As of late, we have heard a considerable amount about any number of governmental acronyms, MBS (mortgage backed securities) and GSE (government sponsored enterprises) among others, that have been involved in the “sub prime” lending calamity. Included in all of this are the huge Fannie Mae and Freddie Mac. These last two, who sound and act like “Arkansas Clinton Cousins” who insist on marrying, are at the heart of this “scandal.” Right in the thick of this mess is the Democratic Party and their presidential candidate who are participating in their habitual hobby of “political projection”. All of their obfuscatory finger pointing is in need of clarification and the proper redirection.
It is difficult to delve into this immensely complex topic in a cursory manner. However, it needs to be done in light of the roller coaster affect it is having on the economy and the life savings of the hard working and investing Americans.
For years, people like Alan Greenspan, Congressman Richard Baker (R- LA.) and Richard Shelby (R-Ala.) (has anyone detected a pattern yet..) have been warning and working towards alleviating what it was they saw in the future. You may be surprised to find out that standing athwart these brave attempts were folks like the homebuilders, the realtors, Chuck Schumer (D-NY.), Christopher Dodd (D-Conn.) (has anyone detected a pattern yet..) and Democratic presidential candidate Barack Hussein Obama (D- IL.). Shocking, yet completely within character. (Or the lack thereof.)
Those who have blocked the valiant efforts of the previously mentioned have set in place a phenomenon known as “Systemic Risk.” In this case and for a number of reasons, this is “Democratic Systemic Risk.”
Fannie Mae and Freddie Mac have basically placed all of their eggs in one basket and to compound the severity of the problem, Fannie and Freddie are the only baskets in town..
Fannie and Freddie have become the vehicles that have careened into the wall known as the “mortgage crisis.” Since they have “cornered the market” as pertains to this lending practice to the tune of nearly 3.7 trillion dollars, when they go we all go. In order to place some parameters upon the size of the problem, U.S. Treasury held public debt sits at 4.4 trillion. These “intermarrying cousins” have a lot riding on them.
In or about the middle of 2003, Freddie replaced internal auditors Arthur Anderson (the company responsible for the loss of 85,000 jobs at Enron. Has anyone detected a pattern yet?) Everyone was surprised to discover that Freddie via Andersen had fudged the books in order to appear more solvent.
By 2004, the Senate and the House were of the opinion that these inbred lenders were in desperate need of some type of regulation. Committee Chairman Richard Shelby (R-Ala.) put together a bill in the hopes of ringing in both Fannie and Freddie.
Fannie and Freddie decided that it was time to make a few phone calls and they begin twisting a few political arms and poking an eye or two. Their “reminders” that they had contributed over $165,000 to Christopher Dodd and over $125,000 to Barack Obama worked the magic that they had hoped that it would. The bill was opposed on a conveniently straight party line in the committee, effectively ending its political life.
From a May, 2005 article entitled, “Regulating Fannie Mae and Freddie Mac” Peter Wallison said, “It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose the portfolio limitations could not possibly do so if their constituents understood what they were doing.” Alan Greenspan predicted, “There will be massive default with huge losses to the taxpayers and systemic effects on the economy.” It is time to properly place the blame upon the Democrats and their nominee for the presidency, Barack Hussein Obama for this potential financial catastrophe.
However, in mid 2005, a little know bill, S. 190, was introduced to look into this problem. The bill was sponsored by Chuck Hagel (R-NE.) and was co sponsored by Elizabeth Dole (R-NC.), John Sununu (R-NH.) and John McCain (R-AZ.). (Back to this whole “pattern” thing again..) This “trivial” piece of information keeps slipping by the “impartial” media as the Obama “sham-paign” insists on repeatedly placing the blame for this at the feet of President Bush and through political osmosis, John McCain.
The scope of the Democrats involvement in this “scandal” doesn’t end there. The base of all of this is the concept of “bad loans” and the unnecessary risks associated with giving them. Countless bad loans that should have never been made. How could so many bad loans have been made for so long?
Many years back the ever diligent and supremely sensitive liberals discovered something askance. When “fairness” is involved and the imaginary “rights” of the undeserving are being lacerated, the lachrymose lefties don their superhero costumes and being to legislate “inclusion” regardless of the consequences.
Not too long ago, the liberals were told of an “unfairness in lending.” The “Color Conscious Communists” (Dr. Martin Luther Who??) were compelled to spring into action. Suddenly there was “discrimination” everywhere. “Action” had to be taken. There were ‘wrongs” that needed “righting.”
The principle that the left in their histrionic huff overlooked was that “if you do not have the ability to completely pay off a loan you are not entitled to that loan.” Things like “credit history”, income level” and “job history” were now categorized as “discriminatory” and “exclusionary”. Suddenly the imaginary “right” (the left is incredibly efficient at creating “rights” out of thin air. Abortion, for example..) to a loan, regardless of your ability or desire to pay it until its conclusion, was all the rage and “something had to be done about it”.
Those who already have a deficient credit history, for example, have proven that they do not have the ability or the desire to pay their loans to completion. The logical liberal answer is to allow them to have a loan for a home that they have no chance of ever being able to pay to conclusion. The identifiers that used to preclude a person from acquiring a loan were now the guidelines by which you were “entitled” to one, especially if you, or someone like you, had been “discriminated against” in the past. Who could see a problem with that as your parameters?
So Barack Hussein Obama and his Democratic cohorts are responsible for the financial crisis that they wish to project upon George Bush and John McCain. We need to keep all of this in mind when we “discriminate” against the liberals the first Tuesday in November 2008. Tell the world.