Friday, December 25, 2009
Media cover-up of Democrat responsibility for the mortgage meltdown changed the course of the nation
One bright spot in the numbers for the President is that 51% of voters still say former President George W. Bush is more to blame for the nation’s economic woes. Just 41% point the finger of blame at the current President.In fact, the mortgage meltdown was overwhelmingly a Democrat production, and one in which Barack Hussein Obama played a crucial double role, while George W. strove mightily for 8 years to secure much stronger oversight for Fannie Mae and Freddie Mac.
The only media outlet to tell the truth about Bush's efforts to rein in the Democrat's reckless government subsidized lending policies was Fox:
Fox was also the only major media outlet to explain why Obama was the second largest recipient of Fannie and Freddie lobbying money, behind only corrupt Senate Banking Committee Chairman Christopher Dodd. It is because there are two sides to the affirmative-action lending scheme that destroyed the U.S. mortgage market, and Obama was crucial to both of them.
The seeds of the meltdown were planted by the Clinton administration's creative use of lawsuits to force banks to implement affirmative action in the issuing of housing loans. Listen to Clinton Secretary of Housing and Urban Development Andrew Cuomo announcing a multi-billion dollar settlement under which banks would lower their lending standards for low income and minority borrowers. Cuomo explicitly calls it "affirmative action" (at 2:40), and explicitly acknowledges that the loans will not be economically rational (that they will have higher default rates than normal, profitable loans, at 2:20 and 3:00):
But Democratic administrations bent on establishing affirmative actions loans were only half the equation. Clinton needed boots on the ground: minority activist groups who could push lawsuits through the legal floodgates that the Clinton lawyers were opening up. To create a sea change in lending practices, there needed to be this hounding legal threat, and this is where Obama came in.
The boots on the ground were provided by the Association of Community Organizers for Reform Now (ACORN), which was getting legal advice from Obama. This is the "community organizer" work that constitutes Obama's entire pre-electoral resume. He was helping groups like ACORN use bogus claims of racial victimization to extort, not equal treatment for blacks, but special treatment, on unprofitable terms for the extorted parties. (Obama acknowledges this work at 5:20 above. Background on the Community Reinvestment Act that Obama and ACORN used--signed by President Carter in 1976--begins at 3:50.)
President Clinton signed legislation forcing Fannie Mae and Freddie Mac to underwrite the unprofitable loans. (Fannie and Freddie are public-private corporations that back private loans with repayment implicitly guaranteed by the federal government. That implicit guarantee has been made explicit through the ongoing bank bailouts). Without this underwriting, the damage from the Obama-ACORN extortion racket would have been limited. The banks that knuckled under would have lost value accordingly, which would have stiffened resistance and probably would have led to the Community Reinvestment Act being declared unconstitutional. But with government underwriting, the financial risk could be passed on to taxpayers, making the banks happy to write as many bad loans as they could find takers for, poisoning the entire financial system, as Obama fully understands.
"Sub-prime lending started off as a good idea," Obama says (at 6:30 above):
...helping Americans buy homes who previously couldn't afford to. Financial institutions created new financial instruments that could securitize these loans [losses?], slice them into finer and finer risk categories, and spread them out amongst investors and around the country, as well as around the world. In theory this should have allowed mortgage lending to be less risky and more diversified.No, mixing bad loans with good was not a way to make mortgage lending less risky, no matter how it was securitized. The securitization just allowed this insane mixing to proceed on a massive scale.
But while Obama knows how the "sub-prime mortgage fiasco" came about, and his own role in it, he constantly blames the disaster on the one person who did the most to try to stop it. Bush tried and failed to roll back the reckless government foray into the backing of uneconomic loans. After the Democrats regained Congress in 2006 they kept expanding government's exposure to bad loans, a course they are still pursuing today, even after bringing the world economy to the brink of collapse.
If you prefer to read rather than watch, Stanley Kurtz wrote an excellent summary of the ACORN-Fannie-Freddie-Obama ménage for the NY Post in October 2008.
Orson Scott Card wrote a nice pre-election bit on the media's systematic (and ultimately successful) efforts to keep the American electorate ignorant of Democrat and Obama culpability for the financial meltdown.
Ace of Spades was one of many to note many examples of media cover up as they transpired. One instance here.
So this is how Obama got elected. The media systematically fooled the electorate about who was responsible for the mortgage meltdown and the subsequent recession, to the point where people voting first and foremost on the state of the economy voted for the one man most responsible for creating the financial chaos.
The current Rasmussen poll indicates that the people are still duped and it is hard to see what will ever shake them out of it. People who get their information from our Democrat-controlled media will never have any reason to think they are not blaming the right people. However bad the economy gets, their Democrat information sources will never blame the Democrats, and anyone who has imbibed the anti-conservative bigotry of the established media to the point of being invested in it will resist turning to the alternate media--which is the only available source of honest information.
This dire predicament is exactly what we should expect. A society that allows all of its information industries to be taken over by leftist demagogues has gotten itself into a very bad fix, with no easy way out. (That would be our news media, academia, the big charitable foundations, our professional associations and the government.)
Maybe the collapse of the CO2-warming fraud will wake people up to the fact that our information industries are indeed capable of lying systematically and en masse for years on end. Even in the so-called "hard sciences," if the players are Democrats, they are prone to be utterly and constantly dishonest: pure political animals, with many rationalizations, but no principles beyond their grab for power.
If it is our quiet sun that alerts the duped masses to the systematic dishonesty of our Democrat elites it will be one more exhibit for the proponents of a providential history of America, and the country will certainly require a re-awoken rationality and moral consciousness if we are to successfully negotiate any serious downturn in global temperature. There will be no more room to throw away our prosperity on attempted usurpations of our republic a la California's death by public union payoffs or Obama's mimicry of Hugo Chavez. If the sun stays quiet, nature will strip our prosperity for us, unless we are able to compensate by freeing liberty to maximize progress.
The first step to economic recovery is to end the insane Democrat war against energy. They want an excuse to tax this life-blood of the economy as a way to fund their broader war against liberty (the socialization or communization of everything). As I put it in my Copenhagen post:
We ought to be developing energy resources as fast as humanly possible in preparation for the likelihood of global cooling. Energy development would also save the economy, and even allow the United States, which sits atop the world's largest fossil energy resources, to pay off the killing debt that Obama is dropping on us like a rain of battleships.But we can't do anything until we get rid of the Democrats. According to Rasmussen, that would be accomplished in very short order if we could just wise our fellow countrymen up to one easily verifiable truth: that it is the Democrats who were and are responsible for the financial meltdown, with President Obama being the one figure who worked both sides of this dirty deal, generaling the boots-on-the-ground extortion racket on the one hand, while working as a legislator to bill the whole resulting mountain of bad debt to the American taxpayer.
Being more culpable than anyone else did not stop Obama from saying this:
I don't want the folks who created the mess to do a lot of talking. I want them to get out of the way so we can clean up the mess. I don't mind cleaning up after them, but don't do a lot of talking.The man is a sociopath.
John Cooper commenting on this post at Flopping Aces relates an interesting anecdote:
I called my former Senator Dole (who sat on the Senate Finance Committee) and asked her staffer why the reform bill was allowed to die in her committee. Shelby [R-AL] was the chair, and the Republicans had the majority in the Senate, but they did nothing to move the bill forward.Other FA commentators are also keen to remember the share of blame due to the Republicans. All quite correct, but the Republicans’ biggest failing was how they knuckled under to the community activist guerilla theater played by ACORN and Obama. Kurtz has the details in the article of his that I linked above:
The lame excuse I got from the staffer was, “We didn’t have a sixty-vote majority so we didn’t bother to send the bill to the floor.” That kind of defeatist attitude really frosts me.
ACORN’s Democratic friends in Congress moved to force Fannie Mae and Freddie Mac to dispense with normal credit standards. Throughout the early ’90s, they imposed ever-increasing subprime-lending quotas on Fannie and Freddie.
But then the Republicans won control of Congress – and Rep. Roukema scheduled her hearing. ACORN went into action to protect its golden goose.
IT struck as Roukema aired her concerns at that hearing. Pro testers, led by ACORN President Maud Hurd, stood up and began chanting, “CRA has got to stay!” and “Banks for greed, not for need!” The protesters then demanded the microphone.
With the hearing interrupted and the demonstrators refusing to leave, Roukema called the Capital Police, who arrested Hurd and four others for “disorderly conduct in a Capital building” – a charge carrying a penalty of a $500 fine, six months in prison or both. As the police arrived, two of the protesters menacingly approached Roukema’s desk, still demanding the hearing microphone.
Requests to the Capital Police to release the activists from Sen. Ted Kennedy (D-Mass.) and Rep. Joe Kennedy (D-Mass,) failed. Then Rep. Maxine Waters (D-Calif.) showed up at the jail and refused to leave until the protesters were released; the Capital Police relented.
Meanwhile, instead of repudiating ACORN’s intimidation tactics, Rep. Kennedy berated Roukema for arresting one of his constituents and accused the Republicans of preparing for “an all-out attack on CRA.” He also promised to introduce legislation to expand the CRA’s coverage to mortgage bankers and large credit unions.
THIS little slice of political life from 1995 had a variety of ripple effects. Above all, ACORN’s intimidation tactics, and its alliance with Democrats in Congress, triumphed. Despite their 1994 takeover of Congress, Republicans’ attempts to pare back the CRA were stymied.
Steve Sailer has some reporting on Bush support for affirmative action lending:
2002: Bush’s Speech To the White House Conference on Increasing Minority Homeownership, and
2004: President Bush asks Congress for authority to eliminate down-payment requirement
Sailer ties this diversity perversity with another Bush diversity perversity that I mentioned recently: Bush's support for anti-profiling ideologue Norman Mineta as Transportation Secretary.
Bad as Bush was about making concessions to the racist diversity-mongers, he was not a driving force, but just failed to offer much resistance. Obama was and is a driving force. For instance, where Mineta refused to profile Muslims, Obama has been actively exempting Muslims from scrutiny, even when they are implicated by evidence, enabling all three domestic terror attacks of 2009.