Bill Clinton. Democrats Guilty!

25 09 2008

I already had a post about Democrat’s complicity in the subprime financial crisis. I must admit I was a little bit sceptical given the partisan nature of the IBD Editorial article. But now Bill Clinton agrees:

First a little background from Fox News “Special Report”:

JIM ANGLE, CHIEF WASHINGTON CORRESPONDENT: And so shaky mortgages spread throughout the system. But in 2005, the Senate Banking Committee, then chaired by Republican Richard Shelby, tried to rein in the two organizations bypassing some strong new regulations.

PETER WALLISON, AMERICAN ENTERPRISE INSTITUTE: Which would have prevented Fannie and Freddie from acquiring this bad — these bad mortgages. It actually gave a new regulator for Fannie and Freddie the kinds of powers that a bank regulator had.

ANGLE: All the Republicans voted for it. All the Democrats, including the current chairman, Senator Chris Dodd, voted against it, and that was after Fed Chairman Alan Greenspan had issued a stark warning to senators that Fannie and Freddie were playing with fire. Greenspan said without stronger regulations, “We increase the possibility of insolvency and crisis. Without restrictions on the size of Fannie Mae and Freddie Mac, we put at risk our ability to preserve safe and sound financial markets in the United States.”

(END VIDEOTAPE)

ANGLE: Which turned out to be exactly right, but because Democrats blocked it, those new regulations never got consideration by the full Senate and died. So that’s how we got into this mess, and how we missed a chance to avoid it. Getting out of it now, of course, will be a lot more difficult — Brit.

BRIT HUME, HOST: Oh, boy. Thanks, Jim.

Two days later, former President Clinton agreed:

CHRIS CUOMO, ABC NEWS: A little surprising for you to hear the Democrats saying, “This came out of nowhere, this is all about the Republicans. We had nothing to do with this.” Nancy Pelosi saying it. She signed the ’99 Gramm Bill. She knew what was going on with the SEC. They’re all sophisticated people. Is that playing politics in this situation?

BILL CLINTON: Well, maybe everybody does that a little bit. I think the responsibility the Democrats have may rest more in resisting any efforts by Republicans in the Congress or by me when I was President to put some standards and tighten up a little on Fannie Mae and Freddie Mac.

via NewsBusters





Subprime warming

23 09 2008

“‘Global warming’ is sub-prime science, sub-prime economics, and sub-prime politics, and it could well go down with the sub-prime mortgage.” (Philip Stott, September 21)





What Democrtas don’t want you to know

22 09 2008

Do you thing Bush and Republicans are responsible for the subprime meltdown? Well not quite. It goes back to Jimmy Carter and Bill Clinton. Yet another story of Democratic road to hell paved with good intentions:

But the fact is, President Bush in 2003 tried desperately to stop Fannie Mae and Freddie Mac from metastasizing into the problem they have since become.

Here’s the lead of a New York Times story on Sept. 11, 2003: “The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.”

Bush tried to act. Who stopped him? Congress, especially Democrats with their deep financial and patronage ties to the two government-sponsored enterprises, Fannie and Freddie.

“These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Rep. Barney Frank, then 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.”

“If Congress does not act,” McCain said in 2005, “American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole.”

Sounds like McCain was spot on.

But his warnings, too, were ignored by Congress.

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. Despite warnings from GOP members of Congress in 1992, Clinton pushed extensive changes to the rules requiring lenders to make questionable loans.

Lenders who refused would find themselves castigated publicly as racists.

In the name of diversity, banks began making huge numbers of loans that they previously would not have. They opened branches in poor areas to lift their CRA ratings.

Meanwhile, Congress gave Fannie and Freddie the go-ahead to finance it all by buying loans from banks, then repackaging and securitizing them for resale on the open market.

That’s how the contagion began.

With those changes, the subprime market took off. From a mere $35 billion in loans in 1994, it soared to $1 trillion by 2008.

Wall Street eagerly sold the new mortgage-backed securities. Not only were they pooled investments, mixing good and bad, but they were backed with the implicit guarantee of government.

Fannie Mae and Freddie Mac grew to become monsters, accounting for nearly half of all U.S. mortgage loans. At the time of their bailouts this month, they held $5.4 trillion in loans on their books. About $1.4 trillion of those were subprime.

As they grew, Fannie and Freddie grew heavily involved in “community development,” giving money to local housing rights groups and “empowering” the groups, such as ACORN, for whom Barack Obama once worked in Chicago.

Warning signals were everywhere. Yet at every turn, Democrats in Congress halted attempts to stop the madness. It happened in 1992, again in 2000, in 2003 and in 2005. It may happen this year, too.

Since 1989, Fannie and Freddie have spent an estimated $140 million on lobbying Washington. They contributed millions to politicians, mostly Democrats, including Senator Chris Dodd (No. 1 recipient) and Barack Obama (No. 3 recipient, despite only three years in office).

A vote for Obama is a vote of a turkey voting for Christmas…





Why don’t they know what’s good for them?

21 09 2008

Clive Crook nails the Democratic Party and liberal media. This is equally true of Australian political establishment and Canberra media gallery. It wasn’t me who said this about Aussie political journalist: “Labor is innocent until proven guilty, while Liberals are guilty until proven innocent”. Often guilty no matter what, I may add…

Democrats speak up for the less prosperous; they have well-intentioned policies to help them; they are disturbed by inequality, and want to do something about it. Their concern is real and admirable. The trouble is, they lack respect for the objects of their solicitude. Their sympathy comes mixed with disdain, and even contempt.

Democrats regard their policies as self-evidently in the interests of the US working and middle classes. Yet those wide segments of US society keep helping to elect Republican presidents. How is one to account for this? Are those people idiots? Frankly, yes – or so many liberals are driven to conclude. Either that or bigots, clinging to guns, God and white supremacy; or else pathetic dupes, ever at the disposal of Republican strategists. If they only had the brains to vote in their interests, Democrats think, the party would never be out of power. But again and again, the Republicans tell their lies, and those stupid damned voters buy it.

It is an attitude that a good part of the US media share. The country has conservative media (Fox News, talk radio) as well as liberal media (most of the rest). Curiously, whereas the conservative media know they are conservative, much of the liberal media believe themselves to be neutral.

Their constant support for Democratic views has nothing to do with bias, in their minds, but reflects the fact that Democrats just happen to be right about everything. The result is the same: for much of the media, the fact that Republicans keep winning can only be due to the backwardness of much of the country.

If only the Democrats could contain their sense of entitlement to govern in a rational world, and their consequent distaste for wide swathes of the US electorate, they might gain the unshakeable grip on power they feel they deserve. Winning elections would certainly be easier – and Republicans would have to address themselves more seriously to economic insecurity. But the fathomless cultural complacency of the metropolitan liberal rules this out.