines for lending; not the least of which is that you don't make loans to people who are unlikely to repay them.

Corporate welfare's new clothes: The current financial crisis is often incorrectly blamed on a laissez-faire approach to regulation. But only if one forgets it was the U.S. federal government in the 1970s under president Jimmy Carter which first pressured banks to lend to Americans who were high credit risks, pressure then upped in the 1990s under Bill Clinton and subsequently defended by too many Democrats and Republicans alike in past eight years.

Person of the Year: [SEC Chairman Christopher] Cox, a former Republican congressman himself, simply did nothing, allowing bad mortgages to be traded like sports cards as he fiddled in his lavish office. [Congressman Barney] Frank and [Senator Chris] Dodd, as finance chairmen in the House and Senate respectively, actually promoted irresponsible mortgages in the name of "inclusion" — the liberal concept of giving people stuff if they can't buy it. Dodd also took a sweetheart mortgage from since-failed Countrywide Financial, which saved him close to $100,000. And Frank publicly said Fannie Mae and Freddie Mac were in "good shape going forward," just weeks before both government entities collapsed. I'd say these three had quite an impact in 2008.

Waiting for Dodd: Where are those Countrywide papers? With the opening of the 111th Congress yesterday, all of Washington is tingling with the allure of a fresh start. Not so fast. We've got some leftover business from the 110th Congress — namely, Chris Dodd's July 2008 promise to release the details of his sweetheart loans from Countrywide Financial. The Connecticut Senator got favored treatment from the subprime mortgage purveyor, even as he was a power broker on the Banking Committee that regulates the industry.

Dodd, At It Again. Sen. Chris Dodd's proposed overhaul would replace the Federal Reserve with a "super regulator" to oversee the banking and financial industries. Will it work? Consider the source. Along with fellow Democrat Barney Frank, now chairman of the House Financial Services Committee, Dodd, who heads the Senate Banking Committee, has done as much to damage this nation's financial system as anyone...

Obama's Chief of Staff Pick Took Campaign Contributions from Wall Street. President-elect Barack Obama's choice for White House chief of staff is one of the biggest recipients of Wall Street money in Congress, according to a Washington, D.C.-based "money-in-politics" watchdog group. The Center for Responsive Politics has issued a report highlighting millions of dollars in campaign contributions that Rep. Rahm Emanuel (D-Ill.) has raised from individuals working in the hedge fund industry, private equity firms, and large investment firms.

Emanuel Was Director Of Freddie Mac During Scandal. President-elect Barack Obama's newly appointed chief of staff, Rahm Emanuel, served on the board of directors of the federal mortgage firm Freddie Mac at a time when scandal was brewing at the troubled agency and the board failed to spot "red flags," according to government reports reviewed by ABCNews.com.

Obama transition members have Fannie ties. President-elect Barack Obama's transition team leaders for the State Department are both Clinton-era department officials with links to the troubled mortgage giant Fannie Mae. Tom Donilon, a lawyer who was one of President Bill Clinton's State Department spokesmen and its chief of staff, was a top lobbyist for Fannie Mae from 1999 to 2005.

Shame on You! Starting with Lyndon Johnson's Great Society program, the U.S. Congress created numerous market disruptions in the form of social justice, pro-union and environmental laws. Ask anyone who has observed the downfall of the American auto industry about the impact of punitive environmental regulations and pro-union policies on the competitiveness of Ford, Chrysler and General Motors. Take a good hard look at the long-term effects of Jimmy Carter's 1977 Community Reinvestment Act and the Clinton Administration's influence at Fannie Mae and Freddie Mac to find the root cause of the sub-prime mortgage disaster.

Would the Last Honest Reporter Please Turn On the Lights? [Scroll down slowly] I have no doubt that if these facts had pointed to the Republican Party or to John McCain as the guilty parties, you [reporters] would be treating it as a vast scandal. "Housing-gate," no doubt. Or "Fannie-gate." Instead, it was Senator Christopher Dodd and Congressman Barney Frank, both Democrats, who denied that there were any problems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, and who were still pushing for these agencies to go even further in promoting sub-prime mortgage loans almost up to the minute they failed.

Frank, Dodd Will Fix Banking Regulation But Good. Members of Congress are plumping their feathers, holding press conferences and congratulating themselves for a job well done. Not that they need an excuse. This time, though, they're celebrating the completion of a draft bill to overhaul the financial regulatory system.

Maxine Waters Caught Lying About Fannie Mae Ties on 'Real Time'. Maxine Waters, a key Democrat congresswoman that has been implicated in blocking government oversight that could have prevented the current financial crisis, was caught lying Friday evening [10/10/2008] about her connection to failed lenders Fannie Mae and Freddie Mac.

The Price of Political Correctness. While Republicans have tepidly tried to rein in Fannie and Freddie, Democrat Barney Frank repeatedly said these institutions were sound. In 2005, a Republican reform passed the Senate Banking Committee on a party-line vote, only to be blocked by Democrats from passing the full Senate. If the Democrats had let the 2005 legislation come to a vote, the huge growth in the subprime loan portfolios of Fan and Fred would not have occurred, and the scale of the current financial crisis would have been much less. But that would require some measure of congressional accountability and responsibility. Good luck on that ever happening. Fannie and Freddie's top campaign contributions went to Chris Dodd and Barack Obama, at $165,000 and $126,000, respectively.

The IRS Will be Hiring. It is essential to remember that the current crisis is entirely the creation of Democrats. Starting with Roosevelt's New Deal programs, exacerbated by Jimmy Carter's and Bill Clinton's exploitation of Fannie Mae and Freddy Mac, ignored by congressional oversight, the Democrats own this one. It's no comfort that Speaker Nancy Pelosi cannot wait to get the House to enact a bushel of new spending bills.

Pro-Obama Ohio Secretary of State Refuses to Stop Voter Fraud. [Scroll down] In its 232 year history, the United States of America has never been so assaulted by those who would destroy it than has occurred recently. And these enemies of the USA are her enemies from within. ... Democrat elected officials Barney Franks, Chris Dodd, Barack Obama and his organization ACORN have been directly tied to the current world financial crisis. This occurred via the Democrats' personal slush funds Fannie Mae and Freddie Mac and their constant intimidation and threats directed towards banks to make bad loans to people who could not afford to buy homes.

Where was Congressman's Henry Waxman's Oversight Committee during all this turmoil? Henry Waxman (D-California) has spent the last year or so investigating White House E-mails, global warming, the Clean Water Act, District of Columbia gun laws, and HIV/AIDS, instead of financial industry practices.

Whitewashing Fannie Mae: Henry Waxman's House Committee on Oversight and Government Reform met Tuesday [12/9/2008] to examine "The Role of Fannie Mae and Freddie Mac in the Financial Crisis." Alas, Mr. Waxman didn't come to bury Fan and Fred, but to bury the truth.

Both Sides of the Financial Crisis: Of late, at least in conservative quarters, reports have made clear how much of the current financial crisis may be laid at the feet of Democrats and their social engineering policies. ... [At the same time] Software boffins employed by the big investment banks found one after another way to fold mortgages into bond-like investments, and those instruments got more and more complicated.

Chuck's Chutzpah: Schumer, after all, was a chief cheerleader for the feds' last major attempt to protect a sector of the economy from the rigors of the market. That, of course, was the housing market — inflated to unsustainable heights, largely by the irresponsible mortgages given implicit government backing through Fannie Mae and Freddie Mac. And that recklessness was given what amounted to a congressional stamp of approval by legislators smitten with the idea of increasing poor and minority home ownership.

Anatomy of a Scandal: Jimmy Carter: In a June 16, 1976 presentation to the Democrats' platform committee, Carter promised that America under a Carter administration would help the poor by putting "Greater effort to direct mortgage money into the financing of private housing." Bill Clinton and Al Gore: Writing in their 1992 campaign book Putting People First, the two promised if elected they would: "Ease the credit crunch in our inner cities -- to prevent redlining (and) require financial institutions to invest in homes in their communities."

Fannie, Freddie, and the Left. As evidenced by Barack Obama's rise in the polls immediately following the financial collapse of mortgage giants Fannie Mae and Freddie Mac, few Americans understand that for many years Fannie and Freddie have been, first and foremost, tools of Democratic politicians, funders of the Democratic Party, and, in the words of a former Fannie CEO, the intimate "friends" and "family" of the Democratic Party's left wing.

Blame the bubble on FDR, Jimmy Carter and Bill Clinton. 1938: As part of the New Deal, president (Franklin D.) Roosevelt creates Fannie Mae and in 1970 Congress creates Freddie Mac. ... 1989: The American government step(s) in and pay(s) for the savings and loan crisis, which sets a precedent. 1995: The Community Reinvestment Act is revised so that banks and thrifts are forced to give home loans to low and moderate-income households as well. ... All those who now think that the solution is to give more powers to politicians, authorities and central banks should look at what they did with the powers they already had.

Struggling Banks Paid President Clinton $2.1 million for 'Speeches'. Four major banks, including one that collapsed, two that received federal bailout money and one that filed for bankruptcy this past September, paid former President Clinton $2.1 million for 13 speeches he delivered on their behalf between 2004-2007, according to Senate financial disclosure statements filed by Sen. Hillary Clinton (D-N.Y.). Citigroup paid Bill Clinton $700,000; Goldman Sachs paid $950,000; Lehman Brothers paid $300,000 and Merrill Lynch paid $175,000 to the former president for speeches during that time period.

The Right Stuff — and the Wrong. Obama makes a final point by blasting the failure of "common-sense regulation and oversight," to the financial system. He ought to bring this up with fellow Democrats in Congress. In the 1990s, Rep. Barney Frank blocked key reforms even as he took campaign cash from banking interests. In 2004, President Bush attempted to revive the reforms, but Democrats blocked them. Today's bank crisis isn't due to the inherent evil of the private sector, as Obama claims. It's due to Democratic leaders who were bought off by political donations and hostile to reform. Obama, curiously enough, is one of the top recipients of cash from Fannie Mae and Freddie Mac.

Dispelling The 'Deregulation' Myth. Thank heaven for Gramm-Leach-Bliley. If you've been listening to the fulminations from Congress and the campaign trail, you know that we're talking about the 1999 law that dismantled the Depression-era barriers between commercial and investment banking. Democrats largely supported it at the time, and one of their own, Bill Clinton, signed it. Now they frame it as a Republican bill that helped send the nation on the path to perdition.

Bank Meltdown Began With Clinton, Nader Says. The road to the current financial crisis on Wall Street began when then-President Bill Clinton signed the Financial Services Modernization Act of 1999, presidential candidate Ralph Nader told a 300-plus member rally at the University of Arkansas rally Thursday. That bill removed a 60-year ban on investment banks getting into mortgages and other business whose current meltdown is causing those financial institutions to fail, Nader said.

Wall Street Fat Cats Aren't at Fault This Time. [Scroll down] The fine print to this noble intent was an ill-conceived loosening of standards. For instance, the Clinton administration reinterpreted the Jimmy Carter-era Community Reinvestment Act to politicize lending practices. Under the CRA, the government forced banks to prove they weren't "redlining" — i.e., discriminating against minorities — by approving loans to minorities and various left-wing "community group" shakedown artists whether they were bad risks or not.

Paradigms Lost. Where is it written that when members of Congress screw up big time — like, say, Wall Street executives — only the Wall Streeters are going to be investigated? ... But yes indeed, our friends Senator Chris Dodd, chairman of the Senate Banking Committee and recipient of a cushy deal from Countrywide Financial, is going to look into all of this. So too will Congressman Barney Frank over in the House, where he used his perch on the Financial Services Committee, of which he is now chairman, to shield Fannie Mae from calls for tightened regulations.

Dodd and Countrywide: Former Lehman Brothers CEO Dick Fuld was under oath Monday when he was grilled on Capitol Hill about his role in the current financial meltdown. But if Members really want to understand the credit mania, they should also call Chris Dodd.

Accountability. It is a funny — though not ha-ha funny — double standard: When the GOP ran the show, it was always held responsible for every "bad" outcome. Now that the GOP is in the minority, it's still held responsible for every "bad" outcome. I suppose it's a similar standard that somehow allows the Democrats in charge of overseeing the financial sector to whine that there hasn't been enough oversight without even the slightest sting of embarrassment.

Give Us Our Money Back. We'll Fix It! The president, John McCain and congressional Republicans were sounding the alarm on this looming crisis ever since 2001. In fact, the GOP controlled Senate passed a bill out of committee in 2005 increasing oversight on Fannie Mae and Freddie Mac only to see it stonewalled by the Senate Democrats when it came time to move it out of committee and to the Senate floor for a vote.

The Cause of the 2008 Financial Crisis. Barack Obama has received more campaign donations that any other politician in the past three years from Fannie Mae and Wall Street. [Fannie Mae & Freddie Mac] have been virtually private piggy banks of campaign contributions for Democrats for the past 10 years. Yes, a token amount went to some Republicans. And there is plenty of blame to go around in this financial crisis, but the reason it happened was 100% caused by a Democrat run government that forced a liberal policy initiated by President Clinton and reforms primarily blocked by Democrats. One would never know this by watching the news or reading newspapers.

The Democrats keep digging the hole deeper.
Weiner Gets Hard Slap. A leading congressional Republican lambasted Democratic New York Rep. Anthony Weiner yesterday [6/24/2009] for calling on Fannie Mae and Freddie Mac to lower lending standards even though defaults on mortgage loans are widely blamed for the nation's current economic crisis.

Barney Frank

The Worst Predictions About 2008: [#3] "I think this is a case where Freddie Mac and Fannie Mae are fundamentally sound. They're not in danger of going under I think they are in good shape going forward." — Barney Frank (D-Mass.), House Financial Services Committee chairman, July 14, 2008. Two months later, the government forced the mortgage giants into conservatorships and pledged to invest up to $100 billion in each.

Media Mum on Barney Frank's Fannie Mae Love Connection. Prominent Democrats ran Fannie Mae, the same government-sponsored enterprise GSE) that donated campaign cash to top Democrats. And one of Fannie Mae's main defenders in the House — Rep. Barney Frank, D-Mass., a recipient of more than $40,000 in campaign donations from Fannie since 1989 — was once romantically involved with a Fannie Mae executive. The media coverage of Frank's coziness with Fannie Mae and his pro-Fannie Mae stances has been lacking.

Lawmaker Accused of Fannie Mae Conflict of Interest. Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank's efforts to deregulate Fannie Mae throughout the 1990s. So did Frank's partner, a Fannie Mae executive at the forefront of the agency's push to relax lending restrictions. Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannie's assistant director for product initiatives.

McCain/Palin Could Win this Election by Exposing the Trillion Dollar Scam. This is a trillion dollar scam, and all the politicians in Congress, the ACORN mafia, the people who played the market on unsecured mortgages, and the scam artists who were hired by Freddie and Fannie -- they all knew it. In case you haven't been watching, that includes all of Barack Obama's "home mortgage advisors" -- Franklin Raines, Jim Johnson and Jamie Gorelick. It includes Senate Banking Committee members like Chris Dodd. It includes House members like Barney Frank.

Herald readers put blame on Barney Frank. When it comes to the Wall Street meltdown, Rep. Barney Frank is considered the engineer of the financial train wreck, a bostonherald.com instant poll shows. Frank (D-Newton), chairman of the House Financial Services panel, is plastered with blame even more so than President Bush or former fed chief Alan Greenspan.

Frank's fingerprints are all over the financial fiasco. Barney Frank's talking points notwithstanding, mortgage lenders didn't wake up one fine day deciding to junk long-held standards of creditworthiness in order to make ill-advised loans to unqualified borrowers. It would be closer to the truth to say they woke up to find the government twisting their arms and demanding that they do so — or else.

Barney Frank's Bankrupt Ideas: Democrats created the mortgage crisis by forcing banks to give loans to people who couldn't afford them. Now Obama and Biden want bankruptcy judges to bail out the same deadbeat homeowners. And once again, Barney Frank is helping.

Better not bank on Barney Frank. The Subprime Panic of '08 and its $1 trillion (and rising!) price tag is too big to blame on any one man. But if we had to, it would be Newton's own Rep. Barney Frank.

Reckless Mortgages Brought Financial Market to Its Knees. The Wall Street Journal quoted Congressman Barney Frank in 2003 as criticizing Greg Mankiw, chairman of President Bush's Council of Economic Advisers, "because he is worried about the tiny little matter of safety and soundness rather than 'concern about housing.'" The changes in underwriting standards were pushed to accomplish what many called a "noble goal" — an increase in home ownership among poor and minority Americans — but the changes created a time bomb that was set off as soon as property values began to decline.

What Barney Frank Doesn't Grasp: Lending Mandates Hurt The Poor. House Financial Services Chairman Barney Frank has suggested that linking the banking crisis to the high-risk bank lending mandates of the Community Reinvestment Act and the "affordable" housing goals set by Congress for Fannie Mae and Freddie Mac constitutes a Republican effort to scapegoat poor, minority households that took out such mortgages. Frank says such people are the victims, not the cause.

The new villains: Dodd and Frank? John McCain and his Republican allies have elevated as political villains an unlikely pair to deflect blame for the slumping economy. During a town hall in Wisconsin on Thursday, McCain called Senate Banking Chairman Christopher J. Dodd (Conn.) and House Financial Services Chairman Barney Frank (Mass.) "willing co-conspirators" in the current financial collapse.

Liberals Lie, Conservatives Die... Laughing. Even if we choose to overlook the obvious fact that [Barney Frank] did nothing to avert the disaster during the year-and-a-half he and his liberal colleagues held the reins, the truth is that the Democrats brought on the financial catastrophe by forcing the major lenders to do business with black and Hispanic deadbeats, and by intimidating the gutless Republicans on the Committee with threats of outing them as racists if they didn't play ball.

The 10 Dopiest Business and Economy Leaders of 2008: [#7] Barney Frank. This is a quote, from 2003, that the Massachusetts Democrat would like to have back: "These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Turns out that the two government-sponsored entities were walking farther and farther out onto thin financial ice. And as late as last year, Frank wanted Fannie and Freddie to take on even more subprime risk.

Barney Frank's hypocrisy: Ah, the dirty little secret is out. That $700 billion TARP (Troubled Asset Relief Program) bill was in part simply a variation on congressional pork — except this time the recipients were banks with friends in high places. One of those powerful friends was Rep. Barney Frank (D-Newton), chairman of the House Financial Services Committee.

Democrats buried mortgage scandal under the rug five years ago!. From the New York Times, September 11, 2003: "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."

Who is Barney Frank? In 1991, Barney Frank received an official reprimand for reflecting "discredit upon the House." The reprimand came as a result of his relationship with a man named Steve Gobi, a male prostitute whom Frank initially paid $80 for sex. Frank later took Gobi to live with him in his home, making him a personal aide. He paid him $20,000 in compensation (unreported to the IRS) and let him use his car. Subsequent investigation revealed that in the course of their relationship, Frank used his congressional office and stationary to fix Gobi's 33 parking fines. Frank also used his congressional letterhead to write a reference letter to Gobi's probation officer — Gobi was under court supervision as a convicted felon with a prison record — in which he gave false information. Most damningly, the investigation found that Gobi ran a prostitution ring from Frank's home. In his defense, Frank asserted he knew nothing of Gobi's illicit enterprise.

Let The Inquisition Start With Frank. Congressman Barney Frank says he wants some of those responsible for our current financial meltdown to be prosecuted. And we couldn't agree more.

Barney Frank Named 'Porker of the Month' by Government Watchdog. Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, has been named "Porker of the Month" by Citizens Against Government Waste (CAGW) because of his criticism of bonuses for AIG employees while Frank himself has supported bailouts for failing banks and lenders.

Deception is the Root Cause of America's Ills. Rep. Barney Frank, the ranking Democrat on the Financial Services Committee, said: "These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing." Other congressmen gave similar assurances. Unfortunately for our nation, the forces pushing for "affordable" housing won the day and saddled us with today's unprecedented financial disaster.

Rebuttal by Barney Frank:
A Congressman Takes Issue With IBD. "The recent Investor's Business Daily editorial attacking me for urging prosecution of people who commit mortgage fraud rewrites history as grotesquely as anything I have encountered."

A Frank Assessment of Barney Frank: Barney Frank wants credit for putting out a fire that he helped to start.

Barney Frank's Double Indemnity: Barney Frank's track record as a financial analyst is, shall we say, mixed. The House Financial Services Chairman said for years that a collapse of Fannie Mae and Freddie Mac would pose zero risk to taxpayers. For most people, a mistake of that magnitude would trigger introspection, if not humility. But not the sage of Massachusetts. He's cooking up another fantastic subsidy — and like the last one, he swears taxpayers won't feel a thing. In his words, "it would cost the federal government zero." Uh oh.

Somewhat related...
Barney Frank Lies About ACORN. The stimulus legislation originally set aside $5.2 billion that could flow directly or indirectly into the coffers of ACORN and its liberal friends. The $5.2 billion was chopped down to $3 billion in the version of the bill that President Obama signed into law on February 17. The $3 billion consists of $2 billion in funds set aside for the redevelopment of abandoned and foreclosed homes and $1 billion in Community Development Block Grants (CDBG). CDBG is good old-fashioned graft.

The Blame Game. When the housing boom was going along merrily, Congressman Barney Frank was proud to be one of those who were pushing Fannie Mae and Freddie Mac into more adventurous financial practices, in the name of "affordable housing." In 2003 he said: "I believe that we, as the Federal Government, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals." He added: "I want to roll the dice a little bit more in this situation towards subsidized housing." In other words, when things were looking good, he was happy to acknowledge the role of the federal government in pushing the housing market in a direction it would not have taken on its own. But, after the risky mortgage-lending practices fostered by government intervention led to massive defaults and foreclosures that caused financial institutions to collapse or be bailed out, Congressman Frank changed his tune completely.

Real Genius. Congressman Barney Frank (D-MA) ... it should be recalled, was one of Fannie Mae's and Freddie Mac's staunchest defenders, shielding them from scrutiny and oversight right up until they collapsed. And at that point he had the audacity to blame their failure not on those who had enabled the misconduct, but on those who had tried — and failed, thanks to Frank and his allies — to rein those bodies in. Well, Frank is back to his old games. He's leaning on Fannie and Freddie to ease restrictions on new condominium mortgages.

Barney the Underwriter. Back when the housing mania was taking off, Massachusetts Congressman Barney Frank famously said he wanted Fannie Mae and Freddie Mac to "roll the dice" in the name of affordable housing. That didn't turn out so well, but Mr. Frank has since only accumulated more power. And now he is returning to the scene of the calamity — with your money.

Barney's Back. To Barney Frank, Fannie and Freddie are essentially taxpayer-funded social-service agencies whose mission is to turn all Americans into homeowners — whether or not they can afford it.

Barney Frank: Let's spend TARP profits before taxpayers can get them. "It is worth noting that in the first round of repayments from these [TARP recipients], the government has actually turned a profit," the president said. Indeed, TARP supporters have long held out the hope that the program might be profitable. But now Rep. Barney Frank, the chairman of the House Financial Services Committee, has come up with a proposal to spend any TARP profits before they can be returned to the taxpayers.

Somewhat relevant:
Barney Frank Present When Partner Arrested for Pot. Rep. Barney Frank admitted Friday [11/6/2009] that he was sitting on the porch of his partner's Maine home when police came to arrest his partner for marijuana possession. Frank, responding to new reports that he was present during the Aug. 2007 arrest of James Ready, said in a statement he was unaware Ready had marijuana plants.

The Editor says...
Let's see a show of hands. How many of you believe that Barney Frank didn't know there was marijuana growing in his "partner's" house?

Nancy Pelosi

Nancy's Disaster. House Speaker Nancy Pelosi just couldn't control herself yesterday [9/29/2008], savaging President Bush and blaming "right-wing ideology" as the sole cause of the nation's fiscal turmoil. Whereupon bipartisan compromise legislation intended to resolve the nation's financial crisis went poof. And then the stock market posted its single largest one-day point loss ever.

A job for the right woman. If there's still room under the bus where Barack Obama throws his discards — his white granny, the Rev. Jeremiah Wright, Tony Rezko, William Ayres, Bernadine Dohrn and even Hillary Clinton — that's the right place for Nancy Pelosi. The congressional bailout of Wall Street, as unpopular as it is, was nevertheless headed for grudging acceptance Monday until Mzz Pelosi, the dowager queen of the San Francisco Democrats (where there are many queens), killed it with a particularly mean-spirited attack on the Republicans whom the Democrats were counting on to join them for just this one bipartisan vote.

House Republicans Blame Pelosi's Speech. House Republicans blamed the failure of the $700 billion Wall Street rescue plan Monday on House Speaker Nancy Pelosi (D., Calif.), saying that Pelosi had been too partisan in a floor speech prior to the vote.

Excerpts from House speaker Pelosi's speech. Republicans in the US House of Representatives blamed Democratic speaker Nancy Pelosi for the failed bail-out vote, claiming she made a partisan speech near the end of a debate on the rescue plan.

Did someone mention Nancy Pelosi?

The United Auto Workers

See this page.

Everybody else

The Keynes Bubble. The financial crisis, which reached its most acute phase just a year ago with the failure of Lehman Brothers, has resulted in some humiliation, or at the very least severe criticism, for academic economists who are said to have missed the whole problem and thereby contributed to its severity. The criticism comes from those who ask, in essence, "How could it have happened if you're so smart?"

The Culprit Is All of Us. We are in this mess largely because critical thought and moral judgment have been subordinated to the politicization of our economy, resulting in regulatory gaps and excessive controls of the wrong kind. Government regulations should be limited to those that increase and protect transparency and competition, protect public and private property, promote individual responsibility and enforce equal opportunity under the law. Even if the right laws and regulations could be found, they would prove insufficient to protect freedom and prosperity.

The Root of the Wall Street Debacle. There is no finer way to destroy bourgeois society, said Lenin, than to debauch the currency, a policy that he therefore favoured. ... When I was growing up (and I am not yet an ancient man), many of the coins we used were a hundred years old, and some were a hundred and thirty years old. Occasionally, indeed, one would find a pre-Victorian coin amongst one's change. This was not entirely absurd: for, to take a single example, it cost only two and a half times as much to post a letter as it had a hundred and twenty years earlier. Now it costs 77.8 times as much in nominal terms. Most of the debauchery of the currency, then, has occurred in my lifetime.

Time: 25 People To Blame For The Financial Crisis. As the co-founder and former CEO of mortgage-lender Countrywide, Mozilo played a significant role in the current mortgage crisis. Time ranks him their #1 person to blame for the economic mess.

Former Wall Street computer whizz Michael Osinski admits his work broke the banks. Michael Osinski, a former Wall Street computer programmer whose fancy software helped bring the banks to near collapse, says he is dismayed at the financial whirlwind.

A new Keating Five? William Black, a former thrift regulator who helped blow the whistle on the savings and loan crisis in the 1980s, said the chain of transactions from "liar's loans" and other subprime mortgages to the derivatives based on them and the triple-A ratings assigned to them constituted fraud because there was an intent to deceive. Black, now a professor at the University of Missouri, described the chain of loans as a kind of reverse Ponzi scheme that the participants were aware would someday blow up.

Our Monetary Mayhem Began With the Fed. Nearly all Americans know they are plagued by inflation. In 1962, a postage stamp cost four cents, a candy bar a nickel, a movie ticket 50 cents, and a pair of tennis shoes $5. A new imported Renault automobile cost $1,395, annual tuition at Harvard was $1,520, and the average cost of a new house $12,500. Over the last century, a dollar's purchasing power has declined over 95 percent — i.e., it won't buy what a nickel did in 1909.

Did Bernanke Cause the Financial Crisis? Fed Chairman Bernanke is up for reappointment next year, and the questions are beginning in earnest about how he's handled monetary policy. Some of the best-informed people out there insist that the cause of the housing bubble and the subsequent crash was an episode of low interest rates during 2003 and 2004, as the U.S. economy was recovering from the post-9/11 recession. Alan Greenspan was the Fed Chairman at that time, but Bernanke was prominent among the Fed's governors, and fully supported the loose policy.

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