Saturday, September 27, 2008

Subprime Crisis: The Spin Versus C-Span

This is a pretty devastating indictment. It is 8 minutes long.

The problem with socialism is that it uses redistribution to give away money for free. That is precisely what the subprime loan crisis is all about. Rather than helping people meet the appropriate standards for loans, the left simply lowered the standards to redirect the lending of money. It has brought us to the brink of depression.

Let's go down the brief history of this fiscal crisis that brought us to our knees today.

1. President Clinton wanted to establish more home ownership among minorities. Rather than establish a program to work with individuals to bring credit scores up and help with budgeting problems, he simply ordered that loan standards be removed, thus opening up the subprime market.

2. President Clinton then set AG Janet Reno off to punish institutions that refused to lower their lending standards and he used Government Sponsored Enterprise's (GSE's) - Fannie Mae and Freddie Mac - to push subprime lending in a massive way.

3. It was clear from the start that this was incredibly risky. And the warnings of how dangerous this was from the center and from the right, including such people as Clinton Treasury Sec. Larry Summers, were ignored by the left.

4. By 2003, the house of cards was exposed. OFHEO blew the whistle on massive accounting fraud at Fannie Mae and Freddie Mac. The Bush administration attempted to institute tighter regulation of Fannie Mae. What you see in the above video are snippets from the hearing, where the Democrats, Barney Frank at the lead, lined up foresquare against any sort of new regulation, calling subprime lending an acceptable practice and the GSE's Fannie and Freddie fundamentally sound.

5. Again in 2005, Republicans in the Senate Banking Committee tried to reign in these institutions and the massive subprime lending with significant new regulation that would have stopped this. McCain co-sponsored this legislation, speaking on the floor of the Senate warning of the dire consequences to our entire economy if Fannie and Freddie failed. That legislation was killed in committee when Senator Dodd and every Democrat lined up against it. Harry Reid and Chuck Schumer gave speeches against this new legislation. Obama did not engage in the debate. He was at the bank cashing Fannie Mae campaign contributions.

6. When the downmarket hit in 2007, Senators Dodd and Schumer came up with the brilliant idea of lowering the standards even more so that Fannie and Freddie could by up even more subprime mortgages.

7. And as had been clear from Day 1, when Fannie and Freddie fell, it has now rippled throughout our economy, leaving the taxpayers to foot a $700 billion clean-up.

8. For the left to point to this failure as a Bush legacy is obscene. And to listen to Obama say this was a result of 8 years of failed policies was a lie of incredible magnitude.

Other posts related to Subprime Crisis (from oldest to newest):

1. McCain, The Fannie and Freddie Crisis, and Obamafuscation - Obama and the entire Democratic Party are trying to blame Republicans for the subprime crisis. But this crisis was created by Bill Clinton and protected against Republican efforts to reign it in over a decade – until it failed, nearly pulling out entire economic system into a depression.

2. A Washington Post Front Page Hack Job - The Washington Post does a hit job on McCain, grossly distorting his record on regulatory matters and ignoring his cosponsoring of legislation to establish much stronger regulation of Fannie Mae and Freddie Mac.

3. Dodging a Depression - The NYT and WSJ document just how serious is the subprime crisis. Quite literally it brought us to the point of a complete and catastrophic stoppage of our financial systems as institutions lost confidence in their fellow institutions. This was not a stock market crash, it was a lending and credit crash. The WSJ describes the events of the week leading up to the crisis point.

4. Obama & The "Family" Of Fannie Mae - Documenting Obama’s relationship to Fannie Mae.

5. The Origins – And Foreseeability – Of the Subprime Crisis - A 1999 article in the NYT describes the Clinton Administration forcing subprime loans onto America and also forecasts that this will create a house of cards that will fall apart in a down market.

6. Covering The Left’s Fannie - The NYT tries to play up old ties of a McCain campaign worker with Fannie Mae while minimizing the fact that McCain himself, in 2005, co-sponsored legislation that may well have prevented the fiscal crisis we are in now.

7. The Left’s Subprime Meltdown - A post by the Anchoress discusses this subprime crisis as a creation of the left and a system that was protected to the end by the left. She adds additional sites, quotes and links to explain the mosaic.

8. Fannie & Freddie, McCain & Obama, Subprime & Wall St.The WSJ discusses both how the subprime loan market came about and how Democrats, including Obama, were both the cause of the problem and the roadblock to a solution that would have averted this catastrophe. Dafydd at Big Lizard's explains how Mortgage Backed Securities worked on Wall Street.

9. A Doddering Fool & Charlatan - Chris Dodd is up to his ears in the subprime crisis. With our economy teetering on an actual depression due to the Fannie/Freddie/subprime loan crisis, it was not merely surreal to watch Senator Chris Dodd chair an emergency hearing of the Senate Banking Committee to evaluate the Treasury's proposed rescue plan, it was obscene.

10. Finally – Oversight - The FBI has finally announced criminal investigations at Fannie and Freddie.

11. When Will They File As A 527 – The NYT continues its wholly biased reporting on the subprime crisis, refusing to report on the genesis of the crisis and instead, reporting on the relationship between Fannie Mae and Rick Davis of McCain’s campaign team.

12. McCain The Chessmaster - Opining on the potential risks and rewards of McCain's decision to cancel campaigning, return to Washington to take part in negotiations over a response to the subprime crisis, and tentatively cancel the Friday debate.

13. The President Addresses The Nation - Bush explains the stakes involved for America with the subprime crisis.

14. McCain The Chessmaster Part II - McCain was responding to a 3 a.m. phone call in returning to Washington. He is given political cover and support by Bill Clinton.

15. A Spotlight On The Left's Subprime Crisis - A video summary of the origins of the subprime crisis with lots of footage of Rep. Barney Frank and others protecting Fannie Mae from regulation by the Bush Administration and McCain.

16. WaMu Swallowed Up In The Left's Subprime Swamp - Washington Mutual goes under because of toxic mortgage debt.

17. Great Moments In Leadership - Obama phones it in on the subprime crisis.

18. The "No Deal" - McCain Responds - The left is blaiming McCain for failure of a deal on the subprime crisis. McCain answers in a memo.

19. Dodd, ACORN, and the Penultimate Screwing of the Taxpayers - The left, the people responsible for the subprime crisis, proposed a deal that would have used the return on rehabilitated investments not for the benefit of taxpayers but to fund progressive advocacy organizations that are fundamentally corrupt.

20. Krauthammer On The Subprime Crisis: Time For A Return To Public Executions - America is livid over this fiscal crisis and wants a pound of flesh to satiate its cravings before beginning the job of putting our financial house back in order. Krauthammer things we should give it to them and suggests a return to the auto de fe, this time as a reality show.

21. The Subprime Crisis, Dems, Obama & McCain - a great video giving the history of the subprime crisis.

1 comment:

vinny said...

GW, I don't understand how increasing government oversight over fannie and fredie would prevent more bad loans from being made. Government regulation would more likely lead to politically correct decisions, and making sure that minorities are not discriminated against when it comes to banking practices and loan lending. I don't see a government agency placing financial considerations at the top, or even as a part, of their agenda. What is necessary here, is a end to government pressure on banks promoting sub-prime loan practices. Furthermore, financial institutions need to know that bad financial decisions will lead to the suffering of that institution, and there must be strong incentives to prevent the officers of these institutions from poor management/fraud. If we reward incompetence, why would these firms need to hire competent CEO's and employees?