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Facts About the Economic Bailout That Make Democrats Cringe October 6, 2008

Posted by Daniel Downs in Barak Obama, campaign finance, capitalism, Congress, Democrats, economy, George W. Bush, Joe Biden, John McCain, morality, news, politics, Republicans, socialism.
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On October 4, Real Clear Politics published an article by Thomas Sowell titled “Do Facts Matter?” In his commentary, Sowell outlines some pretty damning facts incriminating Congressional Democrats for creating the economic disaster America still faces. The following are some rather juicy excerpts:

“It was liberal Democrats, led by Senator Christopher Dodd and Congressman Barney Frank, who for years– including the present year– denied that Fannie Mae and Freddie Mac were taking big risks that could lead to a financial crisis.”

“It was Senator Dodd, Congressman Frank and other liberal Democrats who for years refused requests from the Bush administration to set up an agency to regulate Fannie Mae and Freddie Mac.”

“It was liberal Democrats, again led by Dodd and Frank, who for years pushed for Fannie Mae and Freddie Mac to go even further in promoting subprime mortgage loans, which are at the heart of today’s financial crisis.”

“Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush’s Secretary of the Treasury, five years ago.”

Sowell continues by addressing the issue of Democrats being against greedy CEOs and for the people. However, Democrats defended Frank Raines who was ousted a head of Fannie Mae for mismanaging it into financial crisis. Raines racked in $90 million a year a CEO of fat Fannie. So Congressional Democrats really do not care about CEO greed as long as it their man ripping off the the system.

If gets even better!

Even after he was deposed as head of Fannie Mae, Franklin Raines was consulted this year by the Obama campaign for his advice on housing!

Even more interesting is the the implications that Raines was instrumental in the Fannie Mae’s campaign contributions to Obama, which was second only to Christopher Dodd, according to Sowell.

Sowell’s point is this: The accusations made by Obama, Biden, and the Democratic party that Bush’s “right-wing: ideology and deregulated financial markets are to blame is patently false. Democrat-led easy money, sub-prime loan policy debacle is largely to blame for the near-depression crisis.

If you look carefully at the $700+ billion bailout, most Democrats were strongly behind the taxpayer fix for their own mismanagement of national economic policy. Democrat party socialism is definitely a problem in a nation built on moral capitalism. As long the moral aspect was maintained the problem of human greed was kept in check. That check that keeps man-made economic policies and practices balanced needs to be restored. It Senator John McCain and Governor Sarah Palin who are promising to do just that.

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1. smrstrauss - October 6, 2008

Re:
#
“Here’s A Thought!

Short selling is not just betting on losers but losers betting on a future built of junk. In non-market terms, our current financial crisis is the result of a nation of people led by losers who sell the American public short.”

I see that you are opposed to short-selling. As an investor who has from time to time gone short, I think you are making a big mistake. First short-selling helps increase the liquidity of markets, which is an economic benefit. Second, I think it is a civil right. I think we should even allow people to let their 401ks and IRAs go short.

Sadly, some part of the current economic mess is due to The Bush Administration (though the SEC) forbidding us to go short on the financial companies. This is said to be merely a temporary measure, but we’ll see.

By the way, some of the mess is due to Fannie and Freddie naturally, but it seems to me that an Administration that sent $12 billion to Iraq in the form of shrink-wrapped $100 bills, and then when they were all lost or stolen, no one could be found to take responsibility (http://www.guardian.co.uk/world/2007/feb/08/usa.iraq1), well, it seems to me that these guys were not likely to be the brightest of bulbs in managing the economy. And, the Bush administration shares with the Democrats the eagerness to expand lending to minority areas:

Quotes:

HUD Sets New Goals For Fannie, Freddie
Funds for Lower-Income Buyers to Rise

By David S. Hilzenrath
Washington Post Staff Writer
Tuesday, November 2, 2004; Page E02

Fannie Mae and Freddie Mac will have to increase their funding of mortgages for low- and moderate-income home buyers, under a new rule the Department of Housing and Urban Development announced yesterday.

Under the rule, for example, the goal for low- and moderate-income home buyers would be raised from the current 50 percent to 56 percent in 2008 — 1 percentage point less than the 57 percent goal HUD proposed in the spring. The goal for loans in so-called underserved areas would increase from the current 36 percent to 39 percent in 2008, instead of the 40 percent that HUD had proposed.

The department lowered the goals slightly because it decided to use a different source of data to measure the market’s overall performance, said John C. Weicher, assistant secretary for housing and Federal Housing Commissioner. To meet the new goals, Fannie and Freddie will need to buy over the next four years an estimated 400,000 more qualifying loans than the 10 million loans they otherwise would have bought, Weicher said.

The rule was intended to make the giant government-sponsored companies match or lead the mortgage industry in funding for the target markets, HUD officials said. The department has alleged that, despite their federal charters and government-conferred privileges, Fannie and Freddie have lagged the industry in the percentage of their business devoted to groups such as minority first-time home buyers.

Freddie Mac spokeswoman Sharon McHale said the new goals may be so high that the company will be forced to reduce its funding for other borrowers, potentially “making it harder for workforce families and working families with children to get a mortgage.”

Fannie Mae “will be working with HUD and our housing partners to minimize any unintended consequences for housing that may result from the new goals,” spokesman Charles Greener said.

Fannie and Freddie have said that it would be hard to meet the proposed percentages in years when there is a big demand for them to fund refinancings for people who already own homes. HUD said it will seek more public comment on that issue and consider addressing it with a separate rule….(http://www.washingtonpost.com/wp-dyn/articles/A17090-2004Nov1.html)

And the goal of expanding homelending and expanding loans to the minorities was personally shared by George Bush, who said in 2003.

Quotes:

President Bush Signs American Dream Downpayment Act of 2003

I am here today because we are taking action to bring many thousands of Americans closer to owning a home. Our government is supporting homeownership because it is good for America, it is good for our families, it is good for our economy.

One of the biggest hurdles to homeownership is getting money for a down payment. This administration has recognized that, and so today I’m honored to be here to sign a law that will help many low-income buyers to overcome that hurdle, and to achieve
an important part of the American Dream.

This administration will constantly strive to promote an ownership society in America. We want more people owning their own home. It is in our national interest that more people own their own home. After all, if you own your own home, you have a vital stake in the future of our country. And this is a good time for the American
homeowner. Today we received a report that showed that new home construction last month reached its highest level in nearly 20 years.

The reason that is so is because there is renewed confidence in our economy. Low interest rates help. They have made owning a home more affordable, for those who refinance and for those who buy a home for the first time. Rising home values have
added more than $2.5 trillion to the assets of the American family since the start of 2001.

The rate of homeownership in America now stands a record high of 68.4 percent. Yet there is room for improvement. The rate of homeownership amongst minorities is below 50 percent. And that’s not right, and this country needs to do something about it.
We need to — (applause.) We need to close the minority homeownership gap in America so more citizens have the satisfaction and mobility that comes from owning your own
home, from owning a piece of the future of America.

Last year I set a goal to add 5.5 million new minority homeowners in America by the end of the decade. That is an attainable goal; that is an essential goal. And we’re making progress toward that goal. In the past 18 months, more than 1 million minority families have become homeowners. (Applause.) And there’s more that we can
do to achieve the goal. The law I sign today will help us build on this progress in a very practical way.

Many people are able to afford a monthly mortgage payment, but are unable to make the down payment. So this legislation will authorize $200 million per year in down payment assistance to at least 40,000 low-income families. These funds will help
American families achieve their goals, and at the same time, strengthen our communities.

End quotes.


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