Whose policies led to the credit crisis?
posted at 9:40 am on September 16, 2008 by Ed Morrissey
Send to a Friend |
Share on Facebook | printer-friendly
The credit crisis and the lack of oversight over government-subsidized lenders like Fannie Mae and Freddie Mac occurred on the watch of George Bush, and many blame his economic team for their lack of oversight in the collapse. Barack Obama has made this point one of his major campaign themes, arguing that John McCain would provide more of the same failures that Bush did. However, what many do not recall is that Bush wanted to tighten oversight with a new regulatory board for Fannie Mae, Freddie Mac, and other government recipients for the express purpose of addressing bad loan practices — and Democrats blocked it.
The New York Times reported this five years ago:
The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.
Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.
The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.
The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.
This should have been a no-brainer, right? With hindsight, we can see that the Bush administration had accurately diagnosed the problem in the lending market and had a plan to address it. Fannie Mae and Freddie Mac reluctantly supported the plan. However, Democrats objected (emphases mine):
Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.
”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.”
Representative Melvin L. Watt, Democrat of North Carolina, agreed.
”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.
Sounds a little like the Democratic denial of problems in Social Security, doesn’t it? Nothing to see here, no crisis on the horizon. Everybody just move along, now. The Democrats had forced lenders to assume more risk at lower interest rates in the 1990s, as IBD points out today, and they didn’t want to countenance an end to their populist policies:
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.
It was the Bush administration that wanted to rein in the madness in the credit markets, and the Democrats who wanted to extend the Clinton policies that created the crisis we have now. After the fit hit the shan, as Michelle says, these same Democrats want to shift blame back to the administration that wanted to increase oversight and curtail risk in lending practices while reducing patronage at the giant GSEs.
The Bush administration isn’t blameless in letting this get out of hand, but clearly the origins of the disaster and the efforts to keep bad policies in place fall on the Democrats in this case.
Update: John Lott points me to a March column he wrote at Fox News explaining the underlying causes of the debacle. Forcing lenders to make questionable loans and blocking tougher regulation of the government-supported entities was a recipe for collapse, and Lott explained it six months before it happened.
You must be logged in to post a comment.
Blowback
Note from Hot Air management: This section is for comments from Hot Air's community of registered readers. Please don't assume that Hot Air management agrees with or otherwise endorses any particular comment just because we let it stand. A reminder: Anyone who fails to comply with our terms of use may lose their posting privilege.
Trackbacks/Pings
Trackback URL
Comments
Comment pages: « 1 [2] 3 4 »
Jamie Gorelick was also the CHIEF LEGAL OFFICER at Fannie Mae while it was cooking its books to hide $400 million in losses so that she and the other execs could get the maximum bonus. I thought she should have been disbarred for her lack of oversight there.
This was so obvious at the time to those of us in the industry. In late 1998 there was a mini-meltdown when the Asian financial markets collapsed and Long Term Capital Management had to be rescued by the Fed. Dozens of lenders failed during this period and thousands lost their jobs, but somehow Fannie Mae continued to report increasing profits. It did not pass the smell test. It turned out that Fannie simply shifted losses to future quarters so that its earning per share miraculously came in at exactly the number that guaranteed the maximum bonus for its executives. It was brazen accounting fraud. OFHEO later found emails and a whistleblower who had tried to point out the accounting irregularities.
Fannie’s response was to try to quash the report, slime the Director of OFHEO (A Hispanic Clinton appointee, by the way), and have its Democrat slaves on Capitol Hill come to its defense in hearings and in op-eds.
It took 800 people three years to straighten out Fannie’s books and implement a new GAAP-compliant accounting system.
rockmom on September 16, 2008 at 10:59 AM
Rockmom: you are a fountain of information on this! Thanks.
carbon_footprint on September 16, 2008 at 11:01 AM
Where is the McCain ad on this? Who is asleep at the wheel here? The attack ad Obama released yesterday is fairly weak, but for about a month now we all have discussed different issues that are tailor made for good honest ads about the issues. Where are they? Somebody pick up that red phone and call Rick Davis!
And FYI to one and all, 3, 2, 1 “Wahhh, they are not taking care of my needs!” “FEMA IS BAD!” “The GOP does not know how to handle national disasters!” Now, to one and all in Texas I feel your pain, and I know what some of you are going through. I am so sorry you guys are having to live through this nightmare. I live in Mississippi. But watching KHOU 2 days ago, and the press conference and fallout for a 3 hour delay in getting people aid; the hit pieces are in the pipeline and will be coming down ASAP. It was a snafu and they worked it out, but the Press were like sharks in a chum pool! Between the economy and this storm, the GOP could be behind the proverbial eight ball if we do not stay on the offense and make sure the truth of these situations are getting the light of day. Once again, to those of you in Texas, I mean no offense and I know it is just a few going off on FEMA and the state officials. But that scene I saw 2 days ago, (Shelia Jackson Lee being in the middle of it-scary!), it was beyond sane considering it had barely been 24 hours since the storm had passed and most of the trucks could not get in because of flooded roads and debris. We cannot let this turn into another Katrina ordeal along with the economic news. UGH!
freeus on September 16, 2008 at 11:08 AM
Your a liar on both counts. Do your research, honey.
Fletch54 on September 16, 2008 at 11:09 AM
Congress, the one institution that trandscends the executive branch in it’s longevity as an oversite mechanism; the one institution that should be the firewall to these problems, fails again to take responsibility for it’s lack of same.
Congress is a corrupt institution and is mainly to to blame for it’s failure to regulate and manage our nations business.
Congress is a cash cow for the privledged few who use the executive branch as a whipping boy when their own ill gotten gains turn into a disaster.
Until the citizens take the Congress back through the electoral process, nothing will change.
mylegsareswollen on September 16, 2008 at 11:13 AM
If you want info and insight into the FM & FM, check out Mark Levin’s Sept 15 show. You can stream from his website.
hopefloats on September 16, 2008 at 11:13 AM
Your (sic) an idiot. This is her specialty.
What are your credentials?
carbon_footprint on September 16, 2008 at 11:20 AM
In early 1995, after Republicans had taken control of Congress, Mr. McCain promoted a moratorium on federal regulations of all kinds. He was quoted as saying that excessive regulations were…
Oh well, McSame has flip flopped again…!
[Jim]Cramer called today’s historic market collapse…
J_Gocht on September 16, 2008 at 11:23 AM
Hey, don’t try to take her away…
right2bright on September 16, 2008 at 11:29 AM
Way to go Johnny Mc…!
Keep those cards and letters comin’ folks…!
J_Gocht on September 16, 2008 at 11:30 AM
this makes me sick to my stomach….it should be an ad that runs non-stop to election day…..
SDarchitect on September 16, 2008 at 11:32 AM
Five years ago Bush tried to get this under control…10 years ago McCain wanted this under control and out of the hands of the Government (yes the greedy little bastards who run congress).
Democrats blocked both, instead they inserted their cronies into places to feed them money for their campaigns. As noted on this thread…McCains name is not listed.
right2bright on September 16, 2008 at 11:32 AM
Body language experts, poker players, etc. use a technique called “baselining” to detect deception. Basically, they observe and catalog a person’s behavior under favorable (non-stressful) circumstances in order to get a “baseline” of their normal behavioral patterns. By doing so, they are able to detect lies or deception by observing deviations from that normal behavior when the subject is subjected to stress of one sort or another.
The good news is that the same behaviors that can be attibuted to a person can also be attributed to groups of people who share similar goals. And a few months back, something struck me as odd about Democrat behavior in the face of the mounting turmoil of the mortgage markets. Namely: why are Dems being so hush-hush about this? Instead of the usual teeth-gnashing and soap-boxing, Dems seemed to be more than willing to work with Republicans and the Bush Administration to quietly orchestrate bailouts of the firms that were hardest hit.
Why?
So I thought about it for a while and then I hit upon the answer. What was bugging me was that I was picking up on the fact that the Dems were deviating from their baseline behavior in the face of such a big economic issue. Want an example of their baseline behavior? Look no further than their treatment of the oil industry. IOW, demonize and demogogue.
These people aren’t stupid. They know - just as well as we do - that US oil companies aren’t responsible for the price increases of the past few years. But that doesn’t matter to them: all that matters is that they know that American consumers are angry about oil prices and therefore they see an opportuity to score political points.
They have hearing after hearing, calling oil execs before the Congress to testify, making a huge media hoopla out of it. Are they worried that the truth is going to actually breakthrough to the public - that the price increase we’ve seen since 2000 are the logical result of what happens when you have 40% increase in worldwide demand but only a 10% increase in worlwide production? Not at all. Why? Because they know that their fellow-travelers in the MSM are not going to actually focus on the truth. They know that every 15 paragraph article is going to have 12 paragraphs of tough-sounding Dems standing up to the evil oil execs for Joe Six-Pack, with 2 paragraphs at the end that cover the thoughts of a Republican with “ties to the industry”, and a final paragraph that contains a sentence stating that “oil industry officials and some so-called experts contend that price increases are due demand increases and production decreases…”
Now ask yourself: considering the huge nature of this economic crisis, where are the big mortgage collapse hearings? Where’s the NBC, ABC, and CBS footage of banking and mortgage execs sweating under the hot lights? Where are the $25 million Congressional reports on what happened?
(crickets chirping)
You know why you’re hearing crickets? Because the Dems know that they started this mess in the mid ’90s by pushing banks and mortgage firm to start making extremely risky loans to borrowers who weren’t qualified. And they know that if too much of a spotlight is shone on it, they’ll be lucky to keep 20 seats in the Senate.
This is a post I submitted a few months back at Townhall regarding this very subject:
It’s good to see that people are beginning to see through the fog on this matter. And I hope that this is a ticking time-bomb that explodes in their faces.
rvastar on September 16, 2008 at 11:35 AM
Why isn’t the McCain campaign pointing this out yet? Let’s do it already. Thank you Ed for reporting on this.
skatz51 on September 16, 2008 at 11:36 AM
In polite society, it is generally considered good form when calling someone a liar to explain why that is the case.
a capella on September 16, 2008 at 11:36 AM
For people who want to see McCain’s reponse, got to CNBC’s website, click on videos and watch what he said this morning on CNBC. You can watch Biden’s response too. Why Obama sent Biden rather than doing it himself is unknown.
TheBigOldDog on September 16, 2008 at 11:39 AM
You yourself say that McCain was opposed to “excessive regulation”.
At the risk of sounding like a third grade teacher, some regulations are very bad, some are necessary and good. Making it impossible to drill for oil or natural gas goes into the bad category of “excessive regulation”. Restricting how much money people can borrow, by insisting that, say, they can verify their freaking income goes into the good category.
Buy Danish on September 16, 2008 at 11:42 AM
Hey r2b, “not listed” on your list maybe..?
Check my posts above for the stance Johnny Mc took while his olde bud Alan was Chairman of the Fed…!
A third of a million dollars from just two “insiders”…?
Whoa…How about them “apples”…!
Hey, a $100K here and $200K there and pretty soon you’re talkin’ real money, r2b…!
J_Gocht on September 16, 2008 at 11:45 AM
Not being an accountant, I googled GAAP and came up with the FASB sight. The first entry indicated that the codification was in the verification stages. From a layman’s perspective, the accounting principles seem to be very(hate to use the word), comprehensive and thorough. Thank you for your insights.
captivated_dem on September 16, 2008 at 11:45 AM
“Just shut up, sweetie” eh? Sorry, but I know more about this than almost any person alive who does not still work for Fannie Mae or Countrywide. I’ve been in the public policy end of this industry for over 25 years. You?
I think McCain is wise not to turn this into a partisan blame game. Democrats are completely responsible for the Fannie/Freddie debacle, but it does no good to struggling homeowners to say so now or waste campaign funds on ads about it.
Rick Davis is also in a tough spot here because he formerly ran an organization called the Homeownership Alliance which was largely funded by Fannie and Freddie as a PR effort to help their image. He never directly lobbied for them but the connection is close enough that McCain will get some blowback if he tries to make this a partisan issue. I have never been a fan of Davis and wish he were not part of this campaign.
The Obama ads about all the lobbyists are hilarious. Almost every lobbying firm in Washington was on retainer to Fannie or Freddie at some point. It’s what they did all the time - hire all the talent so their competitors couldn’t. Most of these lobbyists never did a thing for their checks. It was well known in Washington that if you could get hired by Fannie or Freddie it was the easiest gig around because you never had to actually do anything.
rockmom on September 16, 2008 at 11:48 AM
PWN3D!
ballz2wallz on September 16, 2008 at 11:49 AM
Obama is on his way to Hollywood for the big Streisand extravaganza tonight.
rockmom on September 16, 2008 at 11:49 AM
For people who want some insight into the whole Mortgage backed security market and how it came about, etc, you can read a famous book, Liar’s Poker by Michael Lewis on-line here. I linked to page 84 where it’s discussed in laymen’s terms…
TheBigOldDog on September 16, 2008 at 11:52 AM
At the time [1995]; McSame was referring to the financial and banking industries that were being regulated by Alan Greenspan his big personal money man…!
J_Gocht on September 16, 2008 at 11:56 AM
Let us know if you do.
Count to 10 on September 16, 2008 at 11:57 AM
And old investment banker Phil is still hanging around, giving McCain economic advice.
Phil Gramm Attends McCain Campaign Briefing
Reform and Change. Not.
Fletch54 on September 16, 2008 at 11:58 AM
I’ve never understood why the George Bush administration hasn’t been better at communicating facts such as these. They are totally incompetent in their own defense! This information shouts for broader distribution and discussion.
Perhaps Chris Matthews will discuss it?
Star20 on September 16, 2008 at 11:59 AM
+1
Liar’s Poker is one of the best books ever written. I may have to go back and reread it now.
Subprime mortgages and the securities based on them essentially became the junk bonds of this decade. The boom ended about the same way the junk bond boom did, only on a bigger scale and without a poster child like Michael Milken to pin it on. (Though I would argue that Jim Johnson eserves that honor now.) Unfortunately, greedy investment bankers will always glom on to the latest device that appears to present fat returns with minimal risk. Wall Street learned nothing from the junk bond disaster.
rockmom on September 16, 2008 at 12:02 PM
Last night O’Reilly specifically asked FBC’s Liz Clayman if this was Bush’s fault and she flat out said, “Yes”
She’s the one who’s been whining about the cost of cereal for the past 6 months.
Not a fan Liz!
Domino on September 16, 2008 at 12:02 PM
Excessive regulation is the operative word. If you can find anything to indicate that McCain was in favor of doling out loans to people who didn’t need to verify their income let’s see it.
Buy Danish on September 16, 2008 at 12:03 PM
The link didn’t work for me. I’ve got so much reading to do, it’s not even funny. If it’s worth a read, I’ll bump it to the top of my list.
captivated_dem on September 16, 2008 at 12:06 PM
If McSame was smart[?]; he’d dump Davis just like he shucked Gramm in a New York minute…!
I wasn’t aware that olde fart was still hangin’ out…?
McSame would do well to divorce them both; post haste…!
J_Gocht on September 16, 2008 at 12:16 PM
As much fun as it is to castigate the Dems for every malady that befalls us, the blame actually should be directed at Osama bin Laden. What we are experiencing now is the recession we would have had in 2002 had interest rates not been cut then.
hicsuget on September 16, 2008 at 12:20 PM
rvastar, do you think you could try for a Hot Aire record next time and cover an entire page with your irrelevant redundancy…?
J_Gocht on September 16, 2008 at 12:25 PM
(emphasis added)
This is a damning quote, from one of the leading house organs of the Democratic Party…how can there possibly be no political consequences for this?
I’m askin’.
Blaise on September 16, 2008 at 12:36 PM
Isn’t it fairly masochistic to hang out in places where most of the people are of a type you intensely dislike?
What is it about misery and pain that you like?
platypus on September 16, 2008 at 12:37 PM
McCain really needs to cut an ad on how Senator Obama was one of the biggest recepients of Fannie Mae/Freddie Mac largesse…
18-1 on September 16, 2008 at 12:38 PM
This coming from an Idiot who likes to Spam and run every McCain blog in HA and I assume others.
Creep, STFU and STFD!
upinak on September 16, 2008 at 12:39 PM
And this story goes back much further to when Dems first started taking on the job of “loan officer” and declared red-lining to be illegal, along with harassing lenders about the racial makeup of their customers.
We took political correctness and affirmative action to the mortgage markets and this is what happens. Nothing surprising here. It’s what libs do to every field they touch.
progressoverpeace on September 16, 2008 at 12:41 PM
Bush also blew his political capital in trying to move Congress on reforming Social Security.
The Dems in Congress told him to shove it.
During the next SS meltdown the Congress will blame the executive branch.
Enjoy!
mylegsareswollen on September 16, 2008 at 12:41 PM
That’s classic I thought it was the GOP that “constantly hid behind 9/11″…
sven10077 on September 16, 2008 at 12:42 PM
Check your satellites and cable channels.
Oh Boy…!
Is BHO given’ McSame “what fore”…
Baby; he’s on fire…!
J_Gocht on September 16, 2008 at 12:45 PM
Whenever Dhimms and the MSM say “it’s both parties,” it’s, well, the Dhimms only.
ex-Democrat on September 16, 2008 at 12:50 PM
Obama just cut McSame a new backside exit with a real stem winder in Colorado…!
My oh my…
J_Gocht on September 16, 2008 at 12:53 PM
The fundamental problem is the disconnect between the I-banker’s compensation system and the long-term health of their firms.
I-bankers are going to do whatever gets them paid regardless of the long-term consequences to their firms. Their personal financial health has no connection with the long-term health of the firm. If they can score a big bonus by betting the firm, they’ll do it and, if years down the road those deals blow up and kill the firm, it doesn’t affect them. They already made their money.
TheBigOldDog on September 16, 2008 at 12:53 PM
he’s reading from a teleprompter again. otherwise its uhhhhhh duhhhhh ummmmmmmm
how many sets of obama kneepads do you have?
right4life on September 16, 2008 at 12:54 PM
Just google the book and the first link will be the Google version of it on-line. Jump to page 84….
TheBigOldDog on September 16, 2008 at 12:56 PM
Since we can’t trust the MSM to do anything but repeat Obama’s talking points, the RNC needs to get ahead of this now and produce a 5-minute video that can be viraled to get the truth about this out there.
beatcanvas on September 16, 2008 at 12:59 PM
The thing that bothers me about this whole mess, housing prices increase 55% in 06, in Phoenix, and this after 25% in 05 and 15% in 04… And now that the MARKETS are correcting themselves, this turns out to be the BIGGEST SHOCKER since TRUMAN beat DEWEY… This was a PONZI SCHEME from the get go… All the people who got in at the end are now THE LOSERS… Big SHOCKER, HUH????
pueblo1032 on September 16, 2008 at 12:59 PM
Guess who was one of the guys at the center of it. Obama’s buddy and fellow Axelrod client, current Governor of Massachusetts, Deval patrick.
TheBigOldDog on September 16, 2008 at 1:00 PM
J_Gocht,
What the heck are you blathering. Your thoughts/ideas are scattered (scatter brained) and you don’t make any sense! Stick to the facts. Did you recently get here on the boat and don’t understand English or what?
Vince on September 16, 2008 at 1:03 PM
with a feather duster…
one of the two Presidential candidates has 136,000 reasons to be humble…
sven10077 on September 16, 2008 at 1:04 PM
Another one of those FDR programs, like Social Security, which was doomed from the outset to go awry.
Nobody’s about to give Bush any credit for having had the foresight to try to fix this — his disciples have all deserted him.
unclesmrgol on September 16, 2008 at 1:10 PM
Excellent job, BigOldDog. I’d really like to see Patrick (and BHO) grilled on this. I really wish McCain would start talking about this aspect of the subprime crisis and how liberal policy tends to play out. I think that most Americans over 45 remember the whole red-lining fight and understand very well that Libs have been trying to force their social engineering projects into every area (but concentrating on areas with lots of money or lots of young minds).
The subprime mess is a story of social engineering and should be pressed home as such. McCain needs to stress the similarities between the way we warped our financial industry for political correctness (forcing loan packages to be mispriced, to make them look more valuable than they were) and the way we twisted our legal system for political correctness (affirmative action isn’t racial discrimination or quotas … right). In the end, libs like putting all of our institutions at risk just to alleviate their own uncontrollable guilt.
I don’t mean to preach to the choir, BigOldDog. I just hope that some folks from the McCain campaign might be perusing HotAir … It is so important to nail the libs to the wall on this one, and it is so easy to do.
progressoverpeace on September 16, 2008 at 1:14 PM
I gave him “credit” but the fact is he failed. The banks became the SnL’s of the ’80s. You leverage too heavily on having your portfolio on bad houses/lands that suffer from overvaluation. Clinton made the choice to pressure financial institutions to make junk loans, Bush tried to stem it but in not going hellbent for leather on reregulating risk thresholds led to blue chip financiers finally developing comfort with suicidal levels of risk.
This entire problem stems from governmental interference and financial institutions trying to compete with FM/FM who were protected by a federal safety net.
We can either take our medicene or try to forestall it and push it further down the pike…..but economic resets are like savings accounts….
they accumulate interest.
sven10077 on September 16, 2008 at 1:16 PM
That’s gonna leave a mark…
D2Boston on September 16, 2008 at 1:22 PM
Vince olde boye, I’m prone to excessive exuberance everytime I hear Barrack give McSame what fore…!
Just a little Alan Greenspan financial lingo there…
I’ll try to hold it down, in the future.
J_Gocht on September 16, 2008 at 1:22 PM
McCain was right. Obsessive government regulation of mortgage lending is what got us here.
The government basically forced mortgage companies to lend money to people who never should have received the loan in the first place due to poor creditworthiness.
McCain is right on. It was government before Bush was President and the Dems the primary roadblock to reforming or limiting government interference.
Fannie and Freddie need to be gradually phased out so that mortgage lenders are free to make good loans to ensure their investors are not fleeced.
Sapwolf on September 16, 2008 at 1:32 PM
Hey Gucci why isn’t Bambi asking for a criminal investigation?
;)
I’ll give you a hint he’d feel bad putting his staff under subpoena….
sven10077 on September 16, 2008 at 1:32 PM
Oh boye…?
McSame said yesterday; “Our economic fundamentals are strong.”
This morning his campaign was doing back flips attempting to correct that “monumental gaffe”…!
Someone should ask him once again; if he understands the difference between Sunni and Shiite and what physical areas of Iraq they populate?
With fifty four days to go… he’ll have real mental and verbal challenges to overcome…!
J_Gocht on September 16, 2008 at 1:37 PM
Uh-DUH?! With a Democrat majority in Congress, what does anyone expect?! They’re the ones with the power. Presidents can only do so much, which ain’t that much compared to Congress.
Why is this a problem for people to understand? People! You voted for a majority of democrats. Look what happened!
No surprises here. I see a tipping of the scales comin’ soon.
Badger40 on September 16, 2008 at 1:41 PM
Gucci, the issue at hand was created by democrat lobbyists and a democrat President….federal bailout provisions bleeding into the housing market turned what was once a strength into a weakness….pressure was brought to bear to make bad loans to “the needy”….”Scranton” and Bambi want more of the same to “fix it”.
FM/FM was a piggybank for liberal politicos.
sven10077 on September 16, 2008 at 1:42 PM
J:
I never listen to Obama, that is what the mute on my remote is for.
Listen, the Democrats are deep into this. They helped make it happen. Chris Dodd chairs the Banking Committee and got sweetheart loans from the people he was supposed to be watching. Jim Johnson had to leave the Obama campaign when his associations with Country Wide came to light. And Obama has taken more than $126,000 in campaign contributions from these people.
Your frantic efforts to cover up for the incompetency of your party is touching, but stupid.
And btw, I was a realtor and I saw these changes coming about in the 90’s when Clinton was in office. In 1998 my broker said this day would come and he was right.
And btw, when McCain talk about getting rid of regulations, he is talking about the regulations that virtucally ensured that this would happen.
Terrye on September 16, 2008 at 1:43 PM
J:
When Democrats took over Congress in 2006, the stock market was doing pretty good, unemployment was at 4.5%, gas and oil were both cheaper than they are now and the budget deficit was less than half what it is. The lending institutions were not doing great, but we were not seeing this kind of crap either.
And then the Democrats took over and things started going to hell. Their excuse? Blame Bush, but Bush had been president for 6 years without this crap happening.
The truth is the Democrats just blame others, that is all they do. They do not come up with solutions or viable alternatives. They rant, they rave, they bitch, they point fingers, they act as America is a third world country…but when and if they get the job of governing, they suck.
Terrye on September 16, 2008 at 1:48 PM
the housing bubble is the precursor for the social security snare…
both were predicated on the notion that the value and income from each base would never go down.
It was and is insane.
My father bought his first house for 1200 dollars which was 10% of one year’s income at the time. That trick is simply impossible these days because of the home equity line of credit con game. You house is worth the value of the land, the material and labor cost of construction and what the market gives you. Somehwere along the line like magic people thought it was a perpetual motion machine.
The incoming generation will NOT pay the peak price for a house and that is what this crisis is predicated on. Too many lenders knwoingly made shaky loans planning on the recipient flipping the house for a profit. Then one day energy costs went up and too many people defaulted at once.
Smart people have been seeing this day since 1999-2003.
sven10077 on September 16, 2008 at 1:50 PM
And btw, the fundamentals of the economy are sound. If they weren’t Barack Obama would not be attending a movie star’s fundraiser at her mansion for $30,000 a plate. They will spend more to cater that party than the average American lives on in a year.
Terrye on September 16, 2008 at 1:51 PM
APOCALYPSE NOT
By IRWIN M. STELZER
September 16, 2008 —
AS a very savvy Wall Street old-timer likes to point out, the world only comes to an end once - and this ain’t it.
Yes, investors are scared out of their wits, so scared that they’ve fled en masse to Treasuries (bidding the prices of government IOUs up so high that the yields are close to nil). And, yes, there will be some collateral damage from the demise of Lehman Brothers.
But don’t think that Treasury Secretary Hank Paulson pulled the plug and decided to return to the good old days of red-in-tooth-and-claw capitalism, the days before he arranged the takeover of Bear Stearns before the nationalization of Freddie Mac and Fannie Mae.
Paulson had first made as certain as he could that the failure of Lehman would not set off a collapse of the financial system.
Good article on the “crisis”….
sven10077 on September 16, 2008 at 1:55 PM
Is someone calling the McCain campaign and ordering that they THROTTLE Barack Obama over this? Obama mantra has been that Bush’s failed policies caused the “credit crisis” which we see rippling throughout the economy today. It’s part of his “more of the same” garbage.
PLEASE JOHN MCCAIN AND SARA PALIN — hammer them on this one!!! Where’s the ad??? COME ON!
D2Boston on September 16, 2008 at 1:55 PM
absolutely, Main Street is fine the implosions are simply showing you can’t put 30 bucks of debt on 1 buck of equity….
we call that a pyramid scheme back home.
sven10077 on September 16, 2008 at 1:57 PM
I use the “perpetual motion machine” analogy with lib policy all the time. It is exactly what they strive for, as with all rights and no responsibilities, or all reward and no risk, …
progressoverpeace on September 16, 2008 at 2:01 PM
If we could harness their mental energy focused on “fairness” we could do away with fossil fuels.
sven10077 on September 16, 2008 at 2:03 PM
Oh boye, gaffe #2 on the same day…!
McSame senior advisor, Carly Fiorina was asked if Sarah Palin would be competent to run a large company like Hewlett Packard as she did.
…and she said… “No”
What the, who…?
Has Obama got her on his payroll…?
Maybe she meant? Palin couldn’t run it as poorly as she did; when her board of directors booted her curvy backside…!
McSame needs to tighten up his ship, a bit!
J_Gocht on September 16, 2008 at 2:13 PM
Heh. If only the libs really were that worthwhile …
Unfortunately, they are mostly just like the Gochta character, here - letting them out of their sandboxes only puts the rest of us at risk.
progressoverpeace on September 16, 2008 at 2:14 PM
D2:
I know how you feel, but I don’t think that McCain thinks it is his job to defend Bush. I think the Bush administration needs to do more of this themselves.
But there has been some greed here too. I dealt with some of those mortgage companies, and they were not just giving out loans because the government made them do it.
Terrye on September 16, 2008 at 2:17 PM
J_Gocht:
Maybe she is pissed she did not get the job. Who cares?
Tell me, has Obama figured out how many states there are yet? Or where they are? Has he ever admitted that he was sitting there chanting AMEN when Wright was screaming God Damn America? Has ever explained his wife getting a big raise after he got a nice big fat earmark for her employer? Has he ever admitted that he had something to do with Ryan’s divorce papers being made public in the papers in Chicago? After all if not for that Obama would not be a Senator.
Has he ever explained his numerous lies, gaffes, flipflops and hypocricies?
Has he or Biden ever talked about any efforts on their part in the last couple of years to clean up or tighten up the credit industry?
McCAin is ahead because people like you have infested the Obama camp and turned it into something most Americans do not like or support.
Can that change? Maybe, but it would help if you would shut up.
Terrye on September 16, 2008 at 2:23 PM
Yeah and when the Bush Boye took over from Bubba he started with a 200 billion dollar surplus in the US Treasury…!
I never met anyone from Crawford,Texas that; “Knew when to hold ‘em or knew when to fold ‘em”.
J_Gocht on September 16, 2008 at 2:25 PM
So whose policies caused Lehman and (probably) AIG and Washington Mutual to have to file for bankruptcy and Merrill Lynch to have to sell itself to Bank of America
Was it the lack of regulation that caused these to fail?
jim m on September 16, 2008 at 2:25 PM
Once the misvaluing of risk was accepted throughout the markets (because of legislative fiat and government bullying) one must take part in order to compete with the rest of the companies. Any company that refused to give loans, based solely on creditworthiness, found themselves labeled as ‘racists’, threatened with fines, jail, … The government FORCED the market to this position. Any honest lender would have been creamed by the competition, who were making tons of money with the mispriced sub-primes (which were nothing but free money the gov gave, via guarantees of poorly valued credit, to get loans to people who shouldn’t have had them).
There was some overdone greed (as there always is) but it was a pittance compared to the driving force of the lib policy of affirmative action in the lending industry.
progressoverpeace on September 16, 2008 at 2:26 PM
Barney Frank and Charles Schumer should be impeached for their role in the credit crisis. If either wins another election, the public deserves the criminals they embrace.
philwynk on September 16, 2008 at 2:31 PM
Hey, please stop feeding the trolls. I just scroll past its little comments, much like gingerly stepping through a cow pasture. I don’t crap on my shoes and my blood pressure stays down.
Neocon Peg on September 16, 2008 at 2:37 PM
Don’t be such an ass. The on-budget surplus was all of 85 billion. Big deal. The tech bubble hadn’t popped (killing 6 trillion in wealth) and the Clinton destruction of our military was coming to an end. Get a brain. Clinton’s “peace dividend” (where did that all go???) was nothing more than a ticket to 9/11.
progressoverpeace on September 16, 2008 at 2:39 PM
I wrote an article back in February making the same point that Lott did in March — that leftist concern for red-lining was the impetus behind relaxing of lending criteria in the banking industry. Fannie Mae made a $1 trillion commitment to back marginal loans in 1995, which arguably is the root cause of the housing boom that lasted until 2006. The government policy created artificially inflated demand for housing, which naturally increased the prices of houses beyond their true economic worth. The correction was inevitable, as was the current crisis.
The real credit, though, goes to economist Stan Liebowitz from the Univ of Texas School of Business, who made the case for this in the New York Post at the beginning of February.
philwynk on September 16, 2008 at 2:39 PM
YOU CAN’T HANDLE THE TRUTH!
RMCS_USN on September 16, 2008 at 2:43 PM
Comment pages: « 1 [2] 3 4 »