Political Arguments with friends

0 Comments
My friends and I occasionally get into political discussions/arguments.
Though we argue, we are still friends.

I'm starting with my friend's comments first.
"I just read this and was a bit taken back. Apparently Bush tried to avoid this whole Fannie Mae/Freddie Mac mess but no one did anything. Now I do blame the Republican Congress from 2001 to 2006 so being terrible but the Democrats who took over in 2007 should have done something. Here is one of the biggest problems not reported, Fannie Mae/Freddie Mac are big time donors to Democratic Senators include one Barrack H. Obama.

In no way am I trying to say Bush could have fixed the problem, I'm saying he knew there was a problem and called on Congress to do something. They did nothing.

http://gatewaypundit.blogspot.com/2008/09/bush-called-for-reform-of-fannie-mae.html

Bush Called For Reform of Fannie Mae & Freddie Mac 17 Times in 2008 Alone... Dems Ignored Warnings

For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted.

Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.

The White House released this list of attempts by President Bush to reform Freddie Mae and Freddie Mac since he took office in 2001.
Unfortunately, Congress did not act on the president's warnings:

** 2001

April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."

** 2002

May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)

** 2003

January: Freddie Mac announces it has to restate financial results for the previous three years.

February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)

** 2004

February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)

** 2005

April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)

** 2007

July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)

** 2008

January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase.

March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

"Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)

"[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)

"Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.

In 2005-- Senator John McCain partnered with three other Senate Republicans to reform the government's involvement in lending.
Democrats blocked this reform, too.

More... Not only did democrats not act on these warnings but Barack Obama put one of the major Sub-Prime Slime players on his campaign as finance chairperson.

UPDATE: The media is not reporting that the failed financial institutions are big Obama donors.

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Me:
Wait...weren't you the guy 2 months ago who said there was no financial crisis?
Actually, Paulsen and Bernanke were talking about the financial crisis since 2001-2002 and waited. So don't blame it on the Demo house.

2ndly, it's a good thing Bush did step in in a very non rep. way.
He should at least do one positive thing during this term.
Democrats came in to power not too long ago. These effects have been reeling since 2002.
Richard F. Syron, the CEO of Freddie Mac, received a memo from David Andrukonis, the company's former chief risk officer in 2003, warning him, that Freddie Mac was financing risk-laden loans which threatened Freddie Mac's financial stability. In his memo, Mr. Andrukonis wrote that these loans "would likely pose an enormous financial and reputational risk to the company and the country."[ An article in the NY Times revealed that more than two-dozen high-ranking executives said that Mr. Syron simply decided to ignore those warnings. Other warnings came as early as 2001 when the recently deceased Federal Reserve governor Edward Gramlich warned about the risks of subprime mortgages.
But that's ok...it's warnings that this presidency seems to ignore...they should at least be consistent at being inconsistent.
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Him:
I really don't think there's a financial disaster.

2001-2002 we were getting out of the 2001 recession and 9/11. I really don't see the link.

Obama and other top Democrats in Congress get money from Fannie Mae/Freddie Mac. Follow the money Rob, follow the money.

Obama in a statement yesterday blamed the shocking new round of subprime-related bankruptcies on the free-market system, and specifically the "trickle-down" economics of the Bush administration, which he tried to gig opponent John McCain for wanting to extend.
But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory."
Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America .
As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.
Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.
Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.
In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes in its accounting procedures and ways of managing risk.
But it was too little, too late. Raines had reportedly steered Fannie Mae business to subprime giant Countrywide Financial, which was saved from bankruptcy by Bank of America.
At the same time, the Clinton administration was pushing Fannie and her brother Freddie Mac to buy more mortgages from low-income households.
The Clinton-era corruption, combined with unprecedented catering to affordable-housing lobbyists, resulted in today's nationalization of both Fannie and Freddie, a move that is expected to cost taxpayers tens of billions of dollars.
And the worst is far from over. By the time it is, we'll all be paying for Clinton 's social experiment, one that Obama hopes to trump with a whole new round of meddling in the housing and jobs markets. In fact, the social experiment Obama has planned could dwarf both the Great Society and New Deal in size and scope.
There's a political root cause to this mess that we ignore at our peril. If we blame the wrong culprits, we'll learn the wrong lessons. And taxpayers will be on the hook for even larger bailouts down the road.
But the government-can-do-no-wrong crowd just doesn't get it. They won't acknowledge the law of unintended consequences from well-meaning, if misguided, acts.
Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions.
While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge.
Market failure? Hardly. Once again, this crisis has government's fingerprints all over it.
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Me:
It's a domino effect. You can attribute this stock/investment/banking regulations or lack-of-thereof on the Regan administration and the way the rep. party protected the Investment and banks companies by not creating regulations.
So if you really want to get to the root of the problem then you should go back to when we had the same issue.

Fuck it, lets go back to the great depression and you'll see a rep. house and president stood by and did nothing.a democrat had to step in.

The rep. party does very little to meddle with businesses. If they had a better approach they could have set some guidelines. This is the first time in about a decade that the majority is Democrat. So do not blames this on the democratic party when the just got into being majority 2yrs ago.

The Republican party should have done something. They were in power for a better part of a decade.

As far as Fanny Mae, Fannie Mae's oversight by HUD it should now be clear that the Fannie Mae failure was a government and political failure and not a market failure.

Knowing what the Paulsen knew he should have tried to become more vocal.
Mr. Paulson, in the interview Friday, said that Mr. Bernanke had long warned that a moment might come like the one they saw last week.

"Going back a long time, Ben, as a world-class economist, said to me, 'When you look at the housing bubble and the correction, if the price decline was significant enough,' " the only solution might be a large-scale government intervention, Mr. Paulson said. "He talked about what had happened when there had been other situations historically. And basically he said in his view the time might ultimately come when something like this was necessary."

Mr. Paulson said he agreed but hoped it would not come to that. "I knew he was right theoretically," he said. "But I also had, and we both did, some hope that, with all the liquidity out there from investors, that after a certain decline that we would reach a bottom."

2ndly, the Democratic Party has had to step in to a Senate and House that has left a bigger deficit and a benevolent lack of trust for the government than ever before.
IOWs the democratic party is cleaning up all the stuff the Rep. did.

Him:
Find me where this is a Domino effect from Reagan. Find it.

I already showed that it started in 1999, Republican Congress with a Democrat President.

I did lay blame on the Republican Congress from 2001 to 2006 for not doing enough but once the crisis was closing in, the Dems did nothing also from 2007 to now. They needed to handle a crisis and they ran away from it scared.

I have claimed that these failing organization contributed money to Dodd and Obama and other Democrats. Doesn't that seem odd to you. Here is a crisis that these organizations are going to fail and the very same Democrats do nothing and sit back watching them fail, counting their money.

In closing, don't you think if Republicans were receiving money from Fannie Mae/Freddie Mac, the Democrats in Congress would be screaming for hearings and investigations? I think so. But since it is there pockets that were filled, no hearings, no investigations.

Me:
The same way Rep screamed for impeachment for a sexual investigation rather than one on job performance?
Reagan info:
Ronald Reagan promised to take government off the backs of enterprising Americans. He told voters that government was not the solution to the nation's problems; it was the problem. "The nine most terrifying words in the English language," said Reagan, are, " 'I'm from the government and I'm here to help.' " His speeches contained numerous warnings about the chilling effects of bureaucratic regulation. Government leaders think, he said, "If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it."

Ronald Reagan was not the only major champion of deregulation. Economist Milton Friedman served as the idea's principal philosopher, and Newt Gingrich was a leading advocate in Congress. But Reagan was the most influential figure to make the term "government" sound like a naughty word.

The main problem with Reagan's outlook was a failure to recognize that government regulation can serve business interests quite effectively. Many of the regulatory programs started by Franklin D. Roosevelt's New Deal in the 1930s aimed to promote fairness in economic competition. That legislation required greater transparency so that investors could more intelligently judge the value of securities in the stock market. The reforms mandated a separation of commercial and investment bank activities, since speculative investments by commercial banks had been one of the principal causes of the financial crash. Roosevelt's New Deal also created a bank insurance program, the FDIC, which brought stability to a finance industry that had been on the verge of collapse.

yeah...Take IT!

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Him:
LOL.

Terrorist Attacks since 9/11 - Zero.

Job well done.

Reagan reply
Holy shit, that was about the dumbest thing I have ever read. Obviously written by an idiot.

Reagan took a miserable economy that had gone through a gas crisis that led to huge inflation and huge unemployment and turned it around. The benchmarks in the article absolutely forget that.

He did such a remarkable job, in 1984 he lost only one state, the one that was the home state of his opponent.

Weak Rob, weak.
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Me:
Well it shouldn't have happened in the first place.
So...yeah...hum! something to ponder.

-
Him:

Well they were planning it for years, you know, while Clinton was getting a blow job. Now that man should have done something about it. Especially when they told him do you want Obama, ops, I meant Osama and he said no.

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Me:
They could plan world domination, but it happened during Bush's watch.
So it's Bush's fault for not doing anything about.
The economy prospered more during Clinton and there was no Financial Crisis.
Sorry, what is it that you call it? Since you state, "I really don't think there's a financial disaster." Yet, the government has to spend $1trillion on the economy?
The President has been inept up to now just as your political views.
One thing I must state is that he at least stepped in to help in Wall Street, late, but there nonetheless.
Also, at least Osama hasn't run 3 business into the floor.

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Him:
Let me help you see the light.

Bush does deserve 9 months of responsibility for 9/11 and Clinton about 6 years.

Economic prosperity under Clinton did lead to the Dot.Com bubble bursting leading to the 2001 recession. Did he create that? Nope. That is the free market.

Bush helped fix it with tax cuts, helping this economy bounce back way before anyone thought it would.
Check this out. http://www.heritage.org/Research/Taxes/bg2001.cfm

Now this financial crisis is a free market problem. The repeal of the Glass-Steagall Act in 1999 done by both parties did contribute to it.

This isn't only Bush's error. That is all I'm trying to say here.

Fannie Mae/Freddie Mac needed to fix by those cries went on deaf ears. Those ears were Democrats who happened to be making money from Fannie Mae/Freddie Mac. They could have done something but chose not to.

So now we need a $700 billion rescue. Could have been less but they didn't act quickly.

Follow the money Rob.

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Me:
Six years of what?
Nothing happened during the Clinton years. It happened during Bush's.
So stop pointing the finger at Clinton.
Well, I'm sure that if the Dot.Com venture happened during Bush you would have claimed it as a positive.
It happens to be shitty luck that it burst during Bush, the same way that 9/11 happened during Bush, that the real estate happened during Bush, that Wall Street crashed during Bush, that the government happened to consume the biggest deficit in history cause of Bush and that we are bombing Iraq instead of being in Afghanistan cause of Bush.
But it's ok... cause the last 2 yrs the democratic party has been the majority at its their fault.

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Him:
You're not even reading what I write correctly.

I didn't point the finger at Clinton for the Dot.Com. I said it is what happens in the Free Market.

The real estate and Wall Street is the Free Market at work. It did pretty awesome up to about a 18 months ago. Wait, what happened 18 months ago? Democrats took office. LOL.

Rob, this crisis is a function of Free Market. If you ever actually read my article, you'll find out that Clinton pushed sub-prime loans. Those loans did have a major contributing factor to today's crisis.

Could Bush and Republicans have done something? Yes. Now, when the shit was close to hitting the fan, could the Dems come in and save the day? Yes.

My big problem with it is that those Dems in power where receiving money and in some cases, actual loans from these institutions. Doesn't that smell funny to you.

Go ahead Rob, tell me more about Reagan or how the Republicans in the 1930s created the Great Depression around the world.

The fact remains that the biggest problem is sub-prime loans and the genesis of them is Clinton.

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Me:
Please look into it..the effects happened now from something everyone has seen.
The real estate bubble, must I quote Paulsen's interview again?
did you read that?
Really?

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Him:

I know that everyone saw this bubble bursting since 2002 when the housing market took off. But it started turning sour 18 months ago.

But when given lemons, make lemonade. I know several friends who have bought foreclosed or short-sale homes. People that would have never been able to do it before. That is awesome. Hell, I was thinking about buying a house like 3 years from now and here we are, house bought.

This is a financial crisis with certain institutions but our economy is still strong. This is not a great depression moment here.

Again, the Repeal of the Glass-Steagall Act in 1999 is what allowed these Financial Institutions to buy all these risky mortgage. Repealing that allowed them to borrow from themselves which is what lead us here.

I think Reagan already lost his mind by 1999. It was Clinton would takes that one.

Ahhhhhh, TAKE IT

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Me:
The act of 99 was actually created and pushed by Reps and was voted on by a rep. house. Clinton didn't happen to veto it, but your party wrote it, pushed it and approved it.
It's funny how you don't mention that.
This is during the time that Clinton was focused on Kosovo and pushing for regulations and money for this genocide that was occurring. Clinton let this go and the Rep. would let go of money and troops to help the situation there.

See also .

Depository_Institutions_Deregulation_and_Monetary_Control_Act passed in 1980, the Garn-St._Germain_Depository_Institutions_Act deregulating the Savings and Loan industry in 1982, and the Gramm-Leach-Bliley Act in 1999.

The bill that ultimately repealed the Act was introduced in the Senate by Phil Gramm (R-TX) and in the House of Representatives by James Leach (R-IA) in 1999. The bills were passed by a 54-44 vote along party lines with Republican support in the Senate and by a 343-86 vote in the House of Representatives. Nov 4, 1999: After passing both the Senate and House the bill was moved to a conference committee to work out the differences between the Senate and House versions. The final bipartisan bill resolving the differences was passed in the Senate 90-8-1 and in the House: 362-57-15. Without forcing a veto vote, this bipartisan, veto proof legislation was signed into law by President Bill Clinton on November 12, 1999.

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Him:
Rob, I clearly stated that both parties were to blame several times over. Republicans wrote it and many many Democrats voted for it. Clinton wanted it.

Actually read this article.

The Real Culprits In This Meltdown

Big Government: Barack Obama and Democrats blame the historic financial turmoil on the market. But if it's dysfunctional, Democrats during the Clinton years are a prime reason for it. Read More: Business & Regulation
Obama in a statement yesterday blamed the shocking new round of subprime-related bankruptcies on the free-market system, and specifically the "trickle-down" economics of the Bush administration, which he tried to gig opponent John McCain for wanting to extend.
But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street's most revered institutions.
Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.
The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but "predatory."
Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the '90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.
And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America .
As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.
Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.
Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.
In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes in its accounting procedures and ways of managing risk.
But it was too little, too late. Raines had reportedly steered Fannie Mae business to subprime giant Countrywide Financial, which was saved from bankruptcy by Bank of America.
At the same time, the Clinton administration was pushing Fannie and her brother Freddie Mac to buy more mortgages from low-income households.
The Clinton-era corruption, combined with unprecedented catering to affordable-housing lobbyists, resulted in today's nationalization of both Fannie and Freddie, a move that is expected to cost taxpayers tens of billions of dollars.
And the worst is far from over. By the time it is, we'll all be paying for Clinton 's social experiment, one that Obama hopes to trump with a whole new round of meddling in the housing and jobs markets. In fact, the social experiment Obama has planned could dwarf both the Great Society and New Deal in size and scope.
There's a political root cause to this mess that we ignore at our peril. If we blame the wrong culprits, we'll learn the wrong lessons. And taxpayers will be on the hook for even larger bailouts down the road.
But the government-can-do-no-wrong crowd just doesn't get it. They won't acknowledge the law of unintended consequences from well-meaning, if misguided, acts.
Obama and Democrats on the Hill think even more regulation and more interference in the market will solve the problem their policies helped cause. For now, unarmed by the historic record, conventional wisdom is buying into their blame-business-first rhetoric and bigger-government solutions.
While government arguably has a role in helping low-income folks buy a home, Clinton went overboard by strong-arming lenders with tougher and tougher regulations, which only led to lenders taking on hundreds of billions in subprime bilge.
Market failure? Hardly. Once again, this crisis has government's fingerprints all over it.

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Me:
LOL! Yeah, the republicants controlled congress for 12 of the last 14
years and had COMPLETE control of the gov for 6 of the last 8 and this
mess is Clinton's fault!
Here are the top three culripts (and one of them would become McKook's
Treasury Sec. if he gets elected):
* Alan Greenspan
* Phil Gramm
* George Bush
Once again...how come you don't place any blame on the Rep dominated house for not vetoing any of this?

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Him:
I know that everyone saw this bubble bursting since 2002 when the housing market took off. But it started turning sour 18 months ago.

But when given lemons, make lemonade. I know several friends who have bought foreclosed or short-sale homes. People that would have never been able to do it before. That is awesome. Hell, I was thinking about buying a house like 3 years from now and here we are, house bought.

This is a financial crisis with certain institutions but our economy is still strong. This is not a great depression moment here.

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Me:

Some people can benefit from tough times. The same way a person benefits from someones death in a rent controlled apt. in NY.


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