The Real Culprits In This Meltdown

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I wrote a lengthy post on this top yesterday but Investor’s Business Daily has expanded and improved on my material.

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…

[I]t 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 home ownership. And in so doing, he helped create the market for the risky sub-prime loans that he and Democrats now decry as not only greedy but “predatory”…

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.

Powerline quotes Barney Frank in 2003 as saying

‘These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the 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.

Way to go Barney!

Investor’s Business Daily::The Real Culprits In This Meltdown.

Who's Leading Now?

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Leaders lead. It may not be apparent when the water is calm and the breezes are gentle. Life is good and any pretender can clamor up the hill and proclaim their virtue.

When the sky darkens and the wind bites at our backs though, actors tumble down the hill. They hesitate. They overt-think. They circle the wagons in uncertainty.

A politician can declare that he is a leader. His political party can declare that he’s a leader. And hundreds of thousands of acolytes around the world can swoon devotedly at his feet, and he can rack up all the trappings of leadership. But none of that in fact makes him into a leader if he actually isn’t one.

Crises reveal, make, and define leaders. When the crisis is over, it’s easy to recognize in hindsight who the leader was, even if there was some doubt as to that during the crisis itself. Looking back, we can recognize a leader because he’s the one who the other potential actors and decision-makers actually followed.

#McCain‘s leadership – “Shut down the campaign. I’m headed to Washington. The country comes first.”

#Obama‘s leadership – “If anybody needs me I’ll be getting ready for the debate.’

Bill Dyer’s article – In the Current Financial Crisis, only McCain is Indispensible is one to read as well as this one by Hugh Hewitt.

Michelle Malkin weighs is with her thoughts and more thoughts.

TD had a brief but pithy article:

John McCain put his campaign on hold today, and called on Barack Obama to join him in Washington, DC in a bi-partisan effort to address the country’s economic crisis. McCain also proposed re-scheduling Friday’s debate and suspending campaign commercials.

Barack Obama responded by a) attempting to take credit for McCain’s idea, b) attempting to take credit for McCain’s economic proposals, c) accusing McCain of playing political tricks, d) refusing to cancel Friday’s debate, and e) essentially telling America: I’m going to keep campaigning and I’m not going to Washington to address the financial crisis. Call me if you need me!

The Democrats Did It

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After days of moaning and blaming, perhaps a few facts should be inserted into the discussion about the current financial melt-down.

Barack Obama blames John McCain and Republicans for the mess. Why? According to Obama, Conservatives have been advocating de-regulation and free market controls and this de-regulation produced the current fiasco. Sounds great to liberals. Must be true.

However, a tiny bit of knowledge regarding economics and the free market concept are helpful. De-regulation did not cause this problem. New regulations caused it; new regulations from the Democrats.
Rewind to the 1995 Clinton Administration. Bill Clinton believed that everyone has a right to own a home. Everyone should own a house whether they can afford it or not. It was in the Constitution; or at least it should be. Banks were hesitant to follow the President’s lead however. They knew that there were certain geographic and demographic areas that foreclosure was a near certainty.

Mr. Banker, do you think it is too risky to loan money to people with a history of non-payment? Are you worried about default and foreclosure on loans to unstable people with unstable incomes?  Enter Fannie and Freddie. They will cover the risk. When the loans fail (and they did by the thousands), someone else will take the loss. So, give them the loan.

To the average consumer this is great news. To the poorest in our country it is better news. It no longer takes a good work history and 10% cash down to buy a house. You just need a smile and a signature and you can finance 105%, buy the house of your dreams, and make payments when it is convenient. Trillions of federally insured dollars, that never should have been there in the first place, flowed into the credit markets.  Understandably, home builders loved this plan. So did the Finance industry. All markets were booming. Politicians, especially friends of Obama, cashed in on the deals.

But everyone ignored some core principles of the free market. They forgot that risk requires compensation. Financial activities with risk fail, sometimes frequently, and require a high rate of potential return to cover the losses. Bill Clinton and Fannie Mae tried to remove the risk. But they couldn’t. They could only shift it to someone else; Fannie and Freddie. They forgot (if they ever knew) how money is actually made and how goods and services are exchanged.

Which brings us to the big, bad, predatory bankers and their outrageous practice of loaning money to people that could never afford it. This is exactly the change Bill Clinton and the Democrats were pushing. The created and changed laws so that people that could not afford a house could buy a house. Barney Frank is STILL trying to make this happen. The mortgage lenders were fulfilling the wishes of the White House. To vilify them now is to distort history.

This is not how the free-market works. It is not de-regulation it is changing regulations to produce a desired outcome with political pressure. Just the opposite of what McCain has advocated and exactly what Obama has supported. In 2005 when Conservatives tried to deal with the mess before it got out of control, McCain supported action and Obama opposed it.

Politicians are now crying that we must provide a $700 billion dollar bail-out, which is not nearly enough by the way. And who will be paying this enormous tab? You and me. People that have worked hard, paid our bills, scrimped, saved and managed our money wisely are absorbing the risk and paying the bills.

And who created this fiasco?
The Democrats did it.

Obama Flip-Flop

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Give Matt Lauer at ‘Thumbs Up’ on this one. He catches Obama in a clear double-standard and Obama ducks for cover.

Lauer was talking about how Obama hit Sen. McCain for flip-flopping on the AIG bailout — saying he opposed it one day then announce he supported it the next day.

But, as Lauer pointed out, scarcely three minutes after McCain said he opposed the AIG bailout last week, “in an interview with Meredith Vieira, Joe Biden, your running mate was asked the exact same question, ‘should the federal government bailout AIG?’ And he said, ‘No, the federal government should not bailout AIG.'” (As we noted at the time.) “And I think that in that situation,” Obama said, “I think Joe should have waited as well.”

“But it’s the kind of thing that drives people crazy about politics,” Lauer said. “It sounds like you were trying to score some political points against John McCain using his words, when your own running mate had used very similar words.” (emphasis mine)

Thanks to Jake Trapper for finding this at Political Punch.

"Why I (A Black Man) Can't Vote For Obama"

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Huntley Brown – is a fabulous concert pianist, a man of God and is a black man.  Here is his reasoning for not voting for Obama. My brother-in-law asked me to post this and I thought you might like it.

Why I Can’t Vote For Obama

A  few months ago I was asked for my perspective on Obama, I sent out an email with a few points. With the election just around the corner I decided to complete my perspective. Those of you on my e-list have seen some of this before but it’s worth repeating..

First I must say whoever wins the election will have my prayer support. Obama needs to be commended for his accomplishments but I need to explain why  I will not be voting for him.

Many of my friends process their identity through their blackness.

I process my identity through Christ. Being a Christian (a Christ follower) means He leads I follow. I can’t dictate the terms He does because  He is the leader. I can’t vote black because I am black, I have to vote Christian because that’s who I am. Christian first, black second.  Neither should anyone from the other ethnic groups vote because of ethnicity. 200 years from now I won’t be asked if I was black or white. I will be asked if I knew Jesus and accepted Him as Lord and Savior.

In an election there are many issues to consider but when a society gets abortion, same-sex marriage, embryonic stem-cell research, human cloning, to name a few, wrong, economic concerns will soon not matter.

We need to follow Martin Luther King’s words, “Don’t judge someone by the color of their skin but by the content of their character.” I don’t know Obama so all I can go off is his voting record.

His voting record earned him the title of the most liberal senator in the US Senate in 2007. NATIONAL JOURNAL: Obama: Most Liberal Senator in 2007 (01/31/2008)

To beat Ted Kennedy and Hilary Clinton as t he most liberal senator, takes some doing. Obama accomplished this feat in 2 short years. I wonder what would happen to America if he had four years to work with.

There is a reason planned parenthood gives him a 100 % rating.
There is a reason the homosexual community supports him.
There is a reason Ahmadinejad, Chavez, Castro, Hamas etc. love him.
There is a reason he said he would nominate liberal judges to the Supreme Court.
There is a reason he voted against the infanticide bill.
There is a reason he voted No on the constitutional ban of same-sex marriage.
There is a reason he voted No on banning partial birth abortion.
There is a reason he voted No on confirming Justices Roberts and Alito. These two judges are conservatives and they have since overturned partial birth abortion. The same practice Obama wanted to continue.

Lets take a look at the practice he wanted to continue. Read more

Who is Telling the Biggest Lies?

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Ruth Marcus has an excellent article in the Washington Post,  Closing the Whopper Gap.  She compares the lies, exaggerations, and half-truths of McCain compared to Obama.

Guess who is telling the biggest lies? Barack Obama. Read the whole story.

Wisdom and Elitism

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Bill Dyer, guest columnist for Hugh Hewitt, has the kind of acerbic wit and sarcasm that appeals to my baser instincts. I suggest you read his post on ‘Wisdom and Elitism.’

Disclaimer: You may become addicted to this style of political punditry.

The moose-hunting hockey mom versus the community organizer from Harvard Law.

Fannie Mae Five – Five Key Players Who Broke The System

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What do Chris Dodd,  Barney Frank, Jim Johnson, Franklin Raines and Tim Howard have in common (besides being engineers on the Barack Obama Election Express)? I try not to just scrape the content of other sites but Mcauleys World has a great article with info that is essential for everyone to know.

Five Key Players In Washington who had chances to prevent the Financial Crisis but who, by their actions or inactions helped to bring down Wall Street.

Senator Christopher Dodd

Democrat from Connecticut. Dodd has been in the Senate for 28 years. Dodd has served as Chairman of the Democratic National Committee. Dodd is Chairman of the Senate Banking Committee. As Chairman he had responsibility for acting as a “watch-dog” of Fannie Mae and Freddie Mac. Dodd has responsibilty for assisting in the selection of the CEO’s who run Fannie Mae and Freddie Mac.  Dodd was a leading contender to be Obama’s Vice Presidential selection until his receipt of VIP loans from Countywide Financial were disclosed.

It has been reported that Dodd received $7,000,000 in loans from Countywide. Dodd’s Committee was responsible for overseeing Banks in the United States. Countrywide is one of the leading culprits responsible for the lending policies that brought on this Crisis. Countrywide is under FBI investigation for securities fraud. The Government Watchdog Group, The Center For Responsive Politics, reports that Senator Dodd received more campaign contributions from Fannie Mae and Freddie Mac than any other Senator. Read more